Chuck Grassley (R-IA) (via AP Images)

Bi­par­ti­san trio of sen­a­tors ask FTC to look at PBMs and tac­tics to keep in­sulin prices high

Just this week, the Sen­ate vot­ed 51-50 along par­ty lines (with tie break­er from VP Ka­mala Har­ris) to make Pres­i­dent Biden ap­pointee Al­varo Bedoya the de­cid­ing vote on a split 2-2 Fed­er­al Trade Com­mis­sion. And now that it is no longer split, a group of sen­a­tors wants the com­mis­sion to ac­tu­al­ly move for­ward on in­ves­ti­gat­ing phar­ma­cy ben­e­fit man­agers.

Re­pub­li­can sen­a­tors Chuck Grass­ley (IA) and Mike Braun (IN), along­side De­mo­c­rat sen­a­tor Ron Wyden (OR), sub­mit­ted a let­ter to FTC chair Lina Khan ear­li­er this week, af­ter the com­mis­sion­ers re­mained dead­locked in a 2-2 vote in Feb­ru­ary to for­mal­ly look in­to an­ti-com­pet­i­tive prac­tices at the hands of PBMs.

At the time, Khan said, “We have a re­al moral im­per­a­tive to act, this in­quiry is long over­due.”

This is not Grass­ley’s first let­ter re­gard­ing in­ves­ti­gat­ing PBMs to Khan — he sent a let­ter to her just back in March af­ter high­light­ing how PBMs op­er­ate with “lit­tle to no trans­paren­cy.”

Now on­to the let­ter: The sen­a­tors not­ed that Grass­ley and Wyden re­leased an 88-page re­port on the cost of in­sulin ear­li­er this year af­ter a two-year in­ves­ti­ga­tion from the Sen­ate Fi­nance Com­mit­tee in­to the three largest in­sulin man­u­fac­tur­ers (Sanofi, No­vo Nordisk and Eli Lil­ly) and three largest PBMs (Op­tum­Rx, Ex­press Scripts, and CVS Care­mark, which have a com­bined mar­ket share of 75-80%).

What they found was, at least on the in­sulin front, PBMs uti­lized a num­ber of con­tract­ing tac­tics to se­cure “pre­ferred for­mu­la­ry place­ment.” But as the sen­a­tors added through PBMs’ sheer mar­ket share:

De­spite, or per­haps be­cause of, this lev­el of con­sol­i­da­tion, PBMs op­er­ate with lit­tle trans­paren­cy, mak­ing it dif­fi­cult, if not im­pos­si­ble to un­der­stand how PBMs in­flu­ence pre­scrip­tion drug pric­ing.

As of 2019, some 37 mil­lion Amer­i­cans are on in­sulin, and 7 mil­lion re­quire it dai­ly. The sen­a­tors al­so not­ed that for peo­ple on Medicare Part D, more than 1 in 4 spend more than $5,000 a year for their in­sulin.

Some of those tac­tics that the sen­a­tors briefly men­tioned were found in four PBM prac­tices: re­bates, for­mu­la­ry ex­clu­sion lists, ad­min­is­tra­tive fees and price pro­tec­tion claus­es. For re­bates, they’ve in­creased in lock step with list price since 2013, if not ear­li­er, the sen­a­tors not­ed. They al­so said, “We found that PBMs with a large vol­ume of clients are able to ex­tract high­er re­bates from man­u­fac­tur­ers when com­pared to small­er pay­ers, who of­ten lack lever­age and re­sources.”

On for­mu­la­ry ex­clu­sion lists — the lists that dic­tate whether or not a health­care plan will cov­er the price of a drug — the Sen­ate com­mit­tee’s in­ves­ti­ga­tion found that pay­ers and PBMs in­creased their own use of the lists to con­trol drug costs, as man­u­fac­tur­ers had in­creased their re­bate of­fers to PBMs “sig­nif­i­cant­ly fol­low­ing the threat of ex­clu­sion.” For man­u­fac­tur­ers, ex­clu­sion of their drugs can end up re­sult­ing in fi­nan­cial loss­es and re­duced mar­ket share.

Then the let­ter went on to ad­min fees — while in­for­ma­tion is not well known thanks to con­fi­den­tial re­bate agree­ments, what the com­mit­tee found sug­gest­ed that fees range be­tween 3% and 5% of the list price, which can be prob­lem­at­ic as the list price can be in­creased to of­fer PBMs con­ces­sions in ex­change for pre­ferred for­mu­la­ry place­ment.

The let­ter then cit­ed a law re­view ar­ti­cle pub­lished in the Har­vard Jour­nal on Leg­is­la­tion from le­gal re­searcher Robin Feld­man:

[T]hese pay­ments re­duce the drug com­pa­ny’s net in­come from sales of the drug and in­crease the PBM rev­enue re­lat­ed to a spe­cif­ic drug. Even when a drug com­pa­ny pays for ser­vices from a PBM, if the val­ue of the ser­vice is sub­stan­tial­ly less than the pay­ment made, the trans­ac­tion is sim­ply an in­di­rect price con­ces­sion. Once again, rais­ing list price can leave room for the drug com­pa­ny to of­fer these good­ies . . . [and, as a re­sult], many peo­ple be will be forced to pay high­er list prices.

Be­yond the re­bates, ex­clu­sion lists and ad­min fees, the fi­nal tac­tic men­tioned was price pro­tec­tion claus­es, ini­tial­ly de­signed to lim­it a drug mak­er from in­creas­ing the list price be­yond a pre-spec­i­fied amount — and if the mak­er goes above that amount, the PBM and health plan re­ceive an ad­di­tion­al re­bate, de­pend­ing on the con­tract. How­ev­er, the com­mit­tee’s in­ves­ti­ga­tion found that those claus­es don’t de­ter an­nu­al in­fla­tion of the list price — and PBMs ac­cept them as long as they get more con­ces­sions at the end of the day.

In clos­ing, the sen­a­tors wrote to the FTC:

We found that PBM con­tract­ing prac­tices do lit­tle to dis­cour­age high list prices, es­pe­cial­ly in the in­sulin ther­a­peu­tic class. In fact, this per­verse sys­tem ex­ac­er­bates the prob­lem by dis­cour­ag­ing man­u­fac­tur­ers from com­pet­ing to low­er list price and pre­vents com­peti­tors with low­er priced al­ter­na­tives from gain­ing a foothold. This pre­vents mean­ing­ful com­pe­ti­tion, harm­ing tax­pay­ers and the Fed­er­al gov­ern­ment in the process.

Vas Narasimhan (Photographer: Jason Alden/Bloomberg via Getty Images)

No­var­tis de­tails plans to axe 8,000 staffers as Narasimhan be­gins sec­ond phase of a glob­al re­org

We now know the number of jobs coming under the axe at Novartis, and it isn’t small.

The pharma giant is confirming a report from Swiss newspaper Tages-Anzeiger that it is chopping 8,000 jobs out of its 108,000 global staffers. A large segment will hit right at company headquarters in Basel, as CEO Vas Narasimhan axes some 1,400 of a little more than 11,000  jobs in Switzerland.

The first phase of the work is almost done, the company says in a statement to Endpoints News. Now it’s on to phase two. In the statement, Novartis says:

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How pre­pared is bio­phar­ma for the cy­ber dooms­day?

One of the largest cyberattacks in history happened on a Friday, Eric Perakslis distinctly remembers.

Perakslis, who was head of Takeda’s R&D Data Sciences Institute and visiting faculty at Harvard Medical School at the time, had spent that morning completing a review on cybersecurity for the British Medical Journal. Moments after he turned it in, he heard back from the editor: “Have you heard what’s going on right now?”

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Sanofi to cut in­sulin prices for unin­sured from $99 to $35, match­ing the in­sulin cap com­ing through Con­gress

As the House-passed bill to cap the monthly price of insulin at $35 nationwide makes its way for a Senate vote soon, Sanofi announced Wednesday morning that beginning next month it will cut the monthly price of its insulins for uninsured Americans to $35, down from $99 previously.

The announcement from Sanofi, which allows the uninsured to buy one or multiple Sanofi insulins (Lantus, Insulin Glargine U-100, Toujeo, Admelog, and Apidra) at $35 for a 30-day supply effective July 1, follows House passage (232-193) of the monthly cap in March, with just 12 Republicans voting in favor of the measure.

Peter Marks (Jim Lo Scalzo/Pool via AP Images)

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The FDA’s Vaccine and Related Biological Products Advisory Committee on Tuesday gave the thumbs up — by a vote of 19-2 — that the FDA should require an Omicron-related component in this next season’s booster dose for Covid-19, which both Pfizer/BioNTech and Moderna are hard at work on.

And while neither booster will likely be ready to go with adequate supplies for all American adults by the beginning of the next school year, the situation is still complex and fluid, with CBER Director Peter Marks telling the committee that it’ll take companies at least three months to ready their supplies for this expected next wave.

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As bear mar­ket con­tin­ues to beat down biotech, ARCH clos­es a $3B ear­ly-stage fund

One of the biggest names in biotech investing has a whole lot of new money to spend.

ARCH Venture Partners closed its 12th venture fund early Wednesday morning, the firm said, bringing in almost $3 billion to invest in early-stage biotechs. The move comes about a year and a half after ARCH announced its previous fund, for almost $2 billion back in January 2021.

In a statement, ARCH managing director and co-founder Bob Nelsen appeared to brush off concerns about the broader market troubles, alluding to the downturn that’s seen several biotechs downsize and the XBI fall back to almost pre-pandemic levels.

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Lina Gugucheva, NewAmsterdam Pharma CBO

Phar­ma group bets up to $1B-plus on the PhI­II res­ur­rec­tion of a once dead-and-buried LDL drug

Close to 5 years after then-Amgen R&D chief Sean Harper tamped the last spade of dirt on the last broadly focused CETP cholesterol drug — burying their $300 million upfront and the few remaining hopes for the class with it — the therapy has been fully resurrected. And today, the NewAmsterdam Pharma crew that did the Lazarus treatment on obicetrapib is taking another big step on the comeback trail with a €1 billion-plus regional licensing deal, complete with close to $150 million in upfront cash.

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Some phar­ma com­pa­nies promise to cov­er abor­tion-re­lat­ed trav­el costs — while oth­ers won't go that far yet

As the US Department of Health and Human Services promises to support the millions of women who would now need to cross state lines to receive a legal abortion, a handful of pharma companies have said they will pick up employees’ travel expenses.

GSK, Sanofi, Johnson & Johnson, BeiGene, Alnylam and Gilead have all committed to covering abortion-related travel expenses just four days after the Supreme Court overturned Roe v. Wade and revoked women’s constitutional right to an abortion.

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Aurobindo Pharma co-founders P. V. Ram Prasad Reddy (L) and K. Nityananda Reddy

Au­robindo Phar­ma re­ceives warn­ing let­ter from In­di­a's SEC fol­low­ing more FDA ques­tion marks

Indian-based generics manufacturer Aurobindo Pharma has been in the crosshairs of the FDA for several years now, but the company is also attracting attention from regulators within the subcontinent.

According to the Indian business news site Business Standard, a warning letter was sent to the company from the Securities Exchange Board of India, or SEBI.

The letter is related to disclosures made by the company on an ongoing FDA audit of the company’s Unit-1 API facility in Hyderabad, India as well as observations made by the US regulator between 2019 and 2022.

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CVS re­sumes cov­er­age of block­buster blood thin­ner af­ter price drop fol­lows Jan­u­ary ex­clu­sion

Following some backlash from the American College of Cardiology and patients, Bristol Myers Squibb and Pfizer lowered the price of their blockbuster blood thinner Eliquis, thus ensuring that CVS Caremark would cover the drug after 6 months of it being off the major PBM’s formulary.

“Because we secured lower net costs for patients from negotiations with the drug manufacturer, Eliquis will be added back to our template formularies for the commercial segment effective July 1, 2022, and patient choices will be expanded,” CVS Health said in an emailed statement. “Anti-coagulant therapies are among the non-specialty products where we are seeing the fastest cost increases from drug manufacturers and we will continue to push back on unwarranted price increases.”