The Con­gres­sion­al Bud­get Of­fice on Fri­day said that Sen­ate De­moc­rats’ pro­pos­al to al­low Medicare to ne­go­ti­ate cer­tain drug prices could low­er the fed­er­al deficit by about $288 bil­lion through 2031, and re­duce drug­mak­ers’ 1,300 to­tal drug ap­provals by about 10 drugs over the next three decades.

That trade-off, part of a larg­er Sen­ate rec­on­cil­i­a­tion pack­age on­ly need­ing a sim­ple ma­jor­i­ty of votes to pass, finds a mid­dle ground among the oth­er re­cent Con­gres­sion­al at­tempts to stem ris­ing drug prices.

CBO said Fri­day that the chill­ing ef­fect on the num­ber of drugs in­tro­duced to the US mar­ket would be about one drug over the first 10-year pe­ri­od, or 2023-2032, and about nine oth­ers over the next two decades. With ex­pec­ta­tions for about 1,300 drug ap­provals over the next 30 years, the CBO’s es­ti­mate means the num­ber of drugs lost due to this leg­is­la­tion amounts to less than 1% of es­ti­mat­ed ap­provals.

For House Speak­er Nan­cy Pelosi’s drug price ne­go­ti­a­tion bill, known as HR 3 and which sought deep­er pric­ing cuts, CBO pre­dict­ed at the time that it would re­sult in 59 few­er new drugs over three decades.

Rachel Sachs

“The rea­son the num­ber is small­er is that the pack­age has changed over time,” Rachel Sachs, a law pro­fes­sor at Wash­ing­ton Uni­ver­si­ty in St. Louis told End­points News. “The ne­go­ti­a­tion pro­vi­sions now not on­ly ap­ply to few­er drugs, but they are for­mal­ly lim­it­ed in that they on­ly be­gin af­ter a drug has been on the mar­ket for a cer­tain amount of time. So com­pa­nies have a pe­ri­od of time dur­ing which ne­go­ti­a­tion is not present. CBO like­ly con­sid­ered that, as well.”

But one thing the CBO doesn’t con­sid­er is what types of drugs might be af­fect­ed. As with oth­er drug pric­ing CBO scores, the bud­get of­fice made clear again that it “did not pre­dict what kind of drugs would be af­fect­ed or an­a­lyze the ef­fects of for­gone in­no­va­tion on pub­lic health.”

The of­fice re­cent­ly pub­lished a look at the up­dat­ed ver­sion of its mod­el used to in­form es­ti­mates of the ef­fects of HR 3 on the num­ber and tim­ing of new drugs en­ter­ing the US mar­ket.

In a Jan­u­ary slide deck on its new mod­el, CBO added, “A price ne­go­ti­a­tion pol­i­cy would have lit­tle ef­fect for the first ten years, but in the long run, such a pol­i­cy would de­crease the num­ber of new drugs en­ter­ing the mar­ket by 10%.”

While PhRMA and oth­er in­dus­try groups have lament­ed this po­ten­tial for ma­jor loss­es to in­no­v­a­tive med­i­cine due to drug pric­ing pro­vi­sions, some of these es­ti­mat­ed pipeline cuts may come from me-too drugs, oth­er lat­er en­trants, or even copy­cat drugs.

The gener­ic drug in­dus­try group, the As­so­ci­a­tion for Ac­ces­si­ble Med­i­cines, and its Biosim­i­lars Coun­cil on Mon­day came out in op­po­si­tion to the new Sen­ate pric­ing re­forms, say­ing they will ma­jor­ly in­crease risks for gener­ic and biosim­i­lar man­u­fac­tur­ers as the com­pa­nies will have “no way to know whether a brand-name drug will be se­lect­ed for ne­go­ti­a­tion or what the ne­go­ti­at­ed price may be” un­til well af­ter a copy­cat’s de­vel­op­ment would need to al­ready be­gin.

The CBO es­ti­mate on gov­ern­ment sav­ings al­so doesn’t match Pelosi’s for­mer drug price ne­go­ti­a­tions bill, which the CBO scored in Au­gust 2021 as sav­ing $456 bil­lion over 10 years, al­though it’s con­sid­er­ably more than the Sen­ate Dems’ last at­tempt at Medicare ne­go­ti­a­tions via the Build Back Bet­ter Act that Sen. Joe Manchin (D-WV) squashed, and which the CBO said would save about $76 bil­lion over 10 years.

Sen­ate Dems last week un­veiled the new leg­isla­tive lan­guage around Medicare drug price ne­go­ti­a­tions, which be­gin­ning in 2026 would al­low for the ne­go­ti­a­tion of 10 el­i­gi­ble drug prices, and build up to 20 drugs by 2029.

For com­pa­nies that don’t com­ply, CMS can as­sess penal­ties of up to $1 mil­lion per day, ac­cord­ing to the bill text. And any man­u­fac­tur­er that “know­ing­ly pro­vides” false in­for­ma­tion al­so can be sub­ject to fines of $100 mil­lion per in­frac­tion.

The Sen­ate pro­pos­al, which mir­rors the pre­vi­ous ef­forts in the Build Back Bet­ter Act, would al­so cap se­niors’ drug costs un­der Medicare at $2,000 an­nu­al­ly, but it no­tice­ably does not in­clude a $35 month­ly cap on in­sulin costs for those with in­sur­ance, which Sen. Chuck Schumer (D-NY) has twice pledged to vote sep­a­rate­ly on.

The mRNA player Moderna is further cementing its presence on the African continent.

Moderna announced on Thursday that it has finalized an agreement with Kenya’s government to partner up and bring an mRNA manufacturing facility to the east African nation. The new facility aims to manufacture up to 500 million doses of vaccines annually. Moderna also said the new facility will have the ability to spike its production capabilities to respond to public health emergencies on the continent or globally.

ViiV Healthcare has teamed up with the UN-backed Medicines Patent Pool and three generic manufacturers to expand access to medicine that can prevent HIV.

ViiV and the Medicines Patent Pool jointly announced Thursday that the MPP signed sub-licensing agreements with Aurobindo, Cipla and Viatris to manufacture generics of a long-acting form of cabotegravir for HIV pre-exposure prophylaxis (PrEP). As a result of the agreement, the manufacturers will be able to develop, manufacture and supply generic versions of cabotegravir LA in 90 countries — subject to regulatory approvals.