Xavier Becerra, new HHS secretary, at his nomination hearing (Greg Nash/Pool via AP Images)

Drug­mak­ers brace for a pric­ing fight as Xavier Be­cer­ra is con­firmed as the next HHS sec­re­tary

By a ra­zor-thin mar­gin of 50-49, all Sen­ate De­moc­rats and Maine Re­pub­li­can Su­san Collins on Thurs­day con­firmed for­mer Cal­i­for­nia At­tor­ney Gen­er­al Xavier Be­cer­ra as the head of the De­part­ment of Health and Hu­man Ser­vices (HHS) — set­ting the stage for what may be ma­jor pric­ing bat­tles with the bio­phar­ma in­dus­try.

The par­ti­san di­vide over Be­cer­ra’s nom­i­na­tion came as De­moc­rats lined up be­hind Be­cer­ra’s tough stance against drug­mak­ers and for Oba­macare, among oth­er is­sues, while Re­pub­li­cans lam­bast­ed his lack of med­ical and sci­en­tif­ic ex­pe­ri­ence, as well as his tough stance against the phar­ma­ceu­ti­cal in­dus­try.

“I think we can all agree the price we’re pay­ing for some of these pre­scrip­tion drugs is far high­er than it should be. All you have to do is trav­el to an­oth­er coun­try to find we’re pay­ing way more,” Be­cer­ra said in his Sen­ate com­mit­tee hear­ing in Feb­ru­ary to re­view his nom­i­na­tion.

Aaron Kessel­heim, a pro­fes­sor of med­i­cine at Har­vard Med­ical School and a fac­ul­ty mem­ber in the Di­vi­sion of Phar­ma­coepi­demi­ol­o­gy and Phar­ma­coeco­nom­ics at Brigham and Women’s Hos­pi­tal, said he’s not con­cerned that Be­cer­ra is not a doc­tor; “be­ing a med­ical doc­tor trains you to have in­sight in­to pa­tient care, but it does not give you spe­cial in­sight in­to be­ing an ef­fec­tive HHS Sec­re­tary, as we learned from the dis­as­trous Tom Price ad­min­is­tra­tion.”

Aaron Kessel­heim

In terms of drug pric­ing, Kessel­heim said he thought Be­cer­ra could “right away take some steps to ad­dress Part B drug pric­ing, since right now Medicare en­gages in no over­sight of Part B prices; it just pays the ASP [av­er­age sales price] plus a small per­cent. This could in­clude ideas such as en­forc­ing ac­cu­rate re­port­ing of ASPs, re­duc­ing spend­ing on bi­o­log­ic drugs with biosim­i­lars by bring­ing them all un­der the same re­im­burse­ment code, shift­ing cer­tain drugs from Part B to Part D (with as­so­ci­at­ed lim­its on OOP [out of pock­et] costs), and in­sti­tut­ing the Med­PAC rec­om­men­da­tion to cre­ate a CM­MI [Cen­ters for Medicare & Med­ic­aid Ser­vices (CMS) In­no­va­tion Cen­ter] demon­stra­tion project to ne­go­ti­ate prices of Part B drugs. Ul­ti­mate­ly, he may need to de­vel­op the me­chan­ics of a sys­tem to ne­go­ti­ate fair drug prices based on their clin­i­cal ben­e­fits if such a ne­go­ti­a­tion process is ap­proved by Con­gress, since it will most nat­u­ral­ly be housed with­in CMS.”

As At­tor­ney Gen­er­al of Cal­i­for­nia, Be­cer­ra led the state to be­come the first in the na­tion to ban pay-for-de­lay agree­ments, which can de­lay the en­try of gener­ic drugs to mar­ket, and he de­feat­ed a chal­lenge to the law from the As­so­ci­a­tion for Ac­ces­si­ble Med­i­cines (AAM), the gener­ic phar­ma­ceu­ti­cal in­dus­try group.

“I took on a num­ber of these drug­mak­ers by go­ing be­hind the cur­tain on how they reached their pric­ing and we were able to prove there was col­lu­sion go­ing on,” he added in the Feb­ru­ary hear­ing. He al­so has sought to right the wrongs of the opi­oid epi­dem­ic.

The Fed­er­al Trade Com­mis­sion’s re­cent an­nounce­ment that it would crack down on phar­ma­ceu­ti­cal com­pa­nies’ merg­ers al­so plays right in­to Be­cer­ra’s work on an­titrust is­sues.

And his ad­vo­ca­cy for us­ing march-in rights to uni­lat­er­al­ly low­er drug prices in cas­es where the gov­ern­ment has in­vest­ed in their de­vel­op­ment (such as with Gilead’s Covid-19 drug remde­sivir) has al­so riled the in­dus­try.

“Ob­vi­ous­ly the use of march-in rights would be a huge deal,” Ben Ip­poli­to, res­i­dent schol­ar at the Amer­i­can En­ter­prise In­sti­tute, told End­points News. “I don’t know if that has a high enough ben­e­fit-to-cost ra­tio to take on or not, par­tic­u­lar­ly giv­en all the oth­er pri­or­i­ties they’ve al­ready got … and if Con­gress ends up work­ing on drug pric­ing leg­is­la­tion any­ways.”

Lau­ren Aron­son

He not­ed that any push to use march-in might push the bio­phar­ma in­dus­try away from de­vel­op­ing treat­ments that march-in rights could ap­ply to, “which seems like it un­der­mines the point of fund­ing the re­search.”

On the flip side, sev­er­al non­prof­its specif­i­cal­ly fo­cused on drug prices praised his con­fir­ma­tion and are prepar­ing for him to take ac­tion.

Lau­ren Aron­son, ex­ec­u­tive di­rec­tor of the Cam­paign for Sus­tain­able Rx Pric­ing, com­mend­ed Con­gress for Be­cer­ra’s con­fir­ma­tion and for his “pledg­ing to work across par­ty lines to low­er drug prices and hold Big Phar­ma ac­count­able.” David Mitchell, a can­cer pa­tient and founder of Pa­tients for Af­ford­able Drugs Now, al­so called Be­cer­ra’s con­fir­ma­tion “a win for pa­tients across the coun­try who are strug­gling with high drug prices.”

Stephen Ubl

Phar­ma in­dus­try groups, mean­while, pledged to work with Be­cer­ra.

Stephen Ubl, pres­i­dent and CEO of in­dus­try group PhRMA, said in a state­ment that the in­dus­try looks for­ward to work­ing with HHS “to help ad­dress our na­tion’s lead­ing pri­or­i­ties: get­ting COVID-19 un­der con­trol and im­prov­ing health care af­ford­abil­i­ty and ac­cess for all Amer­i­cans.”

AAM of­fered their con­grat­u­la­tions and said they look for­ward to work­ing with him “to ad­vance poli­cies that en­hance the com­pet­i­tive­ness of safe, ef­fec­tive, af­ford­able gener­ics and biosim­i­lars.”

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