Drug­mak­ers sue HHS for try­ing to add prices to DTC ads

Am­gen, Mer­ck, Eli Lil­ly and the As­so­ci­a­tion of Na­tion­al Ad­ver­tis­ers on Fri­day sued the De­part­ment of Health and Hu­man Ser­vices (HHS) be­cause of a rule­mak­ing that would re­quire phar­ma­ceu­ti­cal list prices to be shown in di­rect-to-con­sumer (DTC) drug ad­ver­tise­ments on tele­vi­sion.

The rule, which was fi­nal­ized in May and is set to take ef­fect in Ju­ly, re­quires that tele­vi­sion ad­ver­tise­ments for pre­scrip­tion drugs or bi­o­log­i­cal prod­ucts with a list price of $35 or more con­tain a state­ment in­di­cat­ing the Whole­sale Ac­qui­si­tion Cost (al­so re­ferred to as WAC or the list price) for a typ­i­cal 30-day reg­i­men or for a typ­i­cal course of treat­ment.

But in their law­suit, file in the US Dis­trict Court for the Dis­trict of Co­lum­bia, the drug­mak­ers took is­sue with the fact that con­sumers do not pay the list prices that would be ad­ver­tised un­der the rule.

“The rule thus di­rects man­u­fac­tur­ers to ad­ver­tise to con­sumers the price that man­u­fac­tur­ers charge to whole­salers, even though these are two en­tire­ly dif­fer­ent con­cepts,” the com­plaint says. “And be­cause third-par­ty pay­ers (like in­sur­ance plans or gov­ern­ment health pro­grams) gen­er­al­ly cov­er the bulk of the costs of a brand­ed drug, the over­whelm­ing ma­jor­i­ty of pa­tients do not pay any­thing re­mote­ly close to the Whole­sale Ac­qui­si­tion Cost of an ad­ver­tised drug at the phar­ma­cy or through their provider.”

For in­stance, rarely does any­one on Med­ic­aid, HHS’ pro­gram to help those with lim­it­ed in­comes or re­sources, pay more than an $8 co-pay, the suit claims.

“Be­yond be­ing en­tire­ly un­nec­es­sary, bad for pa­tients, and detri­men­tal to health care,” the drug­mak­ers al­so claim that the rule is un­law­ful for two rea­sons: HHS lacks the statu­to­ry au­thor­i­ty to im­pose the rule and it vi­o­lates the First Amend­ment.

The gov­ern­ment “bears a heavy bur­den to jus­ti­fy laws com­pelling speech, even in the com­mer­cial are­na,” the suit says, not­ing that HHS has “no le­git­i­mate in­ter­est, much less a sub­stan­tial one, in forc­ing phar­ma­ceu­ti­cal man­u­fac­tur­ers to make state­ments in di­rect-to-con­sumer mes­sag­ing that it con­cedes may mis­lead pa­tients about their out-of-pock­et costs for med­ica­tions.”

As far as HHS’s statu­to­ry au­thor­i­ty, the suit says this “claim to have dis­cov­ered such ex­pan­sive pow­er in a pair of decades-old gen­er­al rule­mak­ing pro­vi­sions of the So­cial Se­cu­ri­ty Act is sim­ply not cred­i­ble.

“Orig­i­nal­ly, HHS in­di­cat­ed that it hoped the FDA—long rec­og­nized as the pri­ma­ry reg­u­la­tor of phar­ma­ceu­ti­cal ad­ver­tis­ing—would adopt a price dis­clo­sure re­quire­ment us­ing au­thor­i­ty del­e­gat­ed by Con­gress in the FD­CA. But af­ter com­menters point­ed out that the FDA has long con­ced­ed the FD­CA does not au­tho­rize price dis­clo­sure man­dates, HHS aban­doned that course,” the suit says.


First pub­lished in Reg­u­la­to­ry Fo­cus™ by the Reg­u­la­to­ry Af­fairs Pro­fes­sion­als So­ci­ety, the largest glob­al or­ga­ni­za­tion of and for those in­volved with the reg­u­la­tion of health­care prod­ucts. Click here for more in­for­ma­tion.

So­cial im­age: Shut­ter­stock

Author

Zachary Brennan

managing editor, RAPS

De­vel­op­ment of the Next Gen­er­a­tion NKG2D CAR T-cell Man­u­fac­tur­ing Process

Celyad’s view on developing and delivering a CAR T-cell therapy with multi-tumor specificity combined with cell manufacturing success
Overview
Transitioning potential therapeutic assets from academia into the commercial environment is an exercise that is largely underappreciated by stakeholders, except for drug developers themselves. The promise of preclinical or early clinical results drives enthusiasm, but the pragmatic delivery of a therapy outside of small, local testing is most often a major challenge for drug developers especially, including among other things, the manufacturing challenges that surround the production of just-in-time and personalized autologous cell therapy products.

Paul Hudson, Getty Images

UP­DAT­ED: Sanofi CEO Hud­son lays out new R&D fo­cus — chop­ping di­a­betes, car­dio and slash­ing $2B-plus costs in sur­gi­cal dis­sec­tion

Earlier on Monday, new Sanofi CEO Paul Hudson baited the hook on his upcoming strategy presentation Tuesday with a tell-tale deal to buy Synthorx for $2.5 billion. That fits squarely with hints that he’s pointing the company to a bigger future in oncology, which also squares with a major industry tilt.

In a big reveal later in the day, though, Hudson offered a slate of stunners on his plans to surgically dissect and reassemble the portfoloio, saying that the company is dropping cardio and diabetes research — which covers two of its biggest franchise arenas. Sanofi missed the boat on developing new diabetes drugs, and now it’s pulling out entirely. As part of the pullback, it’s dropping efpeglenatide, their once-weekly GLP-1 injection for diabetes.

“To be out of cardiovascular and diabetes is not easy for a company like ours with an incredibly proud history,” Hudson said on a call with reporters, according to the Wall Street Journal. “As tough a choice as that is, we’re making that choice.”

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Roger Perlmutter, Merck

#ASH19: Here’s why Mer­ck is pay­ing $2.7B to­day to grab Ar­Qule and its next-gen BTK drug, lin­ing up Eli Lil­ly ri­val­ry

Just a few months after making a splash at the European Hematology Association scientific confab with an early snapshot of positive data for their BTK inhibitor ARQ 531, ArQule has won a $2.7 billion buyout deal from Merck.

Merck is scooping up a next-gen BTK drug — which is making a splash at ASH today — from ArQule in an M&A pact set at $20 a share $ARQL. That’s more than twice Friday’s $9.66 close. And Merck R&D chief Roger Perlmutter heralded a deal that nets “multiple clinical-stage oral kinase inhibitors.”

This is the second biotech buyout pact today, marking a brisk tempo of M&A deals in the lead-up to the big JP Morgan gathering in mid-January. It’s no surprise the acquisitions are both for cancer drugs, where Sanofi will try to make its mark while Merck beefs up a stellar oncology franchise. And bolt-ons are all the rage at the major pharma players, which you could also see in Novartis’ recent $9.7 billion MedCo buyout.

ArQule — which comes out on top after their original lead drug foundered in Phase III — highlighted early data on ‘531 at EHA from a group of 6 chronic lymphocytic leukemia patients who got the 65 mg dose. Four of them experienced a partial response — a big advance for a company that failed with earlier attempts.

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Paul Hudson, Sanofi

Paul Hud­son promis­es a bright new fu­ture at Sanofi, kick­ing loose me-too drugs and fo­cus­ing on land­mark ad­vances. But can he de­liv­er?

Paul Hudson was on a mission Tuesday morning as he stood up to address Sanofi’s new R&D and business strategy.

Still fresh into the job, the new CEO set out to convince his audience — including the legions of nervous staffers inevitably devoting much of their day to listening in — that the pharma giant is shedding the layers of bureaucracy that had held them back from making progress in the past, dropping the duds in the pipeline and reprioritizing a more narrow set of experimental drugs that were promised as first-in-class or best-in-class.  The company, he added, is now positioned to “go after other opportunities” that could offer a transformational approach to treating its core diseases.

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Left top to right: Mark Timney, Alex Denner, Vas Narasimhan. (The Medicines Company, Getty, AP/Endpoints News)

In a play-by-play of the $9.7B Med­Co buy­out, No­var­tis ad­mits it over­paid while of­fer­ing a huge wind­fall to ex­ecs

A month into his tenure at The Medicines Company, new CEO Mark Timney reached out to then-Novartis pharma chief Paul Hudson: Any interest in a partnership?

No, Hudson told him. Not now, at least.

Ten months later, Hudson had left to run Sanofi and Novartis CEO Vas Narasimhan was paying $9.7 billion for the one-drug biotech – the largest in the string of acquisitions Narasimhan has signed since his 2017 appointment.

The deal was the product of an activist investor and his controversial partner working through nearly a year of cat-and-mouse negotiations to secure a deal with Big Pharma’s most expansionist executive. It represented a huge bet in a cardiovascular field that already saw two major busts in recent years and brought massive returns for two of the industry’s most eye-raising names.

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Paul Hudson. Sanofi

New Sanofi CEO Hud­son adds next-gen can­cer drug tech to the R&D quest, buy­ing Syn­thorx for $2.5B

When Paul Hudson lays out his R&D vision for Sanofi tomorrow, he will have a new slate of interleukin therapies and a synthetic biology platform to boast about.

The French pharma giant announced early Monday that it is snagging San Diego biotech Synthorx in a $2.5 billion deal. That marks an affordable bolt-on for Sanofi but a considerable return for Synthorx backers, including Avalon, RA Capital and OrbiMed: At $68 per share, the price represents a 172% premium to Friday’s closing.

Synthorx’s take on alternative IL-2 drugs for both cancer and autoimmune disorders — enabled by a synthetic DNA base pair pioneered by Scripps professor Floyd Romesberg — “fits perfectly” with the kind of innovation that he wants at Sanofi, Hudson said.

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Am­gen puts its foot down in shiny new South San Fran­cis­co hub as it re­or­ga­nizes R&D ops

Amgen has signed up to be AbbVie’s neighbor in South San Francisco as it moves into a nine-story R&D facility in the booming biotech hub.

The arrangement gives Amgen 240,000 square feet of space on the Gateway of Pacific Campus, just a few minutes drive from its current digs at Oyster Point. The new hub will open in 2022 and house the big biotech’s Bay Area employees working on cardiometabolic, inflammation and oncology research.

Ab­b­Vie, Scripps ex­pand part­ner­ship, for­ti­fy fo­cus on can­cer drugs

Scripps and AbbVie go way back. Research conducted in the lab of Scripps scientist Richard Lerner led to the discovery of Humira. The antibody, approved by the FDA in 2002 and sold by AbbVie, went on to become the world’s bestselling treatment. In 2018, the drugmaker and the non-profit organization signed a pact focused on developing cancer treatments — and now, the scope of that partnership has broadened to encompass a range of diseases, including immunological and neurological conditions.

South Ko­rea jails 3 Sam­sung ex­ecs for de­stroy­ing ev­i­dence in Bi­o­Log­ics probe

Three Samsung executives in Korea are going to jail.

The convictions came in what prosecutors had billed as “biggest crime of evidence destruction in the history of South Korea”: a case of alleged corporate intrigue that was thrown open when investigators found what was hidden beneath the floor of a Samsung BioLogics plant. Eight employees in total were found guilty of evidence tampering and the three executives were each sentenced to up to two years in prison.