For­get biosim­i­lars. Pe­ter Bach and Mark Trusheim be­lieve price con­trols are the bet­ter way to rein in bi­o­log­ics prices

The prover­bial so­cial con­tract that drug­mak­ers of­ten cite to de­fend pre­scrip­tion drug prices hinges on the im­age of a patent cliff: Af­ter a pe­ri­od of ex­clu­siv­i­ty that al­lows de­vel­op­ers to re­coup R&D costs, any treat­ment — even those with ex­or­bi­tant price tags — even­tu­al­ly suc­cumb to gener­ic com­pe­ti­tion that in­evitably brings down its cost, if not ren­der it ob­so­lete.

That mod­el has large­ly held true for small mol­e­cule drugs. But out­spo­ken pol­i­cy re­searchers Pe­ter Bach and Mark Trusheim, along with two of Bach’s as­so­ciates at the Memo­r­i­al Sloan Ket­ter­ing Can­cer Cen­ter, are ar­gu­ing that the new gen­er­a­tion of bi­o­log­ics may need an ex­tra push down that cliff, and the force of biosim­i­lars won’t be enough.

Bi­o­log­ics, they write in a two-part blog­post in Health Af­fairs, are fun­da­men­tal­ly dif­fer­ent from small mol­e­cules, cre­at­ing nat­ur­al mo­nop­o­lies that are dif­fi­cult to over­come with com­pe­ti­tion-based price re­duc­tions:

While the mo­nop­oly held by in­no­va­tor small mol­e­cules is a prod­uct of gov­ern­ment poli­cies, in­no­v­a­tive bi­o­log­ic ther­a­pies pos­sess in­trin­sic sci­en­tif­ic un­cer­tain­ties that make cre­at­ing repli­cas dif­fi­cult, cost­ly, slow, and risky. Com­peti­tors to brand­ed bi­o­log­ics are called biosim­i­lars rather than “bio-iden­ti­cals” or gener­ics to re­flect this dif­fer­ence.

Mark Trusheim

Giv­ing up en­tire­ly on biosim­i­lars, Bach, Trusheim (of MIT Sloan), Pre­ston At­te­ber­ry and Jen­nifer Ohn pro­pose a reg­u­la­to­ry ap­proach to rein­ing in bi­o­log­ics costs that they say can gen­er­ate $250-$300 bil­lion of net sav­ings, while in­cur­ring one-time costs of $10-$20 bil­lion over five years. Their es­ti­mates for sav­ings are based on “the cur­rent 12-year ex­clu­siv­i­ty pe­ri­od and an as­sump­tion that dis­counts ap­proach the tra­di­tion­al gener­ic dis­counts of 70-90 per­cent,” while the one-time costs go to­ward com­pen­sat­ing biosim­i­lar firms.

The pol­i­cy would re­quire in­no­va­tor bi­o­log­ic man­u­fac­tur­ers to low­er their prices af­ter the pe­ri­od of mar­ket ex­clu­siv­i­ty — a price set by an in­de­pen­dent body that takes in­to ac­count the re­port­ed cost, a markup, a de­fined prof­it mar­gin, re­turn on cap­i­tal and so on.

The au­thors an­tic­i­pat­ed some push­back. You can be sure that fresh­ly re­tired FDA com­mis­sion­er Scott Got­tlieb was among the first to de­fend con­tin­ued pol­i­cy­mak­ing around biosim­i­lars.

A vo­cal cham­pi­on of biosim­i­lars as a means of low­er­ing drug prices, Got­tlieb has pre­vi­ous­ly lam­bast­ed a “rigged pay­ment scheme” on the in­sur­ance and phar­ma­cy ben­e­fit man­agers side that hin­der mar­ket pen­e­tra­tion for biosim­i­lars.

The Biosim­i­lar Coun­cil, a di­vi­sion of the gener­ic drug­mak­er coali­tion known as the As­so­ci­a­tion for Ac­ces­si­ble Med­i­cines, told Bio­Cen­tu­ry that “mar­ket­ed biosim­i­lars cur­rent­ly av­er­age 47% off the brand bi­o­log­ics’ price” and aban­don­ing it al­to­geth­er would be “toss­ing out the ba­by with the bath wa­ter.”

Some al­so took is­sue with the premis­es of the ar­gu­ment.

As a no­table talk­ing point of Pres­i­dent Don­ald Trump’s plan for low­er­ing drug prices — with big bio­phar­ma play­ers like Pfiz­er and Bio­gen dou­bling down on their in­vest­ments — biosim­i­lars are un­like­ly to go away any time soon. But Bach’s will be one of many ideas to come as politi­cians and com­pa­nies alike fran­ti­cal­ly search for ways to tam­per the roar­ing de­bate around high pre­scrip­tion drug prices, in which ex­pen­sive bi­o­log­ics play an ever en­larg­ing role.


Im­age: Pe­ter Bach at an End­points pan­el, Jan­u­ary 2019.

A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Patrik Jonsson, the president of Lilly Bio-Medicines

Who knew? Der­mi­ra’s board kept watch as its stock price tracked Eli Lil­ly’s se­cret bid­ding on a $1.1B buy­out

In just 8 days, from December 6 to December 14, the stock jumped from $7.88 to $12.70 — just under the initial $13 bid. There was no hard news about the company that would explain a rise like that tracking closely to the bid offer, raising the obvious question of whether insider info has leaked out to traders.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.

Ab­b­Vie do­nates $1M+ of the HIV drug that Chi­na is now rec­om­mend­ing for coro­n­avirus treat­ment

AbbVie is donating more than $1 million worth of an HIV drug to help combat the fast-spreading coronavirus outbreak in China, the company announced on Friday.

China’s National Health Commission has suggested Aluvia, a pill containing lopinavir and ritonavir, as one of two possible treatments for the symptoms of the virus currently known as 2019-nCoV in the absence of effective antiviral medications. The other part is nebulized alpha-interferon.

UP­DAT­ED: Ab­b­Vie and Al­ler­gan di­vesti­tures are in, and an old As­traZeneca drug comes home

When AbbVie announced their $63-billion Allergan acquisition last year, executives acknowledged the two companies would have to divest some drugs to satisfy regulators. The two main assets in discussion have now been sold off – and one of them is coming home.

AstraZeneca will acquire brazikumab, Allergan’s late-stage IL-23 candidate for Crohn’s disease and ulcerative colitis. The drug was originally developed by AstraZeneca’s defunct subsidiary MedImmune, in collaboration with Amgen. Allergan licensed it for $250 million upfront and $1.27 billion in milestones.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 70,600+ biopharma pros reading Endpoints daily — and it's free.

As­traZeneca makes case for use of blood thin­ner Bril­in­ta in stroke pa­tients

AstraZeneca’s extravagant projections for its clot fighter Brilinta may have fizzled in the face of underwhelming trial data — but a new pivotal study is set to expand its use substantially.

On Monday, the British drugmaker said the drug, when taken in conjunction with aspirin, induced a statistically significant reduction in the risk of the primary composite endpoint of stroke and death, compared to aspirin alone, in 11,000 patients that have suffered minor acute ischaemic stroke or a high-risk transient ischemic attack (TIA).

Samantha Truex (file photo)

Bruce Booth and Saman­tha Truex's lat­est ven­ture aims just above Hu­mi­ra

In 2000, about a year after the first trial data on Humira came out, a Japanese team identified a new gene that appeared to prevent GI cancer in mice: gasdermin, they called it, after the particular proteins it expressed.

Over the next decade-and-a-half, researchers found five more genes in the same family – often identified as gasdermin A, B, C, D, E and F – and yet their purpose baffled scientists. Mutations in appeared to make mice bald (alopecia), but deleting it had no effect. Mutations in F and A were linked to deafness. Mutant E caused human cells to self-destruct.

“The exact biological function of these proteins remained unknown for more than 15 years,” three of the field’s top researchers wrote in a  Nature review in November.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 70,600+ biopharma pros reading Endpoints daily — and it's free.

FDA’s golodirsen CRL: Sarep­ta’s Duchenne drugs are dan­ger­ous to pa­tients, of­fer­ing on­ly a small ben­e­fit. And where's that con­fir­ma­to­ry tri­al?

Back last summer, Sarepta CEO Doug Ingram told Duchenne MD families and investors that the FDA’s shock rejection of their second Duchenne MD drug golodirsen was due to some concerns regulators raised about the risk of infection and the possibility of kidney toxicity. But when pressed to release the letter for all to see, he declined, according to a report from BioPharmaDive, saying that kind of move “might not look like we’re being as respectful as we’d like to be.”

He went on to assure everyone that he hadn’t misrepresented the CRL.

But Ingram’s public remarks didn’t include everything in the letter, which — following the FDA’s surprise about-face and unexplained approval — has now been posted on the FDA’s website and broadly circulated on Twitter early Wednesday.

The CRL raises plenty of fresh questions about why the FDA abruptly decided to reverse itself and hand out an OK for a drug a senior regulator at the FDA believed — 5 months ago, when he wrote the letter — is dangerous to patients. It also puts the spotlight back on Sarepta $SRPT, which failed to launch a confirmatory study of eteplirsen, which was only approved after a heated internal controversy at the FDA. Ellis Unger, director of CDER’s Office of Drug Evaluation I, notes that study could have clarified quite a lot about the benefit and risks associated with their drugs — which can cost as much as a million dollars per patient per year, depending on weight.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 70,600+ biopharma pros reading Endpoints daily — and it's free.

Aymeric Le Chatelier, Ipsen

A $1B-plus drug stum­bles in­to an­oth­er big PhI­II set­back — this time flunk­ing fu­til­i­ty test — as FDA hold re­mains in ef­fect for Ipsen

David Meek

At the time Ipsen stepped up last year with more than a billion dollars in cash to buy Clementia and a late-stage program for a rare bone disease that afflicts children, then CEO David Meek was confident that he had put the French biotech on a short path to a mid-2020 launch.

Instead of prepping a launch, though, the company was hit with a hold on the FDA’s concerns that a therapy designed to prevent overgrowth of bone for cases of fibrodysplasia ossificans progressiva might actually stunt children’s growth. So they ordered a halt to any treatments for kids 14 and under. Meek left soon after to run a startup in Boston. And today the Paris-based biotech is grappling with the independent monitoring committee’s decision that their Phase III had failed a futility test.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 70,600+ biopharma pros reading Endpoints daily — and it's free.

Roche's check­point play­er Tecen­triq flops in an­oth­er blad­der can­cer sub­set

Just weeks after Merck’s star checkpoint inhibitor Keytruda secured FDA approval for a subset of bladder cancer patients, Swiss competitor Roche’s Tecentriq has failed in a pivotal bladder cancer study.

The 809-patient trial — IMvigor010 — tested the PD-L1 drug in patients with muscle-invasive urothelial cancer (MIUC) who had undergone surgery, and were at high risk for recurrence.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 70,600+ biopharma pros reading Endpoints daily — and it's free.