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.

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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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.

Nick Plugis, Avak Kahvejian, Cristina Rondinone, Milind Kamkolkar and Chad Nusbaum. (Cellarity)

Cel­lar­i­ty, Flag­ship's $50M bet on net­work bi­ol­o­gy, mar­ries ma­chine learn­ing and sin­gle-cell tech for drug dis­cov­ery

Cellarity started with a simple — but far from easy — idea that Avak Kahvejian and his team were floating around at Flagship Pioneering: to digitally encode a cell.

As he and his senior associate Nick Plugis dug deeper into the concept, they found that most of the models others have developed take a bottom-up approach, where they assemble the molecules inside cells and the connections between them from scratch. What if they opt for a top-down approach, aided by single-cell transcriptomics and machine learning, to gauge the behavior of the entire cellular network?

Sanofi’s big week in­cludes a promis­ing PhI­II for an or­phan dis­ease drug, with plans for a pitch to the FDA

The biopharma R&D food chain is paying off with a plan at Sanofi to pitch regulators on a new drug for an orphan disease called cold agglutinin disease.

The pharma giant ushered out a statement Tuesday morning — after it spelled out plans to radically restructure the company, abandoning cardio and diabetes research altogether — saying that their C1s inhibitor sutimlimab had cleared the pivotal study.