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.

Im­ple­ment­ing re­silience in the clin­i­cal tri­al sup­ply chain

Since January 2020, the clinical trials ecosystem has quickly evolved to manage roadblocks impeding clinical trial integrity, and patient care and safety amid a global pandemic. Closed borders, reduced air traffic and delayed or canceled flights disrupted global distribution, revealing how flexible logistics and supply chains can secure the timely delivery of clinical drug products and therapies to sites and patients.

Pascal Soriot (AP Images)

UP­DAT­ED: As­traZeneca, Ox­ford on the de­fen­sive as skep­tics dis­miss 70% av­er­age ef­fi­ca­cy for Covid-19 vac­cine

On the third straight Monday that the world wakes up to positive vaccine news, AstraZeneca and Oxford are declaring a new Phase III milestone in the fight against the pandemic. Not everyone is convinced they will play a big part, though.

With an average efficacy of 70%, the headline number struck analysts as less impressive than the 95% and 94.5% protection that Pfizer/BioNTech and Moderna have boasted in the past two weeks, respectively. But the British partners say they have several other bright spots going for their candidate. One of the two dosing regimens tested in Phase III showed a better profile, bringing efficacy up to 90%; the adenovirus vector-based vaccine requires minimal refrigeration, which may mean easier distribution; and AstraZeneca has pledged to sell it at a fraction of the price that the other two vaccine developers are charging.

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Vas Narasimhan, Novartis CEO (Jason Alden/Bloomberg via Getty Images)

Vas Narasimhan's 'Wild Card' drugs: No­var­tis CEO high­lights po­ten­tial jack­pots, as well as late-stage stars, in R&D pre­sen­ta­tion

Novartis is always one of the industry’s biggest R&D spenders. As they often do toward the end of each year, company execs are highlighting the drugs they expect will most likely be winners in 2021.

And they’re also dreaming about some potential big-time lottery tickets.

As part of its annual investor presentation Tuesday, where the company allows investors and analysts to virtually schmooze with the bigwigs, Novartis CEO Vas Narasimhan will outline what he thinks are the pharma’s “Wild Cards.” The slate of five experimental drugs are those that Novartis hopes can be high-risk, high-reward entrants into the market over the next half-decade or so, and cover a wide range of indications.

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Pur­due Phar­ma pleads guilty in fed­er­al Oxy­Con­tin probe, for­mal­ly rec­og­niz­ing it played a part in the opi­oid cri­sis

Purdue Pharma, the producer of the prescription painkiller OxyContin, admitted Tuesday that, yes, it did contribute to America’s opioid epidemic.

The drugmaker formally pleaded guilty to three criminal charges, the AP reported, including getting in the way of the DEA’s efforts to combat the crisis, failing to prevent the painkillers from ending up on the black market and encouraging doctors to write more painkiller prescriptions through two methods: paying them in a speakers program and directing a medical records company to send them certain patient information. Purdue’s plea deal calls for $8.3 billion in criminal fines and penalties, but the company is only liable for a fraction of that total — $225 million.

John Maraganore, Alnylam CEO (Scott Eisen/Bloomberg via Getty Images)

UP­DAT­ED: Al­ny­lam gets the green light from the FDA for drug #3 — and CEO John Maraganore is ready to roll

Score another early win at the FDA for Alnylam.

The FDA put out word today that the agency has approved its third drug, lumasiran, for primary hyperoxaluria type 1, better known as PH1. The news comes just 4 days after the European Commission took the lead in offering a green light.

An ultra rare genetic condition, Alnylam CEO John Maraganore says there are only some 1,000 to 1,700 patients in the US and Europe at any particular point. The patients, mostly kids, suffer from an overproduction of oxalate in the liver that spurs the development of kidney stones, right through to end stage kidney disease.

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PhRMA sues Trump gov­ern­ment over drug im­por­ta­tion rule — days be­fore it's set to be ef­fec­tive

Ever since President Donald Trump floated the idea of using state-sponsored importation to lower drug prices, PhRMA has made its opposition abundant. Not only is the proposal dangerous and futile,  but the trade group has also argued that it may even be illegal.

Now that the FDA has issued its final rule permitting states to bring certain drugs from Canada, PhRMA is taking the government to court — just a few days before the rule is slated to take effect.

The ad­u­canum­ab co­nun­drum: The PhI­II failed a clear reg­u­la­to­ry stan­dard, but no one is cer­tain what that means any­more at the FDA

Eighteen days ago, virtually all of the outside experts on an FDA adcomm got together to mug the agency’s Billy Dunn and the Biogen team when they presented their upbeat assessment on aducanumab. But here we are, more than 2 weeks later, and the ongoing debate over that Alzheimer’s drug’s fate continues unabated.

Instead of simply ruling out any chance of an approval, the logical conclusion based on what we heard during that session, a series of questionable approvals that preceded the controversy over the agency’s recent EUA decisions has come back to haunt the FDA, where the power of precedent is leaving an opening some experts believe can still be exploited by the big biotech.

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The flu virus (CDC)

Roche tacks on an­oth­er Xofluza in­di­ca­tion as flu sea­son meets pan­dem­ic

Xofluza was heralded as the first new flu drug in 20 years when it got the FDA OK back in 2018. But even so, Roche saw tough competition from cheaper Tamiflu generics that appeared to be nearly as — if not just as — effective.

Now, the pharma says the drug also can be used to prevent influenza after exposure, snagging a new approval and adding to Xofluza’s appeal as flu season meets the pandemic.

A poll sug­gests vac­cine da­ta boost­ed Pfiz­er's pub­lic im­age, but oth­er da­ta point to long road ahead

For much of the pharmaceutical industry, the pandemic presented an opportunity: to prove their value to the world and turn public opinion around on a business much of the country had come to disdain.

That theory — that helping pull the country from a pandemic could neutralize years of anger over high drug prices — was put to its biggest test this month, as three different drugmakers announced data from their Covid-19 vaccines, offering the first major evidence that industry-built inoculations could turn the tide of the outbreak in the US.