In his lat­est broad­side on drug prices, Trump plays the Medicare ne­go­ti­a­tions card

Don­ald Trump plans to use the mas­sive lever­age of Medicare and Med­ic­aid spend­ing as a tool to rein in prices — a tac­tic that has long been feared by bio­phar­ma.

In an in­ter­view late Sat­ur­day with the Wash­ing­ton Post, the pres­i­dent-elect al­so said he was putting the fi­nal touch­es to a new “in­sur­ance for every­one” plan to re­place Oba­macare, though he de­clined to pro­vide specifics.

Trump set off a 5-alarm in­dus­try­wide fire alert last week when he in­sist­ed dur­ing an im­promp­tu di­a­tribe dur­ing his press con­fer­ence that phar­ma com­pa­nies had been “get­ting away with mur­der” on drug prices, which he vowed to end once he gets in of­fice in a few days. In the most re­cent in­ter­view, he piled on the bio­phar­ma in­dus­try, in­sist­ing that low­er­ing drug prices was cen­tral to mod­er­at­ing the price of health­care and the in­sur­ance need­ed to cov­er care.

“They’re po­lit­i­cal­ly pro­tect­ed, but not any­more,” he told the Post about phar­ma, adding lat­er that he was un­con­cerned about the po­ten­tial dis­rup­tion in stock prices. And that’s a com­ment that could weigh heav­i­ly on stocks as an­a­lysts pon­der the im­pact.

While Trump touched on di­rect Medicare ne­go­ti­a­tions dur­ing the elec­tion, many of the most in­flu­en­tial lead­ers of the in­dus­try had thought that they were in a still cozy spot with the in­com­ing ad­min­is­tra­tion, with time to pur­sue a ne­go­ti­at­ed peace af­ter brand­ed drug prices had es­ca­lat­ed rapid­ly in re­cent years. In­stead, phar­ma ex­ecs find them­selves pil­lo­ried by a soon-to-be-pres­i­dent as he spurs pop­ulist wrath in fa­vor of con­tro­ver­sial changes to health­care pol­i­cy.

That be­came clear dur­ing his re­cent press con­fer­ence:

“Our drug in­dus­try has been dis­as­trous. They’re leav­ing left and right. They sup­ply our drugs but they don’t make them here, to a large ex­tent. And the oth­er thing we have to do is cre­ate new bid­ding pro­ce­dures for the drug in­dus­try. They’re get­ting away with mur­der. Phar­ma has a lot of…lob­by­ists and a lot of pow­er and there’s very lit­tle bid­ding on drugs.

“We’re the largest buy­er of drugs in the world, and yet we don’t bid prop­er­ly. We’re go­ing to start bid­ding. We’re go­ing to save bil­lions of dol­lars over a pe­ri­od of time.”

Trump has a habit of speak­ing off the cuff, which can lead to some con­sid­er­able con­fu­sion. The main thrust of that com­ment was that he was fo­cus­ing on low­er­ing the price of meds, rather than tar­get­ing the glob­al drug man­u­fac­tur­ing net­work or ac­tu­al­ly es­tab­lish­ing a tra­di­tion­al kind of bid­ding mech­a­nism for fed­er­al con­tracts. In the Post in­ter­view, though, Trump al­so said that he want­ed to see more drug man­u­fac­tur­ing in the US. And he seemed pre­pare to un­cork his Twit­ter guns to help make that hap­pen.

Medicare has been pre­vent­ed by law — or, per­haps more ac­cu­rate­ly, at the in­sis­tence of law­mak­ers — that it not ne­go­ti­ate di­rect­ly on the price of a drug, though fed­er­al ben­e­fit man­agers do that on their own ac­cord. Those net prices, though, are not pub­lic.

If Medicare does di­rect­ly ne­go­ti­ate deep dis­counts, with per­haps the great­est lever­age among all buy­ers, it could well set up a trans­par­ent base­line on drug prices that every­one could work with, while al­so dri­ving new ini­tia­tives pre­vent­ing state gov­ern­ments from pay­ing more. And that could well wind up cost­ing drug man­u­fac­tur­ers dear­ly, far more than the sin­gle dig­it an­nu­al hikes many had hoped to use as a com­pro­mise for re­spon­si­ble pric­ing prac­tices.

Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

Daniel O'Day [via AP Images]

UP­DAT­ED: Gilead un­leash­es a $5B late-stage cash al­liance with Gala­pa­gos — lay­ing out O'­Day's R&D strat­e­gy

Daniel O’Day is executing his first major development deal since taking over as CEO of Gilead $GILD. And he’s going in deep to ally himself with a longstanding partner.

O’Day announced today that he is spending $5 billion in cash to add new late-stage drugs to Gilead’s pipeline, picking up rights to Galapagos’ $GLPG Phase III IPF drug GLPG1690 alongside adoption of the biotech’s Phase IIb drug GLPG1972 for osteoarthritis. And Gilead is also putting billions more on the table for milestones, gaining options for everything else in Galapagos’ pipeline, with a shot at all rights outside of Europe.

Altogether, Gilead is gaining rights to 6 clinical-stage assets, 20 preclinical programs and everything else being hatched in translation.

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Hal Bar­ron's team at GSK scores a win with pos­i­tive Ze­ju­la PhI­II front­line study — now comes the hard part

Score one for Hal Barron and the new R&D team steering GlaxoSmithKline’s pipeline.

The pharma giant reported this morning that its recently acquired PARP, Zejula (niraparib), hit the primary endpoint on progression-free survival in a frontline maintenance setting for women suffering ovarian cancer — following chemo and regardless of their BRCA status.

GSK bet $5 billion on the Tesaro buyout primarily to get this drug, drawing the shaking heads of biopharma. Why pay a big premium for a drug like this when AstraZeneca was going from strength to strength with Lynparza, ran the argument, having won a hugely important accelerated approval to jump out ahead — way ahead — of the rest of the PARP players? Lynparza — now co-owned by a powerhouse cancer team at Merck — won the first approval in frontline maintenance in ovarian cancer.

Alk­er­mes adds bipo­lar I dis­or­der to its FDA wish­list; Con­go con­firms first Ebo­la case in large city

→ An ever-ambitious Alkermes $ALKS team plans to add bipolar I disorder to its list of conditions for ALKS-3831, which it plans to pitch to the FDA in Q4. Alkermes says they were persuaded to add bipolar I disorder after a pre-NDA meeting with the agency, which came about 7 months after the biotech reported positive data for schizophrenia. The drug is a combo using olanzapine/samidorphan, which they hope will be shown to be as effective as olanzapine without the substantial increase in the risk of weight gain.

Pe­ter Kolchin­sky and Raj Shah raise a $300M fund de­vot­ed to biotech star­tups

Peter Kolchinsky and Raj Shah have another $300 million-plus to play with on the biotech venture side of their investment business. 

The two announced Monday morning that they’ve put together their first pure-play venture fund at RA Capital Management, which has been known to bet on just about every angle in healthcare investing — from rounds to follow-on investments at public companies. This new fund of theirs arrives well into a go-go era of new startup financing, with a particular focus on building new biotechs.

Boehringer buys Swiss biotech in its lat­est M&A deal, go­ing the next-gen can­cer vac­cine route

Boehringer Ingelheim has snapped up a Swiss biotech startup and added their group as a new platform for the oncology pipeline. 

The German biopharma company has bagged Geneva-based AMAL Therapeutics, paying out an unspecified upfront in a $358 million deal — cash, milestones and everything else, all in. Plus there’s 100 million euros on the line for commercial milestones.

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Ab­b­Vie beefs up the on­col­o­gy pipeline, bag­ging an up­start STING play­er with its own unique ap­proach

AbbVie isn’t letting its $63 billion buyout of Allergan stop its M&A/deals team from continuing their work.

Monday morning we learned that the pharma giant is snapping up tiny Mavupharma out of Seattle, a Frazier-backed startup that has its own unique take on STING — which is on the threshold of their first clinical trial.

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Billing it­self as the first AI biotech to launch hu­man tri­als, Re­cur­sion adds $121M C round

Billing itself as the first AI biotech with programs in the clinic, Salt Lake City-based Recursion now has a $121 million bankroll to start gathering human data to see if it’s on the right track. 

“We’re trying to build this discovery engine,” Recursion CEO Chris Gibson tells me ahead of the C round news. “We now have the first two programs in the clinic.” And that, he adds, qualifies as a first for any AI establishment “that actually have something in the clinic.”

FDA bats back As­traZeneca's SGLT di­a­betes drug for Type 1 di­a­betes — block­ing a class on safe­ty fears

The FDA has just fired its latest salvo at the SGLT class of diabetes drugs, blowing up some commercial opportunity at AstraZeneca as part of the collateral damage.

The pharma giant reported early Monday that the FDA has rejected its blockbuster drug Farxiga for Type 1 diabetes that can’t be controlled by insulin. And while the pharma giant maintained its usual grim silence in the face of a setback, this one should be easy to interpret.