UP­DAT­ED: In­dus­try gets the edge: Medicare drug price ne­go­ti­a­tions will on­ly cost bio­phar­ma 10 drugs over the next 30 years

The House on Fri­day morn­ing passed a bill that will al­low Medicare to ne­go­ti­ate pre­scrip­tion drug prices for a lim­it­ed num­ber of sin­gle source drugs, but it’s a deal that will on­ly make a mi­nor dent in the pock­et­book of the bio­phar­ma in­dus­try.

The ne­go­ti­a­tions and oth­er pric­ing pro­vi­sions, like in­sulin and se­nior out-of-pock­et caps, are part of a sprawl­ing $1.8 tril­lion spend­ing pack­age that the De­moc­rats and Biden have been push­ing for all sum­mer. The bill, which re­lies on the phar­ma-re­lat­ed sav­ings to help pay for it, now moves to the Sen­ate.

PhRMA im­me­di­ate­ly blast­ed the bill’s pas­sage Fri­day, say­ing it will “throw sand in the gears of med­ical progress,” but the bill is large­ly a vic­to­ry for the in­dus­try.

CBO said Thurs­day that al­low­ing Medicare to ne­go­ti­ate drug prices — the plan is to start with ne­go­ti­a­tions on 10 of the most ex­pen­sive drugs in 2025 and work up to 20 drugs by 2028 — will save the gov­ern­ment (and cost in­dus­try) about $76 bil­lion over 10 years, and about $85 bil­lion in in­fla­tion re­bate penal­ties if drug prices rise above cer­tain lev­els.

That’s a far cry from House Speak­er Nan­cy Pelosi’s for­mer drug price ne­go­ti­a­tions bill, known as HR3, which the CBO scored in Au­gust as $456 bil­lion in sav­ings over 10 years. The lat­est bill and CBO score show the ex­tent to which the phar­ma in­dus­try’s lob­by­ists wa­tered down the Build Back Bet­ter Act.

Loren Adler, as­so­ciate di­rec­tor of the USC-Brook­ings Scha­ef­fer Ini­tia­tive for Health Pol­i­cy and a drug pric­ing ex­pert, told End­points News, “Def­i­nite­ly in­ter­est­ing to see that even the scaled-back ne­go­ti­a­tion pol­i­cy is ex­pect­ed to save $76 bil­lion over 10 years,” or about 17% of what the full HR3 ne­go­ti­a­tion would save in an ap­ples-to-ap­ples com­par­i­son.

Even with the re­bates, to­tal­ing about $160 bil­lion over 10 years — which is about what the to­tal cost will be to the phar­ma in­dus­try (since the re­bate rule was go­ing away any­ways), “is a pret­ty small slice” of the in­dus­try’s to­tal rev­enues, Adler said.

PhRMA, which man­aged to turn cer­tain mem­bers of Con­gress with fund­ing and al­ter the ne­go­ti­a­tions with an army of lob­by­ists, pre­vi­ous­ly es­ti­mat­ed about $560 bil­lion in to­tal rev­enue from bio­phar­ma­ceu­ti­cal busi­ness­es in 2017 alone, so $150 bil­lion over 10 years would be about 3% of in­dus­try rev­enue over the same pe­ri­od.

Sim­i­lar­ly, the CBO es­ti­mat­ed that about 10 few­er drugs (out of a cal­cu­lat­ed to­tal of 1,300 drug ap­provals) over 30 years would not be de­vel­oped as a re­sult of the lost funds.

“The amounts in this es­ti­mate are in the mid­dle of the dis­tri­b­u­tion of pos­si­ble out­comes, by CBO’s as­sess­ment, and they are sub­ject to un­cer­tain­ty. CBO did not pre­dict what kind of drugs would be af­fect­ed or an­a­lyze the ef­fects of for­gone in­no­va­tion on pub­lic health,” the score said.

While House Re­pub­li­cans said Thurs­day evening that the CBO warned these lost drugs could spell the end for im­por­tant can­cer or Alzheimer’s treat­ments in de­vel­op­ment, the re­al­i­ty is that the bill’s en­act­ment could just as well spell the end of de­vel­op­ing 10 more me-too drugs, or 10 more ex­pen­sive drugs with no im­proved ben­e­fits over cur­rent treat­ments.

What the pas­sage of such a bill might do, how­ev­er, is open up the flood­gates for more drug pric­ing ne­go­ti­a­tions in the fu­ture.

“BB­BA’s ne­go­ti­a­tion process will cer­tain­ly give us ex­pe­ri­ence with drug price reg­u­la­tion that will pro­vide a lot of in­for­ma­tion and in­form fu­ture re­form ef­forts. As a re­sult, it prob­a­bly in­creas­es the odds of ne­go­ti­a­tion get­ting ex­pand­ed in the fu­ture, es­pe­cial­ly be­cause rel­a­tive­ly small changes to the process could gen­er­ate sub­stan­tial deficit re­duc­tion,” Adler not­ed.

Oth­er pro­vi­sions in the bill would cap out-of-pock­et spend­ing for se­niors at $2,000, be­gin­ning in 2024, and lim­it what peo­ple pay out-of-pock­et for in­sulin to $35 per month, be­gin­ning in 2023 (but that doesn’t in­clude a cap for those who have di­a­betes and are unin­sured). The bill al­so pro­vides $300 mil­lion for FDA in­fra­struc­ture.

IDC: Life Sci­ences Firms Must Em­brace Dig­i­tal Trans­for­ma­tion Now

Pre-pandemic, the life sciences industry had settled into a pattern. The average drug took 12 years and $2.9 billion to bring to market, and it was an acceptable mode of operations, according to Nimita Limaye, Research Vice President for Life Sciences R&D Strategy and Technology at IDC.

COVID-19 changed that, and served as a proof-of-concept for how technology can truly help life sciences companies succeed and grow, Limaye said. She recently spoke about industry trends at Egnyte’s Life Sciences Summit 2022. You should watch the entire session, free and on-demand, but here’s a brief recap of why she’s urging life sciences companies to embrace digital transformation.

Tom Barnes, Orna Therapeutics CEO

UP­DAT­ED: 'We have failed to fail': Mer­ck gam­bles $250M cash on a next-gen ap­proach to mR­NA — af­ter punt­ing its big al­liance with Mod­er­na

Merck went in deep on its collaboration with Moderna on new mRNA programs, and dropped them all over time, including their RSV partnership. But after writing off what turned out as one of the most successful infectious disease players in the business, Merck is coming in this morning with a new preclinical alliance — this time embracing a biotech that hopes to eventually outdo the famously successful mRNA in a new run at vaccines and therapeutics.

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Bayer's first DTC ad campaign for chronic kidney disease drug Kerendia spells out its benefits

Bay­er aims to sim­pli­fy the com­plex­i­ties of CKD with an ABC-themed ad cam­paign

Do you know the ABCs of CKD in T2D? Bayer’s first ad campaign for Kerendia tackles the complexity of chronic kidney disease with a play on the acronym (CKD) and its connection to type 2 diabetes (T2D).

Kerendia was approved last year as the first and only non-steroidal mineralocorticoid receptor antagonist to treat CKD in people with type 2 diabetes.

In the TV commercial launched this week, A is for awareness, B is for belief and C is for cardiovascular, explained in the ad as awareness of the connection between type 2 and kidney disease, belief that something can be done about it, and cardiovascular events that may be reduced with treatment.

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James Mock, incoming CFO at Moderna

Mod­er­na taps new CFO from PerkinElmer af­ter for­mer one-day CFO oust­ed

When Moderna hired a new CFO last year,  it didn’t expect to see him gone after only one day. Today the biotech named his — likely much more vetted — replacement.

The mRNA company put out word early Wednesday that after the untimely departure of then brand-new CFO Jorge Gomez, it has now found a replacement in James Mock, the soon-to-be former CFO at diagnostics and analytics company PerkinElmer.

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Paul Perreault, CSL Behring CEO

CSL CEO Paul Per­reault de­ter­mined to grow plas­ma col­lec­tion af­ter full-year sales dip

As the ink dries on CSL’s $11.7 billion Vifor buyout, the company posted a dip in profits, due in part to a drop in plasma donations amid the pandemic.

However, CEO Paul Perreault assured investors and analysts on the full-year call that the team has left “no stone unturned” when assessing options to grow plasma volumes. The chief executive also spelled out positive results for the company’s monoclonal antibody garadacimab in hereditary angioedema (HAE), though he isn’t revealing the exact numbers just yet.

Joe Jonas (Photo by Anthony Behar/Sipa USA)(Sipa via AP Images)

So­lo Jonas broth­er car­ries Merz's new tune in Botox ri­val cam­paign

As the lyrics of his band’s 2019 pop-rock single suggest, Joe Jonas is only human — and that means even he gets frown lines. The 33-year-old singer-songwriter is Merz’s newest celebrity brand partner for its Botox rival Xeomin, as medical aesthetics brands target a younger audience.

Merz kicked off its “Beauty on Your Terms” campaign on Tuesday, featuring the Jonas brother in a video ad for its double-filtered anti-wrinkle injection Xeomin.

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Marisol Peron, Genmab SVP of communications and corporate affairs

Gen­mab launch­es cor­po­rate cam­paign am­pli­fy­ing its ‘knock your socks off’ an­ti­bod­ies

Genmab often talks about its “knock-your-socks-off” antibodies — and now the term is getting its own logo and corporate campaign.

The teal and purple logo for the acronym KYSO — Genmab pronounces it “ky-so” — debuts on Wednesday and comes on the heels of Genmab’s newly announced 2030 vision. That aspiration aims to expand Genmab’s drug development beyond oncology to include other serious diseases, while also doubling down on its own drug development.

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Joel Dudley, new partner at Innovation Endeavors (Bosch Health Campus)

For­mer Google CEO’s VC is mak­ing a big­ger push in­to the biotech world, hir­ing promi­nent Ther­a­nos skep­tic

Venture capital firm Innovation Endeavors has mainly had its focus on investments across the tech space, but it has been slowly turning its attention to the biotech world. Now, a new partner is coming into the fold showing that its interest in biotech is likely to grow further.

The Silicon Valley-based company, which is headed up by former Google CEO Eric Schmidt, has brought on Joel Dudley as a partner. According to Dudley’s LinkedIn page, he is joining Innovation Endeavors after serving as the chief science officer of biotech startup Tempus Labs since 2020.

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President Joe Biden signs the Democrats' landmark climate change and health care bill. From L-R: Sen. Joe Manchin (D-WV), Senate Majority Leader Chuck Schumer (D-NY), House Majority Whip James Clyburn (D-SC), Rep. Frank Pallone (D-NJ) and Rep. Kathy Castor (D-FL). (Susan Walsh/AP Images)

Pres­i­dent Biden signs ma­jor drug pric­ing re­forms in­to law: What's com­ing for bio­phar­ma?

President Joe Biden yesterday afternoon signed into law historic, decades-in-the-making new drug pricing reforms as part of a wider reconciliation bill that will likely take a chunk out of biopharma companies’ profits for some blockbusters just prior to generic or biosimilar competition.

The partisan bill (all Democrats in the House and Senate voted for it, and all Republicans voted against it) includes not only Medicare price negotiations — which won’t kick off until 2026, leaving ample time for a legal challenge — but mandatory inflation-related rebates, and a $2,000 annual cap on what seniors’ pay for their prescription drugs.

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