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.

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Cy­to­ki­net­ics’ ALS drug fails PhI­II, leav­ing the biotech with a sin­gle late-stage prospect

Cytokinetics’ candidate for the muscle disease amyotrophic lateral sclerosis, or ALS, failed a Phase III trial, the Bay Area biotech announced Friday morning.

At a second interim analysis of the trial, an independent review committee recommended that Cytokinetics discontinue its COURAGE-ALS trial for reldesemtiv, as it “found no evidence of effect” compared to placebo on the primary or key secondary endpoints.

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Mathai Mammen, FogPharma's next CEO

Math­ai Mam­men hands in J&J's R&D keys to lead Greg Ver­dine’s Fog­Phar­ma 

In the early 1990s, Mathai Mammen was a teaching assistant in Greg Verdine’s Science B46 course at Harvard. In June, the former R&D head at Johnson & Johnson will succeed Verdine as CEO, president and chair of FogPharma, the same month the seven-year-old biotech kickstarts its first clinical trial.

After leading R&D at one of the largest drugmakers in the world, taking the company through more than half a dozen drug approvals in the past few years, not to mention a Covid-19 vaccine race, Mammen departed J&J last month and will take the helm of a Cambridge, MA biotech attempting to go after what Verdine calls the “true emperor of all oncogenes” — beta-catenin.

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Sen­ate Fi­nance Com­mit­tee lobs more bi­par­ti­san pres­sure on­to PBMs

Congress is honing in on how it wants to overhaul the rules of the road for pharmacy benefit managers, with a Senate Finance Committee hearing Thursday serving as the latest example of the Hill’s readiness to make changes to how pharma middlemen operate.

While pledging to ensure patients and pharmacies “don’t get a raw deal,” Finance Committee Chair Ron Wyden (D-OR) laid out the beginning of what looks like a major bipartisan effort — moves the PBM industry is likely to challenge vigorously.

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Nicklas Westerholm, Egetis Therapeutics CEO

Ac­qui­si­tion talks on­go­ing for Swedish rare dis­ease biotech Egetis, shares up al­most 40%

Shares of the Sweden-based rare disease biotech Egetis Therapeutics skyrocketed on Thursday afternoon as the company said it’s engaged in “ongoing discussion” with external parties regarding a “potential acquisition.”

Egetis confirmed rumors with a statement on Thursday while noting that there is no certainty that a takeover offer will be made.

Nonetheless, the possibility of an acquisition has shot up Egetis’ share price. By the afternoon on Thursday, its stock price was {$EGTX.ST} up over 38%. An Egetis spokesperson told Endpoints News in an email that it has no further comments.

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Lu­pus drug de­vel­op­ment mar­ket heat­ing up, while FDA links with ad­vo­ca­cy group to fur­ther ac­cel­er­ate re­search

The long-underserved systemic lupus erythematosus (SLE) market is suddenly buzzing with treatment possibilities. Less than two years after AstraZeneca’s approval for Saphnelo — the first new SLE drug in a decade and joining just one other approved in GSK’s Benlysta – the pipeline of potential drugs numbers in the dozens.

Although most are very early stage — Spherix Global Insights estimates five in Phase II/III — the pharma R&D enthusiasm is catching on among doctors, patients and advocacy groups. On Wednesday, the Lupus Research Alliance and the FDA formed a novel private-public partnership called Lupus Accelerating Breakthroughs Consortium (Lupus ABC) to help advance lupus clinical trial success.

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CHMP gives thumbs-up for We­govy use in ado­les­cents, along with nine new drug rec­om­men­da­tions

The European Medicines Agency’s Committee for Medicinal Products for Human Use (CHMP) recommended nine drugs for approval this week while also giving thumbs up for six expanded indications, including Novo Nordisk’s approved obesity medication Wegovy for younger people. Wegovy is already approved as an obesity treatment in the EU for adults, and the new indication would allow prescriptions for adolescents aged 12 and older.

Sar­to­rius to ac­quire French man­u­fac­tur­er for $2.6B+ in cell and gene ther­a­py play

The German life science group Sartorius will be picking up French contract manufacturer Polyplus for the price of €2.4 billion, or $2.6 billion.

On Friday, Sartorius announced the acquisition through its French subgroup, Sartorius Stedim Biotech, which will be acquiring Polyplus from private investors ARCHIMED and WP GG Holdings IV. Polyplus has 270 employees and produces materials and components that go into making viral vectors that are used in cell and gene therapies. This includes DNA/RNA reagents as well as plasmid DNA. Polyplus has locations in France, Belgium, China and the US.

Green­Light re­ceives buy­out of­fer; Apol­lomics com­pletes SPAC merg­er

RNA biotech GreenLight Biosciences has been handed an offer for potential acquisition.

GreenLight said in a release that it has received a non-binding “indication of interest” from Fall Line Endurance Fund to acquire GreenLight’s capital stock for $0.60 per share in cash. The release said any potential agreement between the two parties would depend on certain conditions.

Through a special committee, the biotech will evaluate the offer but added there’s no certainty a deal will go forward. GreenLight will also not make any more announcements until a deal comes through or “otherwise determines” a statement is necessary.