'Rigged' pay­ment schemes by in­sur­ers and PBMs is block­ing the switch to biosim­i­lars, says FDA com­mis­sion­er

Hav­ing called out brand name drug com­pa­nies for de­lay­ing mar­ket en­try of gener­ic drugs, FDA Com­mis­sion­er Scott Got­tlieb made in­sur­ers and phar­ma­cy ben­e­fit man­agers his lat­est tar­gets to blame for lag­gard biosim­i­lar de­vel­op­ment.

In a speech ad­dress­ing a con­fer­ence of health in­sur­ers, Got­tlieb con­demned a “rigged pay­ment scheme” that dis­in­cen­tivizes pay­ers from switch­ing to biosim­i­lars — a no­tion some have called a “re­bate trap.”

“(W)hile we see a grow­ing num­ber of spon­sors pur­su­ing biosim­i­lar de­vel­op­ment pro­grams, the eco­nom­ics of de­vel­op­ment are cur­rent­ly un­sta­ble; and the pipeline of biosim­i­lar prod­ucts that we hope for could be dra­mat­i­cal­ly af­fect­ed by the weak­en­ing of mar­ket in­cen­tives to bring these prod­ucts to pa­tients,” he said in pre­pared re­marks.

Got­tlieb has pre­vi­ous­ly gone on the record blast­ing “pay for de­lay” tac­tics de­ployed by drug mak­ers, against which in­sur­ers and PBMs alike have spo­ken out. But in biosim­i­lars, they are com­plic­it in a slight­ly dif­fer­ent con­struct.

Biosim­i­lars, Got­tlieb point­ed out, are much more so­phis­ti­cat­ed and thus more ex­pen­sive to de­vel­op than gener­ics. When they launch, the ini­tial dis­count they of­fer over brand­ed drugs is of­ten in­suf­fi­cient to off­set the re­bates al­ready of­fered on the bi­o­log­ics. Add that to the small num­ber of pa­tients who would switch im­me­di­ate­ly, and there’s no rea­son for PBMs to even try switch­ing.  

De­spite the FDA’s ef­forts to help by smooth­ing the path for biosim­i­lar ap­proval, on­ly three out of nine ap­proved biosim­i­lars are cur­rent­ly mar­ket­ed in the US.

“(W)e can solve on­ly one part of this equa­tion,” Got­tlieb said.

He urged pay­ers to do their part by mak­ing biosim­i­lars the de­fault op­tion for new­ly di­ag­nosed pa­tients. Pay­ors can al­so lead the way in for­mu­la­ry de­sign by mak­ing biosim­i­lars the de­fault op­tion for new­ly di­ag­nosed pa­tients, and con­sid­er shar­ing the sav­ings with pa­tients by waiv­ing co-in­sur­ance. He gave a shout out to Unit­ed Health­care, which an­nounced yes­ter­day that it would start pass­ing full re­bates on­to peo­ple on its plans. He asked ear­li­er in the speech:

Af­ter all, what’s the point of a big co-pay on a cost­ly can­cer drug? Is a pa­tient re­al­ly in a po­si­tion to make an eco­nom­i­cal­ly-based de­ci­sion? Is the co-pay go­ing to dis­cour­age overuti­liza­tion? Is some­one in this sit­u­a­tion vol­un­tary seek­ing chemo?

The Phar­ma­ceu­ti­cal Care Man­age­ment As­so­ci­a­tion, which rep­re­sents PBMs, fired back in a state­ment:

It’s un­fair to blame pay­ers – who pay 2/3 the cost of drug ben­e­fits – for seek­ing the low­est costs in a mar­ket­place where they have no con­trol over the prices drug­mak­ers set, how quick­ly FDA ap­proves biosim­i­lars, or when FDA will fi­nal­ize work­able in­ter­change­abil­i­ty guide­lines to in­crease up­take of biosim­i­lars.

Like­wise pay­ers – not the phar­ma­cy ben­e­fit man­agers (PBMs) they hire to ne­go­ti­ate dis­counts – de­ter­mine how re­bates and oth­er sav­ings are al­lo­cat­ed to re­duce pre­mi­ums, out-of-pock­et costs and oth­er ex­pens­es. In­creas­ing­ly, large com­mer­cial pay­ers are re­quir­ing 100% of such re­bates to be passed through to them di­rect­ly.”

Nonethe­less, Got­tlieb’s re­marks drew praise from many health­care com­men­ta­tors, with for­mer Cen­ters for Medicare and Med­ic­aid Ser­vices ad­min­is­tra­tor Andy Slavitt call­ing the speech “ex­tra­or­di­nar­i­ly frank.”


Im­age: FDA Com­mis­sion­er Scott Got­tlieb.

Fol­low­ing news of job cuts in Eu­ro­pean R&D ops, Sanofi con­firms it’s of­fer­ing US work­ers an 'ear­ly ex­it'

Ear­li­er in the week we learned that Sanofi was bring­ing out the bud­get ax to trim 466 R&D jobs in Eu­rope, re­tool­ing its ap­proach to car­dio as re­search chief John Reed beefed up their work in can­cer and gene ther­a­pies. And we’re end­ing the week with news that the phar­ma gi­ant has al­so been qui­et­ly re­duc­ing staff in the US, tar­get­ing hun­dreds of jobs as the com­pa­ny push­es vol­un­tary buy­outs with a fo­cus on R&D sup­port ser­vices.

Why would the FDA ap­prove an­oth­er con­tro­ver­sial drug to spur a woman’s li­bido with these da­ta? And why no ex­pert pan­el re­view?

AMAG Pharmaceuticals’ newly approved drug for spurring women’s sexual desire may never make much money, but it’s a big hit at sparking media attention.

The therapy — Vyleesi (bremelanotide) — got the green light from regulators on Friday evening, swiftly lighting up a range of stories around the world, from The New York Times to The Guardian. Several headlines inevitably referred to it as the “female Viagra,” invoking Pfizer’s old erectile dysfunction blockbuster.

But the two drugs have little in common.

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Which top 10 big phar­mas have the most to gain — or lose — over the next 5 years?

When Evaluate Pharma crunched the likely drug sales numbers for the big 10, 2 stood out. 

Takeda, with its big Shire buyout under its belt, is set to almost double its worldwide sales record for 2018 over 5 years, putting it in the big 10 — the 9th spot, to be exact — which is exactly where CEO Christophe Weber wants to be. 

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Roger Perlmutter. Merck via webcast

'Our lega­cy mat­ter­s': Mer­ck maps out Keytru­da king­dom while spot­light­ing ad­vances in vac­cines, hos­pi­tal care

“You can for the mo­ment stop tak­ing notes. You can put down your pens and your pad. I have no slides. I have no sub­stan­tive da­ta. I have no pitch.”

So be­gan Roger Perl­mut­ter’s brief ap­pear­ance on­stage at Mer­ck’s first in­vestor day in five years, where he dived in­to the com­pa­ny’s his­to­ry dat­ing back to 1933. The first em­ploy­ees at Mer­ck Re­search Lab­o­ra­to­ries, hand­picked by founder George W. Mer­ck, were crit­i­cal to Mer­ck’s abil­i­ty to achieve clin­i­cal and com­mer­cial suc­cess.

How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

J&J's Es­ke­t­a­mine, at cur­rent price, is 'low val­ue for mon­ey' — ICER

For John­son & John­son’s $JNJ phar­ma­ceu­ti­cal ver­sion of the hal­lu­cino­genic anes­thet­ic ke­t­a­mine — es­ke­t­a­mine — to be cost-ef­fec­tive for use in treat­ment-re­sis­tant de­pres­sion in the long term, its list price must be cut by up to half, ICER con­clud­ed in its fi­nal re­port on Thurs­day.

Cog­nizant of the myr­i­ad of ap­proved an­ti­de­pres­sants that of­ten don’t work, the US reg­u­la­tor en­dorsed J&J’s es­ke­t­a­mine, brand­ed as  — Spra­va­to — in March for treat­ment-re­sis­tant de­pres­sion, con­scious that the orig­i­nal cat tran­quil­iz­er is fre­quent­ly used off-la­bel for se­vere de­pres­sion.

In starved an­tibi­ot­ic field, Melin­ta soars as FDA grants speedy drug re­view

Such is the state of af­fairs in an­tibi­ot­ic land that the FDA agree­ing to pri­or­i­ty re­view an ap­pli­ca­tion to ex­pand the use of an an­tibi­ot­ic can rock­et up a stock more than two-fold.

On Wednes­day, Melin­ta Ther­a­peu­tics said its ap­proved an­tibi­ot­ic Baxdela had been grant­ed pri­or­i­ty re­view for use in com­mu­ni­ty-ac­quired bac­te­r­i­al pneu­mo­nia (CAPB). The FDA is ex­pect­ed to make its de­ci­sion by Oc­to­ber 24. Shares of the Con­necti­cut drug­mak­er $ML­NT cat­a­pult­ed, clos­ing up near­ly 224% at $6.41.

Brent Saunders at an Endpoints News event in 2017 — File photo

An­a­lyst call with Al­ler­gan ex­ecs stokes an­tic­i­pa­tion of a plan to split the com­pa­ny in ‘a month or two’

So what’s up at Al­ler­gan?

Ear­li­er this week the ubiq­ui­tous Ever­core ISI an­a­lyst Umer Raf­fat was on the line with com­pa­ny ex­ec­u­tives to probe in­to the lat­est on the num­bers as well as CEO Brent Saun­ders’ re­cent de­c­la­ra­tion that he’d be do­ing some­thing de­fin­i­tive to help long-suf­fer­ing in­vestors who have watched their shares dwin­dle in val­ue.

He came away with the im­pres­sion that a sig­nif­i­cant com­pa­ny split is on the way. And not on some dis­tant time hori­zon.

John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.

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