IRA's price ne­go­ti­a­tion pro­vi­sion would've saved Medicare $26.5B from 2018 to 2020, JA­MA study says

New re­search shows Medicare could have saved 5% be­tween 2018-2020, if the In­fla­tion Re­duc­tion Act had been passed in 2018 and Medicare start­ed us­ing the law’s price ne­go­ti­a­tion au­thor­i­ty.

The study pub­lished Fri­day in JA­MA Health Fo­rum — from Har­vard’s Aaron Kessel­heim and Ben Rome, along with Sarosh Na­gar, Alexan­der Egilman, William Feld­man and Jun­yi Wang — looked to eval­u­ate how CMS’ new ne­go­ti­a­tion au­thor­i­ty would be im­ple­ment­ed.

The sim­u­la­tion iden­ti­fied 40 drugs that would have been picked for ne­go­ti­a­tion from 2016-2018, two years be­fore ne­go­ti­at­ed prices would take ef­fect (2018-2020). It in­clud­ed block­busters such as Revlim­id, Hu­mi­ra and Janu­met.

Ac­cord­ing to the Har­vard study, the law re­quires CMS to ne­go­ti­ate a max­i­mum fair price for a drug. The ne­go­ti­at­ed price would then stay in place un­til the cal­en­dar be­gin­ning of the first year, at least nine months af­ter the first gener­ic or biosim­i­lar to a spe­cif­ic drug goes to mar­ket.

How­ev­er, that fair price must fall be­low a “ceil­ing price.” The ceil­ing price can be one of two things, ac­cord­ing to the re­port: the less­er of

  • the av­er­age net price for a drug af­ter cer­tain ne­go­ti­at­ed dis­counts and/or re­bates, or
  • a per­cent­age of the drug’s non­fed­er­al av­er­age man­u­fac­tur­er price (non-FAMP).

That per­cent­age of the av­er­age man­u­fac­tur­er price changes ac­cord­ing to how long the drugs have been ap­proved. For drugs ap­proved less than 12 years ago, the ceil­ing price is 75% of the non-FAMP price. In the 12-16 year gap, it’s 65%, and then it drops down to 40% for any­thing longer than that.

How­ev­er, since the mid­dle 65% cat­e­go­ry will not be in­clud­ed un­til 2030, the re­searchers mod­eled that the ceil­ing price would be 75% of non-FAMP for any drug that was ap­proved less than 16 years ago — for the first five years.

Tak­ing all this in­to ac­count, if the Act was passed in 2018, spend­ing at ceil­ing prices would have been re­duced by an es­ti­mat­ed $26.5 bil­lion.

While there were a few lim­i­ta­tions, such as sav­ings be­ing like­ly to grow over time and not ac­count­ing for sav­ings out­side of Medicare, the re­searchers added that the drug with the largest es­ti­mat­ed sav­ings from ceil­ing prices was lenalido­mide/Revlim­id, which cost Medicare $14.1 bil­lion be­tween 2018-2020 and would have cost on­ly $5.2 bil­lion at the ceil­ing price, cut­ting the price by 63%. Oth­er drugs with es­ti­mat­ed high sav­ings in­clud­ed adal­i­mum­ab/Hu­mi­ra, at 74%.

The group’s find­ings re­flect an­oth­er study on the IRA that came out ear­li­er in 2023 — al­so from Kessel­heim, Rome and Egilman. That study said the In­fla­tion Re­duc­tion Act would have saved Medicare Part B $3.7 bil­lion in the same three years, about 3% of its to­tal spend­ing dur­ing that time.

That study not­ed that it would have been pos­si­ble un­der the law’s new guid­ance on ty­ing price in­creas­es to the rise of in­fla­tion, and 75% of 93 top-sell­ing drugs would have had to owe Medicare re­bates due to price in­creas­es above in­fla­tion.

Has the mo­ment fi­nal­ly ar­rived for val­ue-based health­care?

RBC Capital Markets’ Healthcare Technology Analyst, Sean Dodge, spotlights a new breed of tech-enabled providers who are rapidly transforming the way clinicians deliver healthcare, and explores the key question: can this accelerating revolution overturn the US healthcare system?

Key points

Tech-enabled healthcare providers are poised to help the US transition to value, not volume, as the basis for reward.
The move to value-based care has policy momentum, but is risky and complex for clinicians.
Outsourced tech specialists are emerging to provide the required expertise, while healthcare and tech are also converging through M&A.
Value-based care remains in its early stages, but the transition is accelerating and represents a huge addressable market.

Clay Siegall, Morphimmune CEO

Up­dat­ed: Ex-Seagen chief Clay Sie­gall emerges as CEO of pri­vate biotech

Clay Siegall will be back in the CEO seat, taking the helm of a private startup working on targeted cancer therapies.

It’s been almost a year since Siegall resigned from Seagen, the biotech he co-founded and led for more than 20 years, in the wake of domestic violence allegations by his then-wife. His eventual successor, David Epstein, sold the company to Pfizer in a $43 billion deal unveiled last week.

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No­vo Nordisk oral semaglu­tide tri­al shows re­duc­tion in blood sug­ar, plus weight loss

Novo Nordisk is testing higher levels of its oral version of its GLP-1, semaglutide, and its type 2 diabetes trial results released today show reductions in blood sugar as well as weight loss.

In the Phase IIIb trial, Novo compared its oral semaglutide in 25 mg and 50 mg doses with the 14 mg version that’s currently the maximum approved dose. The trial looked at how the doses compared when added to a stable dose of one to three oral antidiabetic medicines in people with type 2 diabetes who were in need of an intensified treatment.

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Ly­me vac­cine test com­ple­tion is pushed back by a year as Pfiz­er, Val­ne­va say they'll ad­just tri­al

Valneva and Pfizer have adjusted the end date for the Phase III study of their investigational Lyme disease vaccine, pushing it back by a year after issues at a contract researcher led to thousands of US patients being dropped from the test.

In a March 20 update to, Valneva and Pfizer moved the primary completion date on the trial, called VALOR, from the end of 2024 to the end of 2025.

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FDA ad­vi­sors unan­i­mous­ly rec­om­mend ac­cel­er­at­ed ap­proval for Bio­gen's ALS drug

A panel of outside advisors to the FDA unanimously recommended that the agency grant accelerated approval to Biogen’s ALS drug tofersen despite the drug failing the primary goal of its Phase III study, an endorsement that could pave a path forward for the treatment.

By a 9-0 vote, members of the Peripheral and Central Nervous System Drugs Advisory Committee said there was sufficient evidence that tofersen’s effect on a certain protein associated with ALS is reasonably likely to predict a benefit for patients. But panelists stopped short of advocating for a full approval, voting 3-5 against (with one abstention) and largely citing the failed pivotal study.

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Eu­ro­pean doc­tors di­al up dig­i­tal com­mu­ni­ca­tion with phar­mas, but still lean to­ward in-per­son med meet­ings, study finds

As in-person sales rep access declines in the big five European countries, a corresponding uptick in virtual rep access is happening. It’s not surprising, but it does run counter to pharma companies’ assessment – along with long-held sales rep sway in Europe – that in-person access hadn’t changed.

CMI Media Group and Medscape’s recent study reports that 75% of physicians in the EU5 countries of Spain, Germany, Italy, France and the UK already limit engagements with pharma sales reps, and 25% of those surveyed plan to decrease time with reps.

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Judge al­lows ex­pert tes­ti­mo­ny in GSK tri­al al­leg­ing Zan­tac link to can­cer

A California judge will allow a plaintiff in a state court case to introduce expert testimony connecting a potential carcinogen in former blockbuster medicine Zantac to cancer.

The order was handed down on Thursday from state judge Evelio Grillo, who is now allowing both parties to introduce expert testimony in an upcoming trial after what’s known as a Sargon hearing, where a judge determines the admissibility of expert witnesses and expert opinions.

The Melon family, as seen in Concussion Awareness Now's latest campaign

Ab­bott in­tro­duces the Mel­on fam­i­ly to raise con­cus­sion aware­ness

Abbott is renewing its concussion awareness campaign, weeks after the company received FDA clearance for its lab-based traumatic brain injury (TBI) blood test.

The unbranded campaign features three generations of the Melon family — animated talking melons who slip on toys or take a spill while playing pickleball.

“Don’t mess with your melon. If you hit it, get it checked,” a narrator says.

Sen. Maria Cantwell (D-WA) (Drew Angerer/Pool via AP)

Sen­ate com­mit­tee ad­vances PBM bill as bi­par­ti­san re­forms gain trac­tion

Pharmacy benefit managers are beginning to see enemies on both sides of the aisle: On Wednesday, a US Senate committee advanced to the full chamber a bill to increase PBM transparency and crack down on what lawmakers and critics say are deceptive practices.

The Senate Committee on Commerce, Science and Transportation advanced the bill by a bipartisan 18-9 vote, after hearing testimony last February documenting how PBMs control several key areas of the drug distribution and payment system. The Pharmacy Benefit Manager Transparency Act, introduced by committee chair Maria Cantwell (D-WA) and Budget Committee ranking member Chuck Grassley (R-IA), would make it unlawful for PBMs to engage in:

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