Trump ad­min­is­tra­tion opens the door to low­er drug prices as Medicare Ad­van­tage plans are pushed to step ther­a­py ap­proach

The Trump ad­min­is­tra­tion has tak­en an­oth­er step to­wards low­er­ing drug costs for con­sumers, this time aim­ing at the mil­lions of mem­bers in Medicare Ad­van­tage plans.

Un­der new rules an­nounced late Tues­day, the ad­min­is­tra­tion is giv­ing these plans the right to set up what’s called step ther­a­py plans for physi­cian-ad­min­is­tered and oth­er Part B drugs. These plans, com­mon­ly used among pri­vate in­sur­ers, man­date that mem­bers use the least ex­pen­sive drugs avail­able for their con­di­tions be­fore mov­ing on to prici­er ther­a­pies if need­ed.

The move came just hours be­fore Pres­i­dent Don­ald Trump told a gath­er­ing of busi­ness ex­ec­u­tives Tues­day night that he was prep­ping an an­nounce­ment next week that would bring down drug prices “re­al­ly sub­stan­tial­ly.” That gath­er­ing re­port­ed­ly in­clud­ed J&J CEO Alex Gorsky, who jumped off of one of the pres­i­dent’s busi­ness ad­vi­so­ry groups af­ter a con­tro­ver­sy brewed up over Trump’s com­ments re­gard­ing a white su­prema­cist ral­ly in Vir­ginia.

As an ex­am­ple of the new Medicare ap­proach, the gov­ern­ment says that step ther­a­py plans — which should roll out Jan­u­ary 1 — can start re­quir­ing mem­bers to use less-ex­pen­sive biosim­i­lars. And half of the sav­ings are in­tend­ed to be passed on to mem­bers.

“For the first time ever, we’re go­ing to un­leash these plans, which are so good at ne­go­ti­at­ing, to try to get dis­counts on Part B drugs,” said HHS Sec­re­tary Alex Azar in an in­ter­view with Bloomberg. “This is a very im­por­tant change in terms of drug pric­ing as well as just in man­ag­ing and mod­ern­iz­ing how Medicare func­tions.”

But ad­vo­cat­ing step ther­a­py ap­proach­es with gener­ic or low-cost pref­er­ences is not nec­es­sar­i­ly the same thing as lever­ag­ing low­er prices.

Azar and Trump have wres­tled com­mit­ments from a long line­up of ma­jor bio­phar­ma com­pa­nies to hold back on any fur­ther price in­creas­es un­til at least the end of this year. That ef­fort was mocked, though, af­ter many of these com­pa­nies had al­ready pushed through price in­creas­es that were al­ready planned for 2018. And De­moc­rats have been push­ing the ad­min­is­tra­tion to sup­port more ag­gres­sive ap­proach­es to al­low­ing Medicare to cre­ate for­mu­la­ries to ne­go­ti­ate for low­er costs.

Ac­cord­ing to the state­ment, this new ap­proach at Medicare is avail­able on­ly for new­ly pre­scribed drugs.

“Un­der the Pres­i­dent’s lead­er­ship, for the first time ever, CMS is bring­ing ne­go­ti­a­tions to physi­cian-ad­min­is­tered drugs and de­liv­er­ing on our promise to low­er drug prices for pa­tients,” said CMS Ad­min­is­tra­tor Seema Ver­ma in a pre­pared state­ment. “For too long, Medicare Ad­van­tage plans have not had the tools to ne­go­ti­ate a bet­ter deal for pa­tients. To­day we be­gin lift­ing those bar­ri­ers so plans can use pri­vate-sec­tor tools to dri­ve down the cost of ex­pen­sive drugs while al­so of­fer­ing new care co­or­di­na­tion and drug ad­her­ence pro­grams, to en­sure that pa­tients are get­ting high qual­i­ty care at low­er cost.”

It’s not sit­ting well with the top play­ers, though. The in­dus­try trade group PhRMA swift­ly pushed back against the ad­min­is­tra­tion’s move.

“PhRMA has se­ri­ous con­cerns with the new CMS guid­ance re­gard­ing Medicare Ad­van­tage cov­er­age of Part B med­i­cines and the im­pli­ca­tions for pa­tients suf­fer­ing from com­plex con­di­tions. Step ther­a­py will de­lay many pa­tients’ ac­cess to med­i­cines they need, in­ter­fere with the pa­tient-physi­cian re­la­tion­ship and in­crease bur­dens on physi­cians to com­ply with new, more com­pli­cat­ed re­quire­ments. The bot­tom line is this guid­ance pri­or­i­tizes the in­ter­ests of mid­dle­men while in­creas­ing out-of-pock­et costs for some pa­tients.”

Fangliang Zhang, AP Images

Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

Mer­ck wins a third FDA nod for an­tibi­ot­ic; Mereo tack­les TIG­IT with $70M raise in hand

Merck — one of the last big pharma bastions in the beleaguered field of antibiotic drug development — on Friday said the FDA had signed off on using its combination drug, Recarbrio, with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia. The drug could come handy for use in hospitalized patients who are afflicted with Covid-19, who carry a higher risk of contracting secondary bacterial infections. Once SARS-CoV-2, the virus behind Covid-19, infects the airways, it engages the immune system, giving other pathogens free rein to pillage and plunder as they please — the issue is particularly pertinent in patients on ventilators, which in any case are breeding grounds for infectious bacteria.

President Donald Trump (left) and Moncef Slaoui, head of Operation Warp Speed (Alex Brandon, AP Images)

UP­DAT­ED: White House names fi­nal­ists for Op­er­a­tion Warp Speed — with 5 ex­pect­ed names and one no­table omis­sion

A month after word first broke of the Trump Administration’s plan to rapidly accelerate the development and production of a Covid-19 vaccine, the White House has selected the five vaccine candidates they consider most likely to succeed, The New York Times reported.

Most of the names in the plan, known as Operation Warp Speed, will come as little surprise to those who have watched the last four months of vaccine developments: Moderna, which was the first vaccine to reach humans and is now the furthest along of any US effort; J&J, which has not gone into trials but received around $500 million in funding from BARDA earlier this year; the joint AstraZeneca-Oxford venture which was granted $1.2 billion from BARDA two weeks ago; Pfizer, which has been working with the mRNA biotech BioNTech; and Merck, which just entered the race and expects to put their two vaccine candidates into humans later this year.

RA Cap­i­tal, Hill­house join $310M rush to back Ever­est's climb to com­mer­cial heights in Chi­na

Money has never been an issue for Everest Medicines. With an essentially open tab from their founders at C-Bridge Capital, the biotech has gone two and a half years racking up drug after drug, bringing in top exec after top exec, and issuing clinical update after update.

But now other investors want in — and they’re betting big.

Everest is closing its Series C at $310 million. The first $50 million comes from the Jiashan National Economic and Technological Development Zone; the remaining C-2 tranche was led by Janchor Partners, with RA Capital Management and Hillhouse Capital as co-leaders. Decheng Capital, GT Fund, Janus Henderson Investors, Rock Springs Capital, Octagon Investments all joined.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

GSK presents case to ex­pand use of its lu­pus drug in pa­tients with kid­ney dis­ease, but the field is evolv­ing. How long will the mo­nop­oly last?

In 2011, GlaxoSmithKline’s Benlysta became the first biologic to win approval for lupus patients. Nine years on, the British drugmaker has unveiled detailed positive results from a study testing the drug in lupus patients with associated kidney disease — a post-marketing requirement from the initial FDA approval.

Lupus is a drug developer’s nightmare. In the last six decades, there has been just one FDA approval (Benlysta), with the field resembling a graveyard in recent years with a string of failures including UCB and Biogen’s late-stage flop, as well as defeats in Xencor and Sanofi’s programs. One of the main reasons the success has eluded researchers is because lupus, akin to cancer, is not just one disease — it really is a disease of many diseases, noted Al Roy, executive director of Lupus Clinical Investigators Network, an initiative of New York-based Lupus Research Alliance that claims it is the world’s leading private funder of lupus research, in an interview.

Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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