Mixed court de­ci­sions for No­var­tis in DC and Sanofi, No­vo Nordisk in NJ fur­ther com­pli­cate whose in­ter­pre­ta­tion of 340B is cor­rect

Wash­ing­ton DC’s dis­trict court hand­ed No­var­tis a clear win late Fri­day, ar­gu­ing that the Big Phar­ma can place con­di­tions on the sales of drugs dis­count­ed by a fed­er­al pro­gram to con­tract phar­ma­cies. But this in­ter­pre­ta­tion was con­tra­dict­ed by an­oth­er de­ci­sion hand­ed down Fri­day in a New Jer­sey dis­trict court, in which No­vo Nordisk and Sanofi were told that they can­not uni­lat­er­al­ly im­pose re­stric­tions on the 340B pro­gram and that their new poli­cies “must cease.”

The con­flict­ing opin­ions are just the lat­est in a le­gal bat­tle sweep­ing the coun­try be­tween the Biden ad­min­is­tra­tion’s HRSA, cre­at­ing a piece­meal of in­ter­pre­ta­tions of the pro­gram and how to en­force it. HRSA has strug­gled to reg­u­late the drug dis­count pro­gram for the need­i­est Amer­i­cans, both in terms of deal­ing with the phar­ma com­pa­nies, who are chal­leng­ing what they see as a bal­loon­ing pro­gram (to al­most 10% of the en­tire US phar­ma mar­ket), and the pro­lif­er­a­tion of con­tract phar­ma­cies re­ceiv­ing these steep dis­counts.

DC Judge Dab­ney Friedrich made clear in her opin­ion that drug­mak­ers are right to chal­lenge re­cent­ly levied fines from HRSA due to the com­pa­nies’ new­ly en­act­ed re­stric­tions around these con­tract phar­ma­cies, writ­ing, “The statute’s plain lan­guage, pur­pose, and struc­ture do not pro­hib­it drug man­u­fac­tur­ers from at­tach­ing any con­di­tions to the sales of cov­ered drugs through con­tract phar­ma­cies.”

A No­var­tis spokesper­son told End­points News via email, “We be­lieve the rul­ing val­i­dates our view of the 340B statute and that our con­tract phar­ma­cy pol­i­cy is ful­ly con­sis­tent with the statu­to­ry re­quire­ments gov­ern­ing the pro­gram. The rul­ing is a win for the orig­i­nal in­tent of the 340B pro­gram to sup­port vul­ner­a­ble pa­tients. The over­whelm­ing ma­jor­i­ty of 340B dis­counts from med­i­cines dis­pensed at con­tract phar­ma­cies are not shared with pa­tients; in­stead, a sub­stan­tial por­tion ben­e­fits pub­licly trad­ed, for-prof­it chain phar­ma­cies (of­ten in­te­grat­ed with large phar­ma­cy ben­e­fit man­agers).”

No­var­tis’ win al­so fol­lows a re­cent win for Eli Lil­ly in In­di­ana dis­trict court re­gard­ing its in­ter­pre­ta­tion of the 340B pro­gram, in which the judge took is­sue with the way HRSA has sought to reg­u­late this space, writ­ing that HRSA “fails to ac­knowl­edge or ex­plain the agency’s changed po­si­tion(s) with re­gard to its au­thor­i­ty to en­force statu­to­ry com­pli­ance when the al­leged vi­o­la­tion is en­tan­gled with a reg­u­lat­ed en­ti­ty’s fail­ure to com­ply with the agency’s non­bind­ing con­tract phar­ma­cy guid­ance.”

But that opin­ion al­so said Lil­ly is not per­mit­ted to make “uni­lat­er­al ex­tra statu­to­ry re­stric­tions on its of­fer to sell 340B drugs,” while not­ing ex­am­ples of some 340B-cov­ered en­ti­ties that lost ac­cess to hun­dreds of thou­sands in dis­counts.

New Jer­sey’s dis­trict court judge Fre­da Wolf­son al­so not­ed ex­am­ples of lost dis­counts in her opin­ion, ex­plain­ing how Mass­a­chu­setts-based Bev­er­ly Hos­pi­tal says it lost more than $125,000 in 340B sav­ings since Sanofi’s 340B changes took ef­fect.

Rochester, NY-based Strong Memo­r­i­al Hos­pi­tal al­so said that No­vo Nordisk and oth­er drug­mak­ers “re­fused to of­fer drugs at the 340B ceil­ing price, re­sult­ing in over­charges of more than $2 mil­lion. The hos­pi­tal doc­u­ment­ed spe­cif­ic trans­ac­tions in which No­vo is­sued a de­nial, in­stead charg­ing prices up to $1,291 per unit, which to­tal sev­er­al hun­dred thou­sand dol­lars in lost 340B sav­ings.”

The opin­ion al­so not­ed that a health care provider “in a high-pover­ty area says that it ex­pects to lose $6 mil­lion of its $8 mil­lion bud­get to 340B re­stric­tions and may lay off 35 staff.” Over­all, the opin­ion points to records com­piled by HHS show­ing the ex­tent to which No­vo and Sanofi’s changes to their re­spec­tive 340B pro­grams rapid­ly drove down sav­ings:

Month­ly 340B sav­ings in turn fell from $357 mil­lion in Ju­ly 2020 to$92 mil­lion in Jan­u­ary 2021, rep­re­sent­ing an­nu­al­ized loss­es of $3.2 bil­lion. In Jan­u­ary 2021, alone, cov­ered en­ti­ties lost an es­ti­mat­ed $234 mil­lion in sav­ings, and an es­ti­mat­ed $665 mil­lion in the four months pri­or.

Wolf­son fur­ther at­tacked the Lil­ly win in In­di­ana court, say­ing she’s “un­per­suad­ed by the court’s char­ac­ter­i­za­tion of HHS’ ac­tions. The court calls HHS ‘du­plic­i­tous and mis­lead­ing,’ where­as in my view, the agency may have been caught be­tween tran­si­tion­ing ad­min­is­tra­tions with dis­sim­i­lar pri­or­i­ties.”

How the phar­ma com­pa­nies and HRSA in­ter­pret these con­flict­ing court opin­ions and move for­ward with the 340B pro­gram re­mains un­known.

ZS Per­spec­tive: 3 Pre­dic­tions on the Fu­ture of Cell & Gene Ther­a­pies

The field of cell and gene therapies (C&GTs) has seen a renaissance, with first generation commercial therapies such as Kymriah, Yescarta, and Luxturna laying the groundwork for an incoming wave of potentially transformative C&GTs that aim to address diverse disease areas. With this renaissance comes several potential opportunities, of which we discuss three predictions below.

Allogenic Natural Killer (NK) Cells have the potential to displace current Cell Therapies in oncology if proven durable.

Despite being early in development, Allogenic NKs are proving to be an attractive new treatment paradigm in oncology. The question of durability of response with allogenic therapies is still an unknown. Fate Therapeutics’ recent phase 1 data for FT516 showed relatively quicker relapses vs already approved autologous CAR-Ts. However, other manufacturers, like Allogene for their allogenic CAR-T therapy ALLO-501A, are exploring novel lymphodepletion approaches to improve persistence of allogenic cells. Nevertheless, allogenic NKs demonstrate a strong value proposition relative to their T cell counterparts due to comparable response rates (so far) combined with the added advantage of a significantly safer AE profile. Specifically, little to no risk of graft versus host disease (GvHD), cytotoxic release syndrome (CRS), and neurotoxicity (NT) have been seen so far with allogenic NK cells (Fig. 1). In addition, being able to harness an allogenic cell source gives way to operational advantages as “off-the-shelf” products provide improved turnaround time (TAT), scalability, and potentially reduced cost. NKs are currently in development for a variety of overlapping hematological indications with chimeric antigen receptor T cells (CAR-Ts) today, and the question remains to what extent they will disrupt the current cell therapy landscape. Click for more details.

Graphic: Kathy Wong for Endpoints News

What kind of biotech start­up wins a $3B syn­di­cate, woos a gallery of mar­quee sci­en­tists and re­cruits GSK's Hal Bar­ron as CEO in a stun­ner? Let Rick Klaus­ner ex­plain

It started with a question about a lifetime’s dream on a walk with tech investor Yuri Milner.

At the beginning of the great pandemic, former NCI chief and inveterate biotech entrepreneur Rick Klausner and the Facebook billionaire would traipse Los Altos Hills in Silicon Valley Saturday mornings and talk about ideas.

Milner’s question on one of those mornings on foot: “What do you want to do?”

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Sec­ondary patents prove to be key in biosim­i­lar block­ing strate­gies, re­searchers find

While the US biosimilars industry has generally been a disappointment since its inception, with FDA approving 33 biosimilars since 2015, just a fraction of those have immediately followed their approvals with launches. And more than a handful of biosimilars for two of the biggest blockbusters of all time — AbbVie’s Humira and Amgen’s Enbrel — remain approved by FDA but still have not launched because of legal settlements.

FDA+ roundup: FDA's neu­ro­science deputy de­parts amid on­go­ing Aduhelm in­ves­ti­ga­tions; Califf on the ropes?

Amid increased scrutiny into the close ties between FDA and Biogen prior to the controversial accelerated approval of Aduhelm, the deputy director of the FDA’s office of neuroscience has called it quits after more than two decades at the agency.

Eric Bastings will now take over as VP of development strategy at Ionis Pharmaceuticals, the company said Wednesday, where he will provide senior clinical and regulatory leadership in support of Ionis’ pipeline.

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CBO: Medicare ne­go­ti­a­tions will ham­per drug de­vel­op­ment more than pre­vi­ous­ly thought

As President Biden’s Build Back Better Act — and, with it, potentially the Democrats’ last shot at major drug pricing reforms in the foreseeable future — remains on life support, the Congressional Budget Office isn’t helping their case.

The CBO last week released a new slide deck, outlining an update to its model on how Medicare negotiations might take a bite out of new drugs making it to market. The new model estimates a 10% long-term reduction in the number of new drugs, whereas a previous CBO report from August estimated that 8% fewer new drugs will enter the market over 30 years.

Joshua Brumm, Dyne Therapeutics CEO

FDA or­ders DMD tri­al halt, rais­ing ques­tions about a whole class of promis­ing drugs

Dyne Therapeutics’ stock took a nasty hit this morning after the biotech put out word that the FDA had slapped a clinical hold on their top program for Duchenne muscular dystrophy. And now speculation is bouncing around Biotwitter that there could be a class effect at work here that would implicate other drug developers in the freeze.

Dyne execs didn’t have a whole lot to say about why the FDA sidelined their IND for DYNE-251 in DMD while “requesting additional clinical and non-clinical information for” the drug.

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Hal Barron (GSK via YouTube)

GSK R&D chief Hal Bar­ron jumps ship to run a $3B biotech start­up, Tony Wood tapped to re­place him

In a stunning switch, GlaxoSmithKline put out word early Wednesday that R&D chief Hal Barron is exiting the company after 4 years — a relatively brief run for the man chosen by CEO Emma Walmsley in late 2017 to turn around the slow-footed pharma giant.

Barron is being replaced by Tony Wood, a close associate of Barron’s who’s taking one of the top jobs in Big Pharma R&D. He’ll be closer to home, though, for GSK. Barron has been running a UK and Philadelphia-based research organization from his perch in San Francisco.

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Michel Vounatsos, Biogen CEO (Credit: World Economic Forum/Ciaran McCrickard)

An un­ortho­dox pro­pos­al for Bio­gen's Medicare-man­dat­ed Aduhelm tri­al

Biogen has gone full blitz since Medicare announced it would only cover its new Alzheimer’s drug when used in clinical trials, accusing the agency of discriminating against Alzheimer’s patients and trying to get physicians to change regulators’ minds.  Critics, meanwhile, cheered what they see as a necessary wall protecting payers and patients from an unproven and unsafe drug.

Far less attention, though, has gone to what a Medicare-funded clinical trial would actually look like. Biogen has operated as if it would be a standard late-stage Alzheimer’s trial, enrolling a couple thousand patients and giving half placebo.

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Chamath Palihapitiya and Pablo Legorreta

Bil­lion­aires Chamath Pal­i­hapi­tiya and Pablo Legor­re­ta hatch an $825M SPAC for cell ther­a­py biotech

Three years after Royalty Pharma chief Pablo Legorreta led a group of investors to buy up a pair of biotechs and create a new startup called ProKidney, the biotech is jumping straight into an $825 million public shell created by SPAC king and tech billionaire Chamath Palihapitiya.

ProKidney was founded 6 years ago but really got going at the beginning of 2019 with the $62 million acquisition of inRegen, which was working on an autologous — from the patient — cell therapy for kidney disease. After extracting kidney cells from patients, researchers expand the cells in the lab and then inject them back into patients, aiming to restore the kidneys of patients suffering from CKD.

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