New re­search ar­gues drug pric­ing ne­go­ti­a­tions would stymie in­no­va­tion, as De­moc­rats fight for re­vised pro­pos­al

As De­moc­rats ham­mer out a re­vised ver­sion of their pro­pos­al to low­er drug prices, new re­search from the Uni­ver­si­ty of Chica­go sug­gests that Medicare ne­go­ti­a­tions could stymie the de­vel­op­ment of new can­cer drugs — but the size of that ef­fect is wide­ly de­bat­ed.

Can­cer treat­ments ac­count­ed for about 49% of the pipeline mak­ing its way through the FDA now, and 27% of new ap­provals be­tween 2010 and 2019, ac­cord­ing to the UC analy­sis.

“No oth­er drug class­es have more drugs than on­col­o­gy at any phase and, ex­cept for Phase III, can­cer drugs rep­re­sent around half of the to­tal drugs,” the re­port states. 

Re­searchers warned that al­low­ing the US gov­ern­ment to ne­go­ti­ate the price of drugs on be­half of Medicare ben­e­fi­cia­ries — a move that was part of the failed Build Back Bet­ter Act and is now part of a re­vised pro­pos­al, ac­cord­ing to the Wash­ing­ton Post — would lead to a re­duc­tion in R&D spend­ing and thus few­er new drug ap­provals.

They pegged a re­duc­tion of $663 bil­lion in R&D spend­ing through 2039, and 135 few­er new drug ap­provals. The pro­pos­al would low­er an­nu­al spend­ing on can­cer R&D by about $18 bil­lion per year, or just un­der 32%, the re­searchers re­port­ed.

Those fig­ures are far off from pre­vi­ous es­ti­mates made by the Con­gres­sion­al Bud­get Of­fice, which sug­gest­ed back in No­vem­ber that Medicare ne­go­ti­a­tions would on­ly re­sult in 10 few­er drugs (out of a cal­cu­lat­ed to­tal of 1,300 drug ap­provals) over 30 years.

“At a mo­ment of re­mark­able progress in the war on can­cer, and a re­newed fo­cus from the Biden ad­min­is­tra­tion on re­duc­ing the death rate from can­cer, Wash­ing­ton should avoid drug price con­trol pro­pos­als that will un­in­ten­tion­al­ly re­verse decades of progress to beat this dis­ease,” lead au­thor and Har­ris School of Pub­lic Pol­i­cy pro­fes­sor Tomas Philip­son said in a state­ment.

Pres­i­dent Joe Biden reignit­ed the Can­cer Moon­shot ini­tia­tive back in Feb­ru­ary, set­ting a goal to re­duce the can­cer death rate by at least 50% over the next 25 years. The CDC cut the first check just a cou­ple weeks ago, shelling out the first in­stall­ment of a five-year, $1.1 bil­lion grant to get things go­ing.

Though the Biden ad­min­is­tra­tion pro­posed a $1.9 bil­lion an­nu­al in­crease in pub­lic can­cer R&D through ad­di­tion­al funds to ARPA-H and NCI, the au­thors es­ti­mat­ed that the re­duc­tion of R&D spend­ing from price ne­go­ti­a­tions would out­weigh those ex­tra funds by 9.5 times.

“De­spite the great in­tent of the Can­cer Moon­shot and con­gres­sion­al ef­forts to im­prove pa­tient af­ford­abil­i­ty, al­low­ing Medicare to ne­go­ti­ate drug prices will un­do any in­vest­ments made to fight can­cer and will in­stead raise can­cer mor­tal­i­ty sub­stan­tial­ly,” Philip­son said.

In­dus­try group PhRMA sim­i­lar­ly blast­ed the De­moc­rats’ drug pric­ing pro­pos­al, ar­gu­ing months ago that the bill would “throw sand in the gears of med­ical progress.”

How­ev­er, USC-Brook­ings Scha­ef­fer Ini­tia­tive for Health Pol­i­cy re­searchers wrote ear­li­er this month that the re­la­tion­ship be­tween R&D spend­ing and the sup­ply of new drugs is ac­tu­al­ly quite mod­est.

As seen in the graph­ic be­low, an­nu­al R&D bud­gets for PhRMA mem­bers have been on the rise, grow­ing from $37.5 bil­lion in 2000 to $83.0 bil­lion in 2019. How­ev­er, dur­ing the same time, the 5-year av­er­age for new drug ap­provals went from 36.8 in 2000, then de­clined for near­ly a decade hit­ting a low in 2009 with 22 new drugs, be­fore the 5-year av­er­age steadi­ly in­creased to 44 new drugs in 2019.

Be­fore Sen. Joe Manchin (D-WV) squashed hopes of pass­ing the Build Back Bet­ter Act late last year, De­moc­rats had nev­er been so close to pass­ing ma­jor drug pric­ing re­forms.

“A Medicare ne­go­ti­a­tion is just that — a process, not a price con­trol — a mar­ket-based ap­proach to come to a price be­tween pur­chas­er, Medicare and pro­duc­er,” Sen­ate Fi­nance Chair Ron Wyden (D-OR) ar­gued ear­li­er this year.

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.

Lat­est on ul­tra-rare dis­ease ap­proval; Pos­i­tive, if mixed, signs for Bio­gen's ALS drug; Clay Sie­gall finds a new job; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

Over the last four years, we’ve honored 80 women whose extraordinary accomplishments have changed the game in biopharma R&D. You can now nominate someone to be highlighted in this year’s special report. Details are here.

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FDA spells out how can­cer drug de­vel­op­ers can use one tri­al for both ac­cel­er­at­ed and full ap­provals

The FDA’s Oncology Center of Excellence has been a bright spot within the agency in terms of speeding new treatments to patients. That flexibility was on full display this morning as FDA released new draft guidance spelling out exactly how oncology drug developers can fulfill both the accelerated and full approval’s requirements with just a single randomized controlled trial.

While Congress recently passed legislation that will allow FDA to require confirmatory trials to be recruiting and ongoing prior to granting an accelerated approval, the agency is now making clear that the initial trial used to win the AA, if designed appropriately, can also serve as the trial for converting the accelerated approval into a full approval.

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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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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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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Eu­ro­pean Com­mis­sion de­lays pro­pos­al for ma­jor changes to phar­ma leg­is­la­tion

The European Commission has once again delayed the release of its proposal for an overhaul of the continent’s pharmaceutical legislation.

The release, previously anticipated on March 29, will occur “slightly later” than expected due to the “very busy College agendas of the last few weeks,” a Commission spokesperson told Endpoints News via email.

While the agency hasn’t provided an updated timeline, the spokesperson said the agenda is “always indicative and adoption dates of Commission proposals may change any time, especially when these proposals concern reforms of complex legislations of major importance.”

Sijmen de Vries, Pharming CEO

FDA ap­proves Pharm­ing drug for ul­tra-rare im­mun­od­e­fi­cien­cy dis­ease

US regulators cleared an ultra-rare drug from Pharming Group, by way of Novartis, on Friday afternoon.

The Dutch biotech said the FDA greenlit leniolisib for an immunodeficiency disease known as activated phosphoinositide 3-kinase delta (PI3Kδ) syndrome, or APDS. People 12 years and older can receive the oral drug, to be marketed as Joenja, beginning early next month, Pharming said, five days ahead of the decision deadline set by the FDA as part of a priority review.