Christine Wilson and Noah Phillips

Open sea­son on PBMs but FTC votes against dig­ging in­to their an­ti-com­pet­i­tive prac­tices fur­ther

The abus­es of phar­ma­cy ben­e­fit man­agers were on full dis­play Thurs­day but the Fed­er­al Trade Com­mis­sion failed in ad­vanc­ing a mo­tion (2-2) to study these phar­ma mid­dle­men in more depth, which could lead to wider in­ves­ti­ga­tions.

FTC com­mis­sion­ers Noah Phillips and Chris­tine Wil­son vot­ed against con­duct­ing an FTC study on PBMs, claim­ing that it was not de­signed to study the com­pet­i­tive ef­fects of the PBMs, and it’s not clear this study would re­veal any­thing about pa­tients’ out-of-pock­et costs, ac­cord­ing to Phillips.

Wil­son added that she does think it’s use­ful to look in­to man­u­fac­tur­er re­bates, and she’s con­fi­dent there can be a da­ta-dri­ven ap­proach. But she not­ed that many of com­plaints against PBMs “are base­less,” ac­cord­ing to the PBMs, and that the mid­dle­men have not im­pact­ed in­de­pen­dent phar­ma­cy mar­gins, and have not led to a de­crease in in­de­pen­dent phar­ma­cies.

Lina Khan

Mem­bers of Con­gress have in­tro­duced leg­is­la­tion to ex­am­ine the PBM in­dus­try, and “to be clear, I sup­port an FTC analy­sis of this in­dus­try,” Wil­son said. “If there’s an­ti-com­pet­i­tive con­duct, I want to know about it.” But she said it’s not the FTC’s role to pick win­ners and losers, and there needs to be an ob­jec­tive de­sign to the study to pro­duce a da­ta-dri­ven re­port.

Lament­ing the failed vote, FTC chair Lina Khan, who vot­ed in fa­vor of it, added, “We have a re­al moral im­per­a­tive to act, this in­quiry is long over­due.”

FTC com­mis­sion­er Re­bec­ca Slaugh­ter, who al­so vot­ed for the study, stressed that “there isn’t one per­fect PBM study, and let’s not make the per­fect the en­e­my of the very, very im­por­tant.”

“Two mem­bers of the FTC just let the worst ac­tors in the mar­ket off the hook. Af­ter hear­ing hours of tes­ti­mo­ny by com­mu­ni­ty phar­ma­cists and pa­tients, all of whom paint­ed the same shock­ing pic­ture about PBM abuse, and not a sin­gle wit­ness there to de­fend the PBM in­dus­try, it is in­ex­plic­a­ble that two mem­bers of the com­mis­sion could vote against the study. Their de­ci­sions could not pos­si­bly have been based on what was heard to­day,” B. Dou­glas Hoey, CEO of the Na­tion­al Com­mu­ni­ty Phar­ma­cists As­so­ci­a­tion, said in a state­ment.

A pair of House Re­pub­li­cans, Rep. Bud­dy Carter (GA), a phar­ma­cist, and Rep. John Rose (TN) kicked off the open pub­lic hear­ing pri­or to the vote, call­ing on the FTC to use its pow­ers to ob­tain new da­ta from PBMs, and shine a light on their abu­sive prac­tices.

Re­bec­ca Slaugh­ter

While rail­ing against the mid­dle­men for their “take-it-or-leave-it” ap­proach­es, the con­gress­men al­so called out the PBMs’ non-trans­par­ent fee in­creas­es that have dri­ven away com­mu­ni­ty phar­ma­cies.

Khan not­ed that she’s seen two ma­jor trends — pa­tients are pay­ing more for drugs, in­clud­ing the ones nec­es­sary for sur­vival, and in some cas­es are forced to ra­tion their med­i­cines. The oth­er trend is that small, lo­cal and fam­i­ly-owned phar­ma­cies have been van­ish­ing at a high rate, and these places can be in­sti­tu­tion­al for help­ing their com­mu­ni­ties and proved to be more nim­ble in vac­ci­nat­ing peo­ple in some cas­es dur­ing the pan­dem­ic, as with West Vir­ginia.

The FTC has re­ceived com­plaints that peo­ple are dri­ven to more ex­pen­sive drugs by PBMs too, es­pe­cial­ly with the rise of bi­o­log­ics, Khan not­ed.

The three largest PBMs — CVS Care­mark, Ex­press Scripts and Op­tum­Rx — dom­i­nate their com­pe­ti­tion, con­trol­ling al­most 80% of the PBM mar­ket, and en­gage in nu­mer­ous games to tilt the field to their ad­van­tage, such as by claw­ing back mon­ey af­ter drugs are dis­pensed, in­cen­tiviz­ing pa­tients to switch to their own spe­cial­ty phar­ma­cies, or to ma­nip­u­late prices to make more prof­its, those tes­ti­fy­ing claimed.

Lee Hertz

The Na­tion­al Com­mu­ni­ty Phar­ma­cists As­so­ci­a­tion raised con­cerns at Thurs­day’s hear­ing around how PBMs are both “ver­ti­cal­ly in­te­grat­ed up­stream with Aet­na, Cigna, Unit­ed­Health and the Blues and down­stream with phar­ma­cies,” which al­lows them to ex­ploit “their da­ta plat­forms to en­gage in myr­i­ad un­fair meth­ods of com­pe­ti­tion against phar­ma­cy com­peti­tors which re­sult in in­creased costs to pa­tients,” said NC­PA Gen­er­al Coun­sel Matt Seil­er.

Lee Hertz, di­rec­tor of an­a­lyt­ics at Quest An­a­lyt­ics Group, who works close­ly with PBMs and phar­ma­cies ex­plained to End­points News how PBMs are al­so us­ing “lim­it­ed dis­tri­b­u­tion” drugs that are a sub­set of these spe­cial­ty drugs, adding:

The idea be­hind them is that a pro­duc­er has not yet re­leased the item to broad dis­tri­b­u­tion and has ‘Se­lect­ed’ spe­cif­ic PBM spe­cial­ty phar­ma­cies to car­ry them. Then non-se­lect­ed PBMs have to pur­chase from those se­lect­ed. The price of the item may be high­er or low­er than oth­er spe­cial­ty items in nor­mal dis­tri­b­u­tion. Be­cause they are gen­er­al­ly new­er items, you could say they are ‘more ex­pen­sive.’ In most guar­an­teed price deals, LDD items are ex­empt from price dis­count and re­bate guar­an­tees. This clas­si­fi­ca­tion is of­ten ma­nip­u­lat­ed to af­fect the ag­gre­gate guar­an­tees of the agree­ment. Re­bates are the big is­sue. SRx [spe­cial­ty pre­scrip­tion] re­bates are get­ting close to [$]2,000 per brand script.

A rur­al New Mex­i­co phar­ma­cist al­so told the FTC that PBMs ma­nip­u­late pa­tient co-pays to make phar­ma­cies look like “bad guys” in ad­di­tion to of­fer­ing re­im­burse­ments that are so low it’s “out of con­trol.” Oth­ers tes­ti­fy­ing not­ed that they’re of­ten re­im­bursed less than what they paid for the med­ica­tion.

“PBMs at their worst take a sledge­ham­mer to pa­tients and drug prices,” an­oth­er phar­ma­cist said.

But the PBMs have got­ten so large that it re­mains un­known how like­ly it is, or how quick­ly they can be reigned in.

In the mean­time, phar­ma­cists’ hor­ror sto­ries with PBMs flood­ed the hear­ing.

A Sacra­men­to-based phar­ma­cist told the FTC that con­tracts with PBMs are not ne­go­tiable. Phar­ma­cies do not get any say in rates or fees, and for the pre­scrip­tions they do dis­pense, the claw­backs from PBMs are un­pre­dictable.

None of the com­ments in the open hear­ing came from PBMs or those ad­vo­cat­ing on be­half of the PBMs.

The Phar­ma­ceu­ti­cal Care Man­age­ment As­so­ci­a­tion, which rep­re­sents PBMs, did not re­lease a PR on the FTC vote but an­nounced a new ad cam­paign that “calls at­ten­tion to the work phar­ma­cy ben­e­fit man­agers, PBMs, do to pro­duce a seam­less ex­pe­ri­ence at the phar­ma­cy counter for pa­tients, while al­so work­ing to im­prove over­all health out­comes.”

M&A: a crit­i­cal dri­ver for sus­tain­able top-line growth in health­care

2021 saw a record $600B in healthcare M&A activity. In 2022, there is an anticipated slowdown in activity, however, M&A prospects remain strong in the medium to long-term. What are future growth drivers for the healthcare sector? Where might we see innovations that drive M&A? RBC’s Andrew Callaway, Global Head, Healthcare Investment Banking discusses with Vito Sperduto, Global Co-Head, M&A.

15 LGBTQ lead­ers in bio­phar­ma; Paul Stof­fels’ Gala­pa­gos re­vamp; As­traZeneca catch­es up in AT­TR; 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.

A return to in-person conferences also marks a return to on-the-ground reporting. My colleagues Beth Synder Bulik and Nicole DeFeudis were on-site at Cannes Lions, bringing live coverage of pharma’s presence at the ad festival — accompanied by photos from Clara Bui, our virtual producer, that bring you right to the scene. You can find a recap (and links to all the stories) below.

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David Loew (Ipsen)

Ipsen snags an ap­proved can­cer drug in $247M M&A deal as an­oth­er bat­tered biotech sells cheap

You can add Paris-based Ipsen to the list of discount buyers patrolling the penny stock pack for a cheap M&A deal.

The French biotech, which has had plenty of its own problems to grapple with, has swooped in to buy Epizyme $EPZM for $247 million in cash and a CVR with milestones attached to it. Epizyme shareholders, who had to suffer through a painfully soft launch of their EZH2a inhibitor cancer drug Tazverik, will get $1.45 per share along with a $1 CVR tied to achieving $250 million in sales from the drug over four consecutive quarters as well as an OK for second-line follicular lymphoma by 1 Jan. 2028.

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AstraZeneca's new Evusheld direct to consumer campaign aims to reach more immunocompromised patients.

As­traZeneca de­buts first con­sumer cam­paign for its Covid-19 pro­phy­lac­tic Evusheld — and a first for EUA drugs

AstraZeneca’s first consumer ad for Evusheld is also a first for drugs that have been granted emergency use authorizations during the pandemic.

The first DTC ad for a medicine under emergency approval, the Evusheld campaign launching this week aims to raise awareness among immunocompromised patients — and spur more use.

Evusheld nabbed emergency authorization in December, however, despite millions of immunocompromised people looking for a solution and now more widespread availability of the drug.

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GSK says its drug for chron­ic hep B could ‘lead to a func­tion­al cure’ — but will it be alone or in com­bi­na­tion?

GSK, newly branded and soon-to-be demerged, shared interim results from its Phase II trial on its chronic hepatitis B treatment, one that it says has the “potential to lead to a functional cure.”

At a presentation at the EASL International Liver Congress, GSK shared that in around 450 patients who received its hep B drug bepirovirsen for 24 weeks, just under 30% had hepatitis B surface antigen and viral DNA levels that were too low to detect.

Sanofi, GSK tout 72% Omi­cron ef­fi­ca­cy in PhI­II tri­al of next-gen, bi­va­lent shot — with an eye to year-end roll­out

Sometimes, being late can give you an advantage.

That’s what Sanofi and GSK are trying to say as the Big Pharma partners report positive results from a late-stage trial of their next-gen bivalent Covid-19 vaccine, which was designed to protect against both the original strain of the SARS-CoV-2 virus and the Beta variant. Specifically, against Omicron, they note, the vaccine delivered 72% efficacy in all adults and 93.2% in those previously infected.

Matt Kapusta, uniQure CEO

In trou­bled Hunt­ing­ton’s space, uniQure’s gene ther­a­py shows ear­ly promise

In randomized clinical trial data from a small number of patients, Dutch biotech uniQure shared that its gene therapy for Huntington’s disease seems to reduce the amount of the mutant protein responsible for the disease over the course of a year.

In seven patients with early-stage Huntington’s — four who got the treatment and three who got a placebo — mutant huntingtin protein levels in the cerebrospinal fluid decreased by an average of just over 50% in patients who got the gene therapy compared to around a 17% drop in patients who got the placebo after a year.

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De­spite a slow start to the year for deals, PwC pre­dicts a flur­ry of ac­tiv­i­ty com­ing up

Despite whispers of a busy year for M&A, deal activity in the pharma space is actually down 30% on a semi-annualized basis, according to PwC’s latest report on deal activity. But don’t rule out larger deals in the second half of the year, the consultants said.

PwC pharmaceutical and life sciences consulting solutions leader Glenn Hunzinger expects to see Big Pharma companies picking up earlier stage companies to try and fill pipeline gaps ahead of a slew of big patent cliffs. Though a bear market continues to maul the biotech sector, Hunzinger said recent deals indicate that pharma companies are still paying above current trading prices.

Abortion-rights protesters regroup and protest following Supreme Court's decision to overturn Roe v. Wade. (AP Photo/Gemunu Amarasinghe)

Fol­low­ing SCO­TUS de­ci­sion to over­turn abor­tion pro­tec­tions, AG Gar­land says states can't ban the abor­tion pill

Following the Supreme Court’s historic decision on Friday to overturn Americans’ constitutional right to an abortion after almost 50 years, Attorney General Merrick Garland sought to somewhat reassure women that states will not be able to ban the prescription drug sometimes used for abortions.

Following the decision, the New England Journal of Medicine also published an editorial strongly condemning the reversal, saying it “serves American families poorly, putting their health, safety, finances, and futures at risk.”