Opin­ion: The drug pric­ing deal is­n't re­al­ly a vic­to­ry for Dems, or a loss for PhRMA. But it could be a har­bin­ger of change

Al­though House and Sen­ate De­moc­rats have fi­nal­ly cracked their Mis­sion: Im­pos­si­ble to al­low the fed­er­al gov­ern­ment to ne­go­ti­ate some drug prices, the ne­go­ti­a­tions will in­clude so few drugs and have so many stip­u­la­tions at­tached that the end re­sult may be more of a drop in the ocean than the mon­soon that drug price ne­go­ti­a­tions could’ve been.

Con­gress is wait­ing for a CBO score be­fore of­fi­cial­ly vot­ing, but ear­ly es­ti­mates point to about $100 bil­lion in drug pric­ing sav­ings over ten years from the deal. That’s ba­si­cal­ly the equiv­a­lent of what the phar­ma in­dus­try spends on DTC mar­ket­ing over a decade. Or about five years of what phar­ma com­pa­nies spend on mar­ket­ing to health care pro­fes­sion­als.

The Medicare ne­go­ti­a­tions deal is al­so com­pli­cat­ed by ex­ten­sive lim­i­ta­tions — it’s on­ly for ex­pen­sive Medicare Part D and B drugs, 10 to start, the drugs must have no gener­ic/biosim­i­lar com­peti­tors, and the ne­go­ti­a­tions can on­ly start post-ex­clu­siv­i­ty, or 9 years af­ter the launch of small mol­e­cule drugs and 13 years for bi­o­log­ics. It’s un­clear what kind of dent, if any, the deal will make on drug prices over the longer term, or for those out­side of Medicare.

“CMS will de­ter­mine the fi­nal price, based on cri­te­ria that are rather pro-in­dus­try – thus it seems more of a no­tice-and-com­ment rather than ac­tu­al ne­go­ti­a­tion,” Bern­stein biotech an­a­lyst Ron­ny Gal wrote in a re­cent in­vestor note. “Our ear­ly im­pres­sion is that the net im­pact is pos­i­tive for phar­ma stocks.”

Mean­while, in­dus­try group PhRMA, which suc­cess­ful­ly flood­ed Capi­tol Hill with 20 lob­by­ists for every sen­a­tor, is once again disin­gen­u­ous­ly cry­ing foul. This is typ­i­cal of PhRMA, which of­ten makes a big, pub­lic stink about al­ready-lim­it­ed bills while wa­ter­ing them down fur­ther be­hind closed doors.

And phar­ma com­pa­nies, fa­mous for hir­ing teams of lawyers to find loop­holes in com­plex statute, will sure­ly nav­i­gate their way around at least some of the ne­go­ti­a­tions, or po­ten­tial­ly forge deals to bring more in­nocu­ous com­pe­ti­tion to mar­ket more quick­ly so as to avoid any ne­go­ti­a­tions at all.

But these side ef­fects (pun in­tend­ed) of the ne­go­ti­a­tions deal might ac­tu­al­ly be a good thing. And al­though the num­bers might be a drop in the ocean, and the ne­go­ti­a­tions them­selves slant­ed in phar­ma’s fa­vor, the deal still dis­rupts the woe­ful­ly in­ad­e­quate sta­tus quo.

Rachel Sachs, a law pro­fes­sor at Wash­ing­ton Uni­ver­si­ty in St. Louis who stud­ies drug pric­ing and in­no­va­tion, said she didn’t think com­pa­nies po­ten­tial­ly bring­ing in more com­pe­ti­tion pri­or to the gov­ern­ment ne­go­ti­a­tions start­ing “would be a bad out­come, from a pol­i­cy per­spec­tive, par­tic­u­lar­ly if we end up with more than one com­peti­tor to dri­ve down prices. It might al­so cut down on the need for some pay-for-de­lay or cit­i­zen pe­ti­tion re­form.”

Pe­ter Bach

Oth­er drug pric­ing ex­perts like Pe­ter Bach have al­so come out in fa­vor of the deal’s abil­i­ty to ne­go­ti­ate prices post-ex­clu­siv­i­ty, rather than when the drugs launch, the lat­ter of which is typ­i­cal in Eu­ro­pean coun­tries.

“Fo­cus­ing on drugs that have logged years on the mar­ket means there will be more (and in many cas­es clear) ev­i­dence of how well drugs work. Rarely true at launch,” he wrote. “This is where the mon­ey is.”

And Bach in­sist­ed to me that is the right step and tar­get­ing the right prob­lem:

So much mon­ey is in the top ex­pen­di­ture drugs that fo­cus­ing there — and thus us­ing ne­go­ti­at­ing re­sources ef­fi­cient­ly — makes sense. I know the push and pull of pol­i­tics and n[um­ber] of drugs and stuff makes for good the­atre, but my ques­tion is where are we com­pared to where we were 5 years ago when no­body knew what a re­bate was or that the biosim­i­lar mar­ket was de­signed to fail or that long mo­nop­o­lies were not just a lit­tle long, they were gen­er­a­tions long.

Ul­ti­mate­ly, if De­moc­rats are able to shep­herd their ne­go­ti­a­tions deal across the fin­ish line (and they’re ex­pect­ed to), the net ef­fect won’t be in­stan­ta­neous sav­ings or the col­lapse of the bio­phar­ma in­dus­try, but per­haps an sign­post on the way to­ward a more sus­tain­able path.

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.

A $3B+ peak sales win? Pfiz­er thinks so, as FDA of­fers a tardy green light to its JAK1 drug abroc­i­tinib

Back in the fall of 2020, newly crowned Pfizer chief Albert Bourla confidently put their JAK1 inhibitor abrocitinib at the top of the list of blockbuster drugs in the late-stage pipeline with a $3 billion-plus peak sales estimate.

Since then it’s been subjected to serious criticism for the safety warnings associated with the class, held back by a cautious FDA and questioned when researchers rolled out a top-line boast that their heavyweight contender had beaten the champ in the field of atopic dermatitis — Dupixent — in a head-to-head study.

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Robert Califf, FDA commissioner nominee (Graeme Sloan/Sipa USA/Sipa via AP Images)

Rob Califf ad­vances as Biden's FDA nom­i­nee, with a close com­mit­tee vote

Rob Califf’s second confirmation process as FDA commissioner is already much more difficult than his near unanimous confirmation under the Obama administration.

The Senate Health Committee on Thursday voted 13-8 in favor of advancing Califf’s nomination to a full Senate vote. Several Democrats voted against Califf, including Sen. Bernie Sanders and Sen. Maggie Hassan. Several other Democrats who aren’t on the committee, like West Virginia’s Joe Manchin and Ed Markey of Massachusetts, also said Thursday that they would not vote for Califf. Markey, Hassan and Manchin all previously expressed reservations about the prospect of Janet Woodcock as an FDA commissioner nominee too.

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

Bio­gen vows to fight CM­S' draft cov­er­age de­ci­sion for Aduhelm be­fore April fi­nal­iza­tion

Biogen executives made clear in an investor call Thursday they are not preparing to run a new CMS-approved clinical trial for their controversial Alzheimer’s drug anytime soon.

As requested in a draft national coverage decision from CMS earlier this week, Biogen and other anti-amyloid drugs will need to show “a meaningful improvement in health outcomes” for Alzheimer’s patients in a randomized, placebo-controlled trial to get paid for their drugs, rather than just the reduction in amyloid plaques that won Aduhelm its accelerated approval in June.

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CRO own­er pleads guilty to ob­struct­ing FDA in­ves­ti­ga­tion in­to fal­si­fied clin­i­cal tri­al da­ta

The co-owner of a Florida-based clinical research site pleaded guilty to lying to an FDA investigator during a 2017 inspection, revealing that she falsely portrayed part of a GlaxoSmithKline pediatric asthma study as legitimate, when in fact she knew that certain data had been falsified, the Department of Justice said Wednesday.

Three other employees — Yvelice Villaman Bencosme, Lisett Raventos and Maytee Lledo — previously pleaded guilty and were sentenced in connection with falsifying data associated with the trial at the CRO Unlimited Medical Research.

Lat­est news on Pfiz­er's $3B+ JAK1 win; Pacts over M&A at #JPM22; 2021 by the num­bers; Bio­gen's Aduhelm reck­on­ing; The sto­ry of sotro­vimab; 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.

For those of you who attended #JPM22 in any shape or form, we hope you had a fruitful time. Regardless of how you spent the past hectic week, may your weekend be just what you need it to be.

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‘Skin­ny la­bels’ on gener­ics can save pa­tients mon­ey, re­search shows, but re­cent court de­ci­sions cloud fu­ture

New research shows how generic drug companies can successfully market a limited number of approved indications for a brand name drug, prior to coming to market for all of the indications. But several recent court decisions have created a layer of uncertainty around these so-called “skinny” labels.

While courts have generally allowed generic manufacturers to use their statutorily permitted skinny-label approvals, last summer, a federal circuit court found that Teva Pharmaceuticals was liable for inducing prescribers and patients to infringe GlaxoSmithKline’s patents through advertising and marketing practices that suggested Teva’s generic, with its skinny label, could be employed for the patented uses.

UP­DAT­ED: CMS to re­strict cov­er­age of Bio­gen's con­tro­ver­sial Alzheimer's drug to on­ly clin­i­cal tri­als

The Centers for Medicare and Medicaid Services on Tuesday said it will only pay for Biogen’s Aduhelm and other FDA-approved anti-amyloid monoclonal antibodies for Alzheimer’s disease under CMS-approved randomized controlled trials.

The draft national coverage decision, which insurers nationwide are likely to follow, makes clear that CMS will be looking for randomized controlled trials that “demonstrate a clinically meaningful benefit in cognition and function.” That will be a tough task for Biogen, which previously showed conflicting benefits from past Aduhelm trials that were initially cut short due to futility and then resurrected for the accelerated approval.

Susan Galbraith, AstraZeneca EVP, Oncology R&D

Can­cer pow­er­house As­traZeneca rolls the dice on a $75M cash bet on a buzzy up­start in the on­col­o­gy field

After establishing itself in the front ranks of cancer drug developers and marketers, AstraZeneca is putting its scientific shoulder — and a significant amount of cash — behind the wheel of a brash new upstart in the biotech world.

The pharma giant trumpeted news this morning that it is handing over $75 million upfront to ally itself with Scorpion Therapeutics, one of those biotechs that was newly birthed by some top scientific, venture and executive talent and bequeathed with a fortune by way of a bankroll to advance an only hazily explained drug platform. And they are still very much in the discovery and preclinical phase.

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