Pelosi drug pric­ing bill promis­es sav­ings, but could gag R&D — CBO analy­sis

The De­moc­rats’ drug pric­ing bill — un­veiled by Speak­er Nan­cy Pelosi last month — could save Medicare spend­ing by $345 bil­lion over a sev­en-year pe­ri­od, a new analy­sis sug­gests. But the ven­omous cli­mate of im­peach­ment pro­ceed­ings and the in­ten­si­fy­ing dis­cord be­tween the De­mo­c­rat-con­trolled House and Re­pub­li­can-ma­jor­i­ty Sen­ate por­tends the bill will un­like­ly ever be­come law.

Tech­ni­cal­ly, both sides of the aisle agree drug prices in the Unit­ed States need some low­er­ing. The De­moc­rats’ bill, H.R.3 – Low­er Drug Costs Now Act of 2019, is en­gi­neered to em­pow­er the HHS to ne­go­ti­ate prices for the 125 most ex­pen­sive pre­scrip­tion drugs with­out at least two com­peti­tors — the Trump ad­min­is­tra­tion has al­ready backed such a mea­sure for the Vet­er­ans As­so­ci­a­tion. Un­der the bill, prices for this cat­e­go­ry of med­i­cines are not in­tend­ed to ex­ceed 120% of the av­er­age price in cer­tain oth­er coun­tries (Aus­tralia, Cana­da, France, Ger­many and the Unit­ed King­dom), akin to a pro­pos­al float­ed by Trump ear­li­er this year, which sug­gest­ed prices be pegged against what oth­er na­tions were pay­ing as part of an “in­ter­na­tion­al pric­ing in­dex”.

Apart from un­der­stand­ably elic­it­ing the ire of the bio­phar­ma in­dus­try — which holds the crown for the least fa­vored sec­tor by Amer­i­cans, falling be­hind the fed­er­al gov­ern­ment it­self — the bill has al­so met with crit­i­cism from mem­bers of the GOP. The dis­sent — shared by both fac­tions — stems from the be­lief that the ini­tia­tive would in­evitably chill in­vest­ment in phar­ma­ceu­ti­cal re­search and sti­fle in­no­va­tion.

In the fresh, but pre­lim­i­nary, analy­sis pub­lished on Fri­day by the Con­gres­sion­al Bud­get Of­fice (CBO), the bill would not on­ly cut fed­er­al di­rect spend­ing for Medicare by $345 bil­lion over the 2023-2029 pe­ri­od but would change the com­plex­ion of the drug mar­ket by chang­ing in­cen­tives that man­u­fac­tur­ers cur­rent­ly en­joy.

“A man­u­fac­tur­er that was dis­sat­is­fied with a ne­go­ti­a­tion could pull a drug out of the U.S. mar­ket en­tire­ly, though CBO ex­pects that would be un­like­ly for drugs al­ready be­ing sold in the Unit­ed States. Man­u­fac­tur­ers would ini­tial­ly set list prices of some new drugs in the U.S. high­er than un­der ex­ist­ing law, al­though the net prices paid by con­sumers over time could be low­er in many such cas­es,” the re­port said.

The CBO al­so cau­tioned that the bill could al­so mo­ti­vate man­u­fac­tur­ers to spike drug prices in coun­tries out­side the Unit­ed States to make up for lost rev­enue, or not sell cer­tain med­i­cines at all out­side the Unit­ed States to elim­i­nate ref­er­ence prices for US ne­go­ti­a­tions.

PhRMA, a pow­er­ful phar­ma lob­by group, took is­sue with this claim. “This re­flects a lack of un­der­stand­ing of for­eign pric­ing sys­tems, which have laws and reg­u­la­tions that pro­hib­it man­u­fac­tur­ers from uni­lat­er­al­ly set­ting prod­uct prices and/or in­creas­ing the prices of prod­ucts,” a spokesper­son not­ed in an email to End­points News.

The CBO’s analy­sis al­so mir­rored some of the con­cerns ex­pressed by Re­pub­li­cans. Al­though in the short term low­er prices will en­hance ac­cess to med­i­cines and im­prove health — over the longer term,  di­min­ished spend­ing on re­search and de­vel­op­ment will cul­mi­nate in the in­tro­duc­tion of few­er new drugs, the re­port pre­dict­ed.

Al­though the CBO’s analy­sis of the bill is not com­plete, “its pre­lim­i­nary es­ti­mate is that a re­duc­tion in rev­enues of $0.5 tril­lion to $1 tril­lion would lead to a re­duc­tion of ap­prox­i­mate­ly 8 to 15 new drugs com­ing to mar­ket over the next 10 years. The over­all ef­fect on the health of fam­i­lies in the Unit­ed States that would stem from in­creased use of pre­scrip­tion drugs but de­creased avail­abil­i­ty of new drugs is un­clear.”

These cal­cu­la­tions were based on the premise that the FDA ap­proves, on av­er­age, about 30 new drugs an­nu­al­ly. In 2018, the US agency cleared 59 drugs; in 2017, it ap­proved 46; and in 2016 the num­ber was 22. So far this year, the reg­u­la­tor has green-light­ed 30.

“It takes an av­er­age of 10-12 years to de­vel­op a new med­i­cine so the biggest im­pact on in­no­va­tion will oc­cur out­side of the ten-year bud­get win­dow,” the PhRMA spokesper­son added.

Sep­a­rate­ly, an analy­sis by the CMS sug­gest­ed that the bill could cur­tail to­tal US spend­ing on health­care by about $480 bil­lion over a decade — sav­ing Amer­i­can house­holds rough­ly $158 bil­lion in low­er pre­mi­ums and small­er out-of-pock­et costs.

Source: CMS, 2019

Click on the im­age to see the full-sized ver­sion

Ear­li­er this month, Trump claimed that the phar­ma­ceu­ti­cal in­dus­try was be­hind the im­peach­ment in­quiry from House De­moc­rats, with­out of­fer­ing any ev­i­dence to sup­port his as­ser­tion.

“Does Trump’s al­lu­sion to Big Phar­ma’s role as the bankroller of the im­peach­ment “hoax” get con­demned by the oth­er side, there­by de­fend­ing phar­ma? That prob­a­bly won’t hap­pen, but we are be­gin­ning to think the util­i­ty of phar­ma as a po­lit­i­cal punch­ing bag may be start­ing to wear thin giv­en the ab­sur­di­ty of this lat­est al­le­ga­tion,” Baird’s Bri­an Sko­r­ney wrote in a note on Oc­to­ber 4.

So­cial im­age: Nan­cy Pelosi, AP Im­ages

Con­quer­ing a silent killer: HDV and Eiger Bio­Phar­ma­ceu­ti­cals

Hepatitis delta, also known as hepatitis D, is a liver infection caused by the hepatitis delta virus (HDV) that results in the most severe form of human viral hepatitis for which there is no approved therapy.

HDV is a single-stranded, circular RNA virus that requires the envelope protein (HBsAg) of the hepatitis B virus (HBV) for its own assembly. As a result, hepatitis delta virus (HDV) infection occurs only as a co-infection in individuals infected with HBV. However, HDV/HBV co-infections lead to more serious liver disease than HBV infection alone. HDV is associated with faster progression to liver fibrosis (progressing to cirrhosis in about 80% of individuals in 5-10 years), increased risk of liver cancer, and early decompensated cirrhosis and liver failure.
HDV is the most severe form of viral hepatitis with no approved treatment.
Approved nucleos(t)ide treatments for HBV only suppress HBV DNA, do not appreciably impact HBsAg and have no impact on HDV. Investigational agents in development for HBV target multiple new mechanisms. Aspirations are high, but a functional cure for HBV has not been achieved nor is one anticipated in the forseeable future. Without clearance of HBsAg, anti-HBV investigational treatments are not expected to impact the deadly course of HDV infection anytime soon.

No­var­tis is ax­ing 150 ear­ly dis­cov­ery jobs as CNI­BR shifts fo­cus to the de­vel­op­ment side of R&D

Novartis is axing some 150 early discover jobs in Shanghai as it swells its staff on the drug development side of the equation in China. And the company is concurrently beefing up its investment in China’s fast-growing biotech sector with a plan to add to its investments in local VCs.

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Democratic presidential candidate, U.S. Sen. Elizabeth Warren (D-MA) speaks during the Nevada Democrats' "First in the West" event at Bellagio Resort & Casino on November 17, 2019 in Las Vegas, Nevada (Getty Images)

Eliz­a­beth War­ren pro­pos­es us­ing com­pul­so­ry li­cens­ing, an­titrust ac­tions to break bio­phar­ma’s con­trol of drug pric­ing — and here are the block­busters she’s tar­get­ing first

Nancy Pelosi’s drug pricing bill may have sparked some industrial strength headaches on the money side of biopharma, but Elizabeth Warren seems determined to become biopharma’s Nightmare on Pennsylvania Avenue.
Warren, one of the top-ranked candidates for the Democratic presidential nomination backing Medicare for all, is circulating a new plan that promises to break the industry’s grip on drug prices — and she has some very specific examples of how she would do it.
The Warren plan would rely on the federal government’s compulsory licensing powers to seize the IP of blockbuster drugs like Truvada and Harvoni to provide them at a fraction of what Gilead sells them for in the US. And she would throw some antitrust actions in as needed to rein in the price of Humira, AbbVie’s cash cow that continues to dominate the list of the most profitable therapeutics on the market.
Notably, she plans to rely on the powers already vested in the federal government, rather than suggest remedies that would require the assent of a deeply divided Congress.
In addition to the blockbusters on the list, Warren sends a clear signal that the same tactics would be used to beef up the supply of cheap antibiotics, as needed. And the same action could befall any other therapy patients can’t afford.

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Mer­ck’s $1B cash gam­ble pays off with a sur­pris­ing PhI­II car­dio suc­cess for Bay­er’s heart drug veri­ciguat

More than 3 years after Merck stepped up and paid $1 billion in cold, hard cash to gain the US commercial rights to Bayer’s high-risk heart drug vericiguat in a broad-ranging cardio alliance, the partners say their Phase III study has come through with promising data and a date with regulators.
We don’t have the data, and won’t until they put it out at an upcoming scientific session, but Merck touted the results, saying that their big Phase III VICTORIA study hit the primary endpoint  — with vericiguat combined with available therapies reducing “the risk of the composite endpoint of heart failure hospitalization or cardiovascular death in patients with worsening chronic heart failure with reduced ejection fraction (HFrEF) compared to placebo when given in combination with available heart failure therapies.”
Depending on the hard data, and how it breaks out with the combinations used, this drug could pose a threat to Novartis’ blockbuster drug Entresto, currently at $1.6 billion while analysts expect peak sales to hit $4 billion.
The drug is a soluble guanylate cyclase (sGC) stimulator, which Bayer and Merck have had high hopes for. Evidently, so did cardiologists. Cowen’s last analysis set potential sales at $400 million in 2024, but that number could go up significantly now.
Cowen’s Steve Scala noted this morning:
Vericiguat could be a lucrative product for Merck, and one with potentially under-appreciated value. At Cowen’s Therapeutics Conference in September 2019, 80% of specialists anticipated a positive result from VICTORIA whereas only 51% of investors shared this optimism.
Investigators recruited more than 5,000 patients at more than 600 centers in 42 countries for this study — one of the most expensive propositions in R&D. Millions of people in the US suffer from heart failure with reduced ejection fraction when the failing heart fails to contract properly to eject blood into the system. Bayer holds ex-US rights to the drug and also stands to earn cash from the $1.1 billion in milestones Merck agreed on for their collaboration.
Remarkably, the drug was pushed into Phase III despite failing the mid-stage trial — though investigators flagged a success at the high dose of 10 mg. In VICTORIA, researchers started patients at 2.5 mg and then titrated up to 5 and then 10 mg.

Alk­er­mes forges $950M biotech buy­out deal in a bold bet on an ear­ly-stage CNS drug plat­form

Alkermes $ALKS is investing $100 million cash and committing up to $850 million more in milestones in a big wager on a very early-stage CNS discovery platform. And the biotech is adding $20 million more to fund next year’s new research work on the platform it’s acquiring in today’s buyout with an eye to expanding the research work in oncology.

The biotech, helmed by Richard Pops, is buying Rodin Therapeutics, which had focused early on Alzheimer’s disease. Pops’ buyout, though, isn’t focused solely on the most troublesome sector in pharma R&D.

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(Image: Associated Press)

Amarin emerges from an ex­pert pan­el re­view with a clear en­dorse­ment for Vas­cepa and high odds of suc­cess when the FDA weighs in for­mal­ly

Several FDA experts who gathered Thursday to consider the landmark approval of Vascepa to reduce cardio events in an at-risk population voiced their unease about various aspects of the efficacy and safety data, or ultimately the population it should be used to treat. But the overwhelming belief that the data pointed to the drug’s benefit and clearly outweighed risks carried the day for Amarin.

The panel voted unanimously (16 to 0) to support the company’s positive data presentation — backing an OK for expanding the label to include reducing cardio risk. The vote points Amarin $AMRN down a short path to a formal decision by the FDA, with the odds heavily in its favor. Chances are the rest of the questions about the future of this drug will be hashed out in the label’s small print.

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Left to right: Arthur Pappas, Robert Nelsen, Peter Kolchinsky Doug Cole and David Beier

In rare po­lit­i­cal for­ay, top biotech in­vestors urge Con­gress to re­ject drug pric­ing bill

Thirteen of the top biotech venture capitalists in the country wrote a letter last week warning lawmakers that if Congress passes a drug pricing bill House Speaker Nancy Pelosi has put before lawmakers, they won’t be able to invest in biomedical research at their current rate, and patients will suffer.

“If policies such as those included within H.R. 3, the Lower Drug Costs Now Act, are passed, our ability to continue to invest in future biomedical innovation will be severely constrained, thus crushing the hopes of millions of patient waiting for the next breakthroughs to treat or cure their cancers, rare genetic diseases, Alzheimer’s, or other serious and life-threatening conditions,” they wrote in a letter addressed to the highest-ranking Democrats and Republicans in the House and Senate and acquired by Endpoints News. 

Dicer­na scores broad, 'rest of liv­er' deal with No­vo Nordisk, bag­ging $225M in cash to hit some 30 tar­gets with RNAi plat­form

Turns out Dicerna wasn’t done with deals yet after locking in $200 million upfront from Roche for a hepatitis B cocktail two weeks ago.

Novo Nordisk has signed on as the latest partner to its GalXC RNAi platform, handing over $175 million in cash to claim any and all targets of interest in liver-related cardio-metabolic diseases that are not already reserved in previous pacts. The Danish drugmaker — which has signaled its interest to expand considerably beyond its core diabetes franchise into areas like NASH — is also purchasing $50 million worth of Dicerna’s equity at a 25% premium of $21.93 per share. More research payments and milestones extending to the billions are on the line.

Gene ther­a­py wins the in­side track at EMA; PPD files for IPO

→ Gene therapy maker Orchard Therapeutics has been granted an accelerated assessment for OTL-200 by the EMA’s Committee for Medicinal Products for Human Use (CHMP). The gene therapy — in development in partnership with the San Raffaele-Telethon Institute for Gene Therapy (SR-Tiget) in Milan, Italy — being used towards the treatment of metachromatic leukodystrophy.

→ Pharmaceutical Product Development has announced that its parent company, PPD, Inc has submitted a draft to the SEC relating to the proposal of an IPO of the parent company’s common stock. Number of shares and price range have not yet been determined.