Dems, Re­pub­li­cans split on 340B drug pric­ing pro­gram in Sen­ate hear­ing

The di­vid­ing line be­tween Sen­ate De­moc­rats and Re­pub­li­cans on the 340B drug pric­ing pro­gram was set on Thurs­day, with De­moc­rats sid­ing with the hos­pi­tals, say­ing the sav­ings from the pro­gram is des­per­ate­ly need­ed for the poor­est pop­u­la­tions, while Re­pub­li­cans took the side of drug­mak­ers, say­ing the pro­gram is be­ing abused and needs to be re­formed.

But the hear­ing al­so put the spot­light on the lack of trans­paren­cy from both the phar­ma­ceu­ti­cal and hos­pi­tal in­dus­tries, as nei­ther side could agree to some ba­sic sta­tis­tics, such as what per­cent of the to­tal drug spend in the US goes in­to the 340B pro­gram.

Lamar Alexan­der

For in­stance, the Health Re­sources & Ser­vices Ad­min­is­tra­tion, which over­sees the pro­gram, says that some­where be­tween 1% and 2% of the na­tion’s drug spend is at­trib­uted to the 340B pro­gram.

But Sen Lamar Alexan­der (R-TN) on Thurs­day ques­tioned what per­cent of what Amer­i­cans spend on pre­scrip­tion drugs is avail­able to safe­ty net hos­pi­tals and clin­ics for the pur­pos­es of 340B.

“Is it $6 bil­lion or $8 bil­lion or $14 bil­lion? If it’s 1 or 2%, well that’s just a tax on phar­ma­ceu­ti­cal com­pa­nies that we’re spend­ing for a good pur­pose, but if it’s 6% to 8%, then that’s a pret­ty big tax. I’d like to get those fig­ures,” Alexan­der said.

Lori Reil­ly

Lori Reil­ly, ex­ec­u­tive vice pres­i­dent of the lob­by­ing group PhRMA, told law­mak­ers that the to­tal spend on dis­counts by phar­ma­ceu­ti­cal com­pa­nies was $8 bil­lion in 2016, and that the to­tal 2016 spend on phar­ma­ceu­ti­cals in the US was “in the $390 bil­lion range,” though she could not con­firm an ex­act fig­ure to Alexan­der.

Sen Eliz­a­beth War­ren (D-MA), mean­while, said the size of the US drug mar­ket in 2015 was $457 bil­lion, while point­ing out that phar­ma­ceu­ti­cal com­pa­nies’ mar­gins were sig­nif­i­cant­ly high­er (she said six times as high) than hos­pi­tals’ mar­gins.

Eliz­a­beth War­ren

Pew Char­i­ta­ble Trusts, mean­while, re­cent­ly spot­light­ed the var­i­ous es­ti­mates and pro­jec­tions on drug spend­ing in the US, not­ing the dif­fer­ences among dif­fer­ent groups.

And though PhRMA’s Reil­ly said ear­li­er in the hear­ing that phar­ma­ceu­ti­cal com­pa­nies “do not want this pro­gram to dis­ap­pear,” War­ren took is­sue with PhRMA’s ar­gu­ment that the 340B rais­es drug prices.

“If 340B didn’t ex­ist, drug com­pa­nies would have an ex­tra $6 bil­lion in their pock­et, that’s less than 1% of glob­al phar­ma­ceu­ti­cal sales rev­enue,” War­ren said. “The loss that they’re kick­ing and scream­ing about is a tiny frac­tion of the many bil­lions of dol­lars they pull down every year in prof­its.”

Rep­re­sen­ta­tives of health cen­ters and hos­pi­tals, mean­while, not­ed that re­forms to low­er what drug­mak­ers spend on 340B dis­counts would hurt.

How­ev­er, re­form and more over­sight may still come.

study pub­lished in Health Af­fairs in 2014 found that 340B hos­pi­tals are ex­pand­ing their base in­to com­mu­ni­ties that tend to be af­flu­ent and well-in­sured, which runs counter to the ob­jec­tives of the pro­gram. The Al­liance for In­tegri­ty and Re­form of 340B, backed by the bio­phar­ma in­dus­try and oth­er groups, al­so re­leased a re­port that found in 2015, 61% of par­tic­i­pants spent less on char­i­ty care com­pared to both 2014 and 2013 de­spite ad­di­tion­al rev­enue re­ceived.


First pub­lished here. Reg­u­la­to­ry Fo­cus is the flag­ship on­line pub­li­ca­tion of the Reg­u­la­to­ry Af­fairs Pro­fes­sion­als So­ci­ety (RAPS), the largest glob­al or­ga­ni­za­tion of and for those in­volved with the reg­u­la­tion of health­care and re­lat­ed prod­ucts, in­clud­ing med­ical de­vices, phar­ma­ceu­ti­cals, bi­o­log­ics and nu­tri­tion­al prod­ucts. Email news@raps.org for more in­for­ma­tion.

Fangliang Zhang, AP Images

Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

President Donald Trump (left) and Moncef Slaoui, head of Operation Warp Speed (Alex Brandon, AP Images)

UP­DAT­ED: White House names fi­nal­ists for Op­er­a­tion Warp Speed — with 5 ex­pect­ed names and one no­table omis­sion

A month after word first broke of the Trump Administration’s plan to rapidly accelerate the development and production of a Covid-19 vaccine, the White House has selected the five vaccine candidates they consider most likely to succeed, The New York Times reported.

Most of the names in the plan, known as Operation Warp Speed, will come as little surprise to those who have watched the last four months of vaccine developments: Moderna, which was the first vaccine to reach humans and is now the furthest along of any US effort; J&J, which has not gone into trials but received around $500 million in funding from BARDA earlier this year; the joint AstraZeneca-Oxford venture which was granted $1.2 billion from BARDA two weeks ago; Pfizer, which has been working with the mRNA biotech BioNTech; and Merck, which just entered the race and expects to put their two vaccine candidates into humans later this year.

Mer­ck wins a third FDA nod for an­tibi­ot­ic; Mereo tack­les TIG­IT with $70M raise in hand

Merck — one of the last big pharma bastions in the beleaguered field of antibiotic drug development — on Friday said the FDA had signed off on using its combination drug, Recarbrio, with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia. The drug could come handy for use in hospitalized patients who are afflicted with Covid-19, who carry a higher risk of contracting secondary bacterial infections. Once SARS-CoV-2, the virus behind Covid-19, infects the airways, it engages the immune system, giving other pathogens free rein to pillage and plunder as they please — the issue is particularly pertinent in patients on ventilators, which in any case are breeding grounds for infectious bacteria.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

RA Cap­i­tal, Hill­house join $310M rush to back Ever­est's climb to com­mer­cial heights in Chi­na

Money has never been an issue for Everest Medicines. With an essentially open tab from their founders at C-Bridge Capital, the biotech has gone two and a half years racking up drug after drug, bringing in top exec after top exec, and issuing clinical update after update.

But now other investors want in — and they’re betting big.

Everest is closing its Series C at $310 million. The first $50 million comes from the Jiashan National Economic and Technological Development Zone; the remaining C-2 tranche was led by Janchor Partners, with RA Capital Management and Hillhouse Capital as co-leaders. Decheng Capital, GT Fund, Janus Henderson Investors, Rock Springs Capital, Octagon Investments all joined.

GSK presents case to ex­pand use of its lu­pus drug in pa­tients with kid­ney dis­ease, but the field is evolv­ing. How long will the mo­nop­oly last?

In 2011, GlaxoSmithKline’s Benlysta became the first biologic to win approval for lupus patients. Nine years on, the British drugmaker has unveiled detailed positive results from a study testing the drug in lupus patients with associated kidney disease — a post-marketing requirement from the initial FDA approval.

Lupus is a drug developer’s nightmare. In the last six decades, there has been just one FDA approval (Benlysta), with the field resembling a graveyard in recent years with a string of failures including UCB and Biogen’s late-stage flop, as well as defeats in Xencor and Sanofi’s programs. One of the main reasons the success has eluded researchers is because lupus, akin to cancer, is not just one disease — it really is a disease of many diseases, noted Al Roy, executive director of Lupus Clinical Investigators Network, an initiative of New York-based Lupus Research Alliance that claims it is the world’s leading private funder of lupus research, in an interview.

Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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