The White House re­view of drug prices: Don't hate the play­er — hate the game

For­eign na­tions are spong­ing off Amer­i­can in­vest­ment in­to phar­ma­ceu­ti­cal R&D and tak­ing ad­van­tage of by US pa­tients by sys­tem­at­i­cal­ly un­der­pay­ing for drugs, a new study by the White House has con­clud­ed.

Surg­ing drug prices in the Unit­ed States are a thorny yet rare bi­par­ti­san is­sue as an­oth­er pres­i­den­tial elec­tion beck­ons. While Pres­i­dent Trump strug­gles to make good on his promise to low­er drug prices, the bio­phar­ma in­dus­try, which has long thrived in its lais­sez-faire ecosys­tem, has per­sis­tent­ly ar­gued that gov­ern­ment in­ter­ven­tion will sti­fle in­no­va­tion.

Mean­while, US law­mak­ers left, right and cen­ter have ar­gued drug prices in the Unit­ed States are too high — and the in­dus­try holds the crown for the least fa­vored sec­tor by Amer­i­cans, falling be­hind the fed­er­al gov­ern­ment it­self. In De­cem­ber, the HHS opened the door to a pol­i­cy that al­lows for the lim­it­ed im­por­ta­tion of drugs from Cana­da.

This new White House analy­sis, how­ev­er, sug­gests that US drug prices aren’t un­rea­son­able — its that for­eign gov­ern­ments aren’t pay­ing enough for Amer­i­can phar­ma­ceu­ti­cal break­throughs.

This new study — con­duct­ed by the Coun­cil of Eco­nom­ic Ad­vis­ers (a White House group tasked with of­fer­ing the US pres­i­dent ad­vice on eco­nom­ic pol­i­cy) — com­pared the prices of 200 top-sell­ing brand­ed drugs in the Unit­ed States against 15 de­vel­oped coun­tries. Eu­ro­pean coun­tries went from pay­ing about half (51%) of US prices for many best­selling drugs in 2003 to about a third (32%) by 2017, the re­port found, not­ing that gov­ern­ments abroad ne­go­ti­ate drug prices on be­half of their cit­i­zens and there­by ar­ti­fi­cial­ly de­press prices.

“These prac­tices abroad dis­pro­por­tion­ate­ly cost U.S. pa­tients and tax­pay­ers be­cause they pre­vent the Unit­ed States from un­der­tak­ing do­mes­tic poli­cies to low­er drug prices with­out slow­ing down the pace at which new and bet­ter prod­ucts en­ter the mar­ket,” the re­searchers wrote.

“We find that if free-rid­ing abroad was re­duced and for­eign rel­a­tive drug prices re­flect­ed rel­a­tive GDP per capi­ta, to­tal in­no­va­tor rev­enues from those coun­tries would have been $194 bil­lion high­er in 2017, rais­ing glob­al rev­enues by 42 per­cent. Re­duc­ing for­eign price con­trols would in­crease prof­its and in­no­va­tion, there­by lead­ing to greater com­pe­ti­tion and low­er prices for U.S. pa­tients.”

For in­stance, Cana­da paid 35% of US prices in 2017 — even though its GDP per capi­ta is 78% of the Unit­ed States. If Cana­da were to shoul­der a pro­por­tion­ate cost — it would have paid $27.2 bil­lion in­stead of the ac­tu­al $12.2 bil­lion it part­ed with that year, CEA re­searchers claimed.

In oth­er words, the White House is sug­gest­ing its im­po­tence in im­ple­ment­ing drug price con­trols is linked to for­eign gov­ern­ments not pay­ing their fair share for ben­e­fit­ting from Amer­i­can in­vest­ment in­to phar­ma­ceu­ti­cal R&D.

Crit­ics of that ar­gu­ment will be quick to note that drug prices in the Unit­ed States — a frac­tured sys­tem of health care that runs on pub­lic and pri­vate in­sur­ance, fur­ther com­pli­cat­ed by phar­ma­cy ben­e­fit man­agers — are un­rea­son­ably high and are not nec­es­sar­i­ly linked to the in­vest­ments in R&D. An­nu­al and some­times bian­nu­al hikes that of­ten ex­ceed the rate of in­fla­tion add an­oth­er lay­er of frus­tra­tion.

GoodRx, a com­pa­ny that tracks pre­scrip­tion drug prices in the Unit­ed States and of­fers dis­counts on med­ica­tions, has found that since 2014 (when it start­ed track­ing the da­ta) the pace of an­nu­al price hikes has in­creased, and the num­ber of drugs that are get­ting price up­grades has al­so be­come pro­nounced.

How­ev­er, as po­lit­i­cal scruti­ny in­to drug pric­ing in­ten­si­fied in re­cent years, a hand­ful of big drug­mak­ers pledged to keep their an­nu­al price hikes un­der 10% — and the gen­er­al spot­light on pric­ing has al­so be­gun to thaw the over­all mag­ni­tude of hikes.

This Jan­u­ary, over 100 drug­mak­ers raised the price for 619 brand­ed drugs by an av­er­age of 5.2%. In Jan­u­ary 2019, 486 brand­ed drugs saw in­creas­es by an av­er­age of 5.2%, while 580 brand­ed drugs in­creased by an av­er­age of 8% in Jan­u­ary 2018, ac­cord­ing to GoodRx da­ta. These num­bers should look dif­fer­ent when the to­tal num­ber of hikes over the rest of the year are ac­count­ed for.

Drug man­u­fac­tur­ers of­ten ar­gue that they raise list prices to ac­count for high­er re­bates that are ne­go­ti­at­ed by PBMs — and that net prices and what the pa­tient on av­er­age pays in cer­tain cas­es are in fact low­er.

“Re­bates are kind of hard to no­tice be­cause they’re kind of very hush-hush,” Tori Marsh, a GoodRx health in­sights an­a­lyst, not­ed in an in­ter­view with End­points News.

When list prices in­crease, that hike is passed on to in­sured pa­tients through co-pay­ments and pre­mi­ums, she said. “And so in­evitably, lat­er on down the line, they’re like­ly go­ing to be pay­ing more be­cause drug prices are just in­creas­ing — so they might not ex­pe­ri­ence it im­me­di­ate­ly at the phar­ma­cy but it will trick­le down.”

Lessons for biotech and phar­ma from a doc­tor who chased his own cure

After being struck by a rare disease as a healthy third year medical student, David Fajgenbaum began an arduous journey chasing his own cure. Amidst the hustle of this year’s JP Morgan conference, the digital trials platform Medable partnered with Endpoints Studio to share Dr. Fajgenbaum’s story with the drug development industry.

What follows is an edited transcript of the conversation between Medable CEO Dr. Michelle Longmire and Dr. Fajgenbaum, and it is full of lessons for biotech executives charged with bringing the next generation of medicines to patients.

Kathy High (file photo)

Gene ther­a­py pi­o­neer Kathy High has left Spark af­ter com­plet­ing $4.3B union with Roche

Kathy High dedicated the past seven years of her life shepherding experimental gene therapies she’s developed at Children’s Hospital of Philadelphia toward the market as president and head of R&D at Spark Therapeutics. Now that the biotech startup is fully absorbed into Roche — with an FDA approval, a $4.3 billion buyout and a promising hemophilia program to boast — she’s ready to move on.

Roche confirmed her departure with Endpoints News and noted “she will take some well-deserved time off and then will begin a new chapter in a sabbatical at a university.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,800+ biopharma pros reading Endpoints daily — and it's free.

Deborah Dunsire

The fourth CGRP mi­graine drug is here. Time for Lund­beck to prove it's worth $2B

They may be late, but Lundbeck is now officially in the game for preventing migraine with CGRP drugs.

The FDA has OK’d eptinezumab, the prize in Lundbeck’s $2 billion acquisition of Alder. Like rival offerings from Amgen/Novartis, Eli Lilly and Teva, the antibody blocks the calcitonin gene-related peptide, which is believed to dilate blood vessels in the brain and cause pain.

It will now be sold as Vyepti. The company has yet to announce a price. Amgen and Novartis had set the wholesale acquisition cost of their pioneering Aimovig at $6,900 for a year’s supply before raising it slightly this year; Lilly and Teva had followed suit with Emgality and Ajovy.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,800+ biopharma pros reading Endpoints daily — and it's free.

Tal Zaks (Moderna via YouTube)

For two decades, a new vac­cine tech­nol­o­gy has been slow­ly ap­proach­ing prime time. Now, can it stop a pan­dem­ic?

Two months before the outbreak, Moderna CMO Tal Zaks traveled from Cambridge, MA to Washington DC to meet with Anthony Fauci and the leaders of the National Institutes of Health.

For two years, Moderna had worked closely with NIH researchers to build a new kind of vaccine for MERS, one of the deadliest new viruses to emerge in the 21st century. The program was one test for a new technology designed to be faster, cheaper and more precise than the ways vaccines had been made for over a century. They had gathered evidence the technology could work in principle, and Fauci, the longtime head of the National Institute of Allergy and Infectious Diseases and a longtime advocate for better epidemic preparedness, wanted to see if it, along with a couple of other approaches, could work in a worst-case scenario: A pandemic.

“[We were] trying to find a test case for how to demonstrate if our technology could rapidly prepare,” Zaks told Endpoints News.

Zaks and Fauci, of course, wouldn’t have to wait to develop a new test. By year’s end, an outbreak in China would short circuit the need for one and throw them into 24/7 work on a real-world emergency. They also weren’t the only ones with new technology who saw a chance to help in a crisis.

An ocean away, Lidia Oostvogels was still on vacation and relaxing at her mother’s house in Belgium when her Facebook started changing. It was days after Christmas and on most people’s feeds, the news that China had reported a novel virus to the World Health Organization blurred into the stream of holiday sweaters and fir trees. But on Oostvogels’s feed, full of vaccine researchers and virus experts, speculation boiled: There was a virus in China, something contained to the country, but “exotic,” “weird,” and maybe having to do with animals. Maybe a coronavirus.

Lidia Oostvogels

“I was immediately thinking like, ‘Hey, this is something that if needed, we can play a role,'” Oostvogels told Endpoints.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,800+ biopharma pros reading Endpoints daily — and it's free.

Tim Mayleben (file photo)

Es­pe­ri­on's goldilocks cho­les­terol fight­er wins FDA ap­proval — will its 'tra­di­tion­al' pric­ing ap­proach spur adop­tion?

It’s more effective than decades-old statins but not as good as the injectable PCSK9 — the goldilocks treatment for cholesterol-lowering, bempedoic acid, has secured FDA approval.

Its maker, Esperion Therapeutics, is betting that their pricing strategy — a planned list price of between $10 to $11 a day — will help it skirt the pushback the PCSK9 cholesterol fighters, Repatha and Praluent, got from payers for their high sticker prices.

The sky-high expectations for the pair of PCSK9 drugs that were first approved in 2015 quickly simmered — and despite a 60% price cut, coupled with data showing the therapies also significantly cut cardiovascular risk, sales have not really perked up.

Esperion is convinced that by virtue of being a cheaper oral therapy, bempedoic acid will hit that sweet spot in terms of adoption.

“We’re kind of like the old comfortable shoe,” Esperion’s chief commercial officer Mark Glickman remarked in an interview with Endpoints News ahead of the decision date. “It’s an oral product, once-daily and nontitratable — these are things that just resonate so true with patients and physicians and I think we’ve kind of forgotten about that.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,800+ biopharma pros reading Endpoints daily — and it's free.

James Collins, Broad Institute via Youtube

UP­DAT­ED: A space odyssey for new an­tibi­otics: MIT's ma­chine learn­ing ap­proach

Drug development is complex, expensive and comes with lousy odds of success — but in most cases, if you make it across the finish line brandishing a product with an edge (and play your cards right) it can be a lucrative endeavor.

As it stands, the antibiotic market is cursed — it harbors the stink of multiple bankruptcies, a dearth of innovation, and is consequently barely whetting the voracious appetites of big pharma or venture capitalists. Enter artificial intelligence — the biopharma industry’s cure-all for the pesky process of making a therapeutic, including data mining, drug discovery, optimal drug delivery, and addressable patient population.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,800+ biopharma pros reading Endpoints daily — and it's free.

Gilead los­es two more patent chal­lenges on HIV pill, set­ting up court­room fight in Delaware

Gilead sustained two more losses in their efforts to rid themselves of an activist-backed patent lawsuit from the US government over a best-selling HIV pill.

Urged on by activists seeking to divert a portion of Gilead’s revenue to clinics and prevention programs, the Department of Health and Human Services made a claim to some of the patents for the best-selling HIV prevention drug, Truvada, also known as PrEP. Gilead responded by arguing in court that HHS’s patents were invalid.

Today, the US Patent and Trademark Office ruled that Gilead was likely to lose the last two of those challenges as well. The USPTO ruled against Gilead on the first two patents earlier this month.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,800+ biopharma pros reading Endpoints daily — and it's free.

Christos Kyratsous (via LinkedIn)

He built a MERS treat­ment in 6 months and then the best Ebo­la drug. Now Chris­tos Kyrat­sous turns his sights on Covid-19

TARRYTOWN, NY — In 2015, as the Ebola epidemic raged through swaths of West Africa, Kristen Pascal’s roommates sat her down on their couch and staged an intervention.

“Are you sure this is what you want to be doing with your life?” she recalls them asking her.

Special report

Pascal, a research associate for Regeneron, had been coming home at 2 am and leaving at 6 am. At one point, she didn’t see her roommate for a week. For months, that was life in Christos Kyratsous’ lab as the pair led a company-wide race to develop the first drug that could effectively treat Ebola before the outbreak ended. For Pascal, that was worth it.

“I’m ok, I don’t have Ebola,” Pascal told them. “I see that death toll rising and I can’t not do something about it.”

Last August, Regeneron learned they had succeeded: In a large trial across West Africa, their drug, REGN-EB3, was vastly more effective than the standard treatments. It was surprise news for the company, coming just 10 months into a trial they thought would take several years and a major victory in the global fight against a deadly virus that killed over 2,000 in 2019 and can carry a mortality rate of up to 90%.

For Kyratsous and Pascal, though, it brought only fleeting reprieve. Just four months after the NIH informed them REGN-EB3 worked, Kyratsous was back in his office reading the New York Times for updates on a new outbreak on another continent, and wondering alongside Pascal and senior management whether it was time to pull the trigger again.

In late January, as the death toll swelled and the first confirmed cases outside China broke double digits, they made a decision. Soon they were back on the phone with the multiple government agencies and their coronavirus partners at the University of Maryland’s Level 3 bio lab. The question was simple: Can Kyratsous and his team use a process honed over two previous outbreaks, and create a treatment before the newest epidemic ends? Or worse, if, as world health experts fear, it doesn’t vanish but becomes a recurrent virus like the flu?

“Christos likes things immediately,” Matt Frieman, Regeneron’s coronavirus collaborator at the University of Maryland, told Endpoints. “That’s what makes us good collaborators: We push each other to develop things faster and faster.”

Kristen Pascal (Regeneron)

Click on the image to see the full-sized version

The first time Regeneron tried to respond to a global outbreak, it was something of a systems test, Kyratsous explains from his office at Regeneron’s Tarrytown headquarters. Kyratsous, newly promoted, has crammed it with photos of his family, sketches of viral vectors and a shark he drew for his 3-year-old son. He speaks rapidly – an idiosyncrasy his press person says has only been aggravated this afternoon by the contents of his “Regeneron Infectious Diseases”-minted espresso glass – and he gesticulates with similar fluidity, tumbling through antibodies, MERS, the novel coronavirus, Ebola-infected monkeys.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 72,800+ biopharma pros reading Endpoints daily — and it's free.

Bank­rupt an­tibi­otics mak­er Ar­a­digm turns to old part­ner/in­vestor for fi­nal $3M fire sale

Grifols once paid Aradigm $26 million for a stake in its inhaled antibiotics. But with Aradigm now in bankruptcy, the Spanish drugmaker is dishing out a final $3.2 million to buy it all.

The fire sale — which comes one year after Aradigm filed for Chapter 11 following a regulatory trifecta for disaster — will see Grifols obtain assets and IP to Apulmiq (formerly Pulmaquin and Linhaliq in Europe), Lipoquin and free ciprofloxacin. In addition to waiving its claims in the bankruptcy case, Grifols also agreed to milestone payments up to $3 million more upon any regulatory approvals.