Three con­sid­er­a­tions for the phar­ma in­dus­try as Pres­i­dent Trump fo­cus­es on drug pric­ing

by PwC Health Ad­vi­so­ry: Kar­la An­der­son, Rick Ed­munds, Phil Sclafani, Doug Strang and Will Su­vari


Kar­la An­der­son

As a pres­i­den­tial can­di­date, Pres­i­dent Don­ald Trump re­peat­ed­ly de­cried drug prices, sug­gest­ing that Amer­i­cans should be al­lowed to pur­chase the prod­ucts from abroad and that Medicare should be al­lowed to ne­go­ti­ate their prices. As pres­i­dent, he has con­tin­ued to talk about drug pric­ing. Ad­dress­ing Con­gress on Feb. 28, Trump said he would “work to bring down the ar­ti­fi­cial­ly high cost of drugs, and bring them down im­me­di­ate­ly.”

Pres­i­dent Trump and Re­pub­li­can law­mak­ers al­so have promised to re­peal and re­place the Af­ford­able Care Act (ACA), which in­clud­ed deep manda­to­ry Med­ic­aid drug re­bates and ex­pand­ed the num­ber of health­care or­ga­ni­za­tions that could par­tic­i­pate in the 340B dis­count drug pro­gram. On March 6, House Re­pub­li­cans in­tro­duced a bill, the Amer­i­can Health Care Act, or AH­CA, which rolls back the ACA’s Med­ic­aid ex­pan­sion af­ter 2019 but does not ad­dress the law’s drug re­bates or 340B pro­gram ex­pan­sion.

Al­low­ing Medicare to ne­go­ti­ate drug prices at the na­tion­al lev­el, or al­low­ing reim­por­ta­tion of prod­ucts from oth­er coun­tries, could push prices down. Ei­ther of these op­tions would face a dif­fi­cult leg­isla­tive path. Oth­er con­gres­sion­al ac­tions—such as chang­ing the FDA’s or­phan drug pro­gram to nar­row prod­uct el­i­gi­bil­i­ty or cap prices, or re­quir­ing com­pa­nies to jus­ti­fy price in­creas­es at pub­lic hear­ings—may lead to new pol­i­cy pro­pos­als, or new pres­sure on com­pa­nies to ex­plain the prices of spe­cif­ic prod­ucts (see fig­ure 1 for a list of pol­i­cy pro­pos­als).

Pres­i­dent Trump’s de­sire to bring pri­vate sec­tor tools to bear on pub­lic sec­tor pro­grams, such as cre­at­ing a more com­pet­i­tive en­vi­ron­ment for health­care prod­ucts and in­creas­ing cor­po­rate trans­paren­cy, dove­tails with state-lev­el trans­paren­cy pro­pos­als. In Mary­land, a pro­posed state law would re­quire a raft of new dis­clo­sures for drugs that cost more than $2,500 a year. Six­teen states are con­sid­er­ing sim­i­lar leg­is­la­tion to in­crease com­pa­nies’ dis­clo­sures.

These state-lev­el ef­forts can even­tu­al­ly lead to na­tion­al pol­i­cy. CMS’ Open Pay­ments law, al­so known as the “Sun­shine Act,” was born on the state lev­el be­fore it was adopt­ed as part of the ACA.

Three con­sid­er­a­tions for the in­dus­try

Make a plan. At least sev­en ma­jor drug com­pa­nies have tak­en steps to make drug prices more trans­par­ent, or have com­mit­ted to lim­it­ing an­nu­al price in­creas­es. It’s too ear­ly to eval­u­ate whether these ini­tia­tives go far enough to counter on­go­ing crit­i­cism of in­dus­try pric­ing prac­tices. Phar­ma­ceu­ti­cal and life sci­ences com­pa­nies are un­der pres­sure from all sides—in­clud­ing from in­vestors—to jus­ti­fy pric­ing de­ci­sions. Drug­mak­ers should plan for sce­nar­ios that may re­quire new R&D and oth­er fi­nan­cial dis­clo­sures re­lat­ed to spe­cif­ic drugs. Lim­it­ing sharp price in­creas­es, es­pe­cial­ly for sin­gle-source drugs treat­ing high-cost or so­cial­ly po­lar­iz­ing con­di­tions, can help drug­mak­ers avoid dam­ag­ing head­lines and in­ves­ti­ga­tions.

The ac­tion is in the states. Last year, Ver­mont be­came the first state to en­act drug-pric­ing trans­paren­cy re­quire­ments. New prod­uct-spe­cif­ic re­port­ing re­quire­ments in states like Mary­land or New York could in­flu­ence leg­is­la­tion in oth­er states, or at the fed­er­al lev­el. Con­duct­ing in­ter­nal analy­ses of pric­ing pat­terns across brands can help drug­mak­ers de­vel­op nar­ra­tives to de­fend pric­ing de­ci­sions and in­flu­ence new trans­paren­cy reg­u­la­tions.

Con­sid­er nov­el ap­proach­es. Val­ue-based con­tract­ing may help pro­tect pric­ing pre­mi­ums for prod­ucts that de­liv­er their in­tend­ed out­comes. Mi­cro­fi­nanc­ing op­tions may im­prove pa­tient ac­cess to high-cost spe­cial­ty and rare dis­ease drugs.  Over­all, shift­ing the fo­cus from in­di­vid­ual drug pric­ing to­wards phar­ma­coeco­nom­ic val­ue is in the best in­ter­est of all stake­hold­ers.

 

The Trump ad­min­is­tra­tion and new state-lev­el pro­pos­als could im­pact drug prices

Pro­pos­al Po­ten­tial im­pact Sta­tus
State-lev­el price caps, price in­crease lim­its, or price trans­paren­cy reg­u­la­tions Lim­it­ed abil­i­ty to dri­ve rev­enue growth through pric­ing will sharp­en the need for vol­ume and share growth, putting a pre­mi­um on in­no­va­tion. Trac­tion on the state lev­el could in­spire fed­er­al ef­forts. Pend­ing in 16 states—The phar­ma­ceu­ti­cal in­dus­try spent more than $100 mil­lion to de­feat a Cal­i­for­nia pro­pos­al in 2016 that would have capped drug prices paid by state in­sur­ance plans to the re­bate price paid by the De­part­ment of Vet­er­ans Af­fairs.
Re­peal ACA Med­ic­aid re­bates Re­peal of the Med­ic­aid drug re­bate would raise prices for prod­ucts used by Med­ic­aid ben­e­fi­cia­ries. No mo­men­tum—AH­CA does not re­peal Med­ic­aid drug re­bates, which knock an av­er­age of 23.1% off the av­er­age man­u­fac­tur­er price.
Re­peal ACA 340B pro­gram ex­pan­sion Rein­ing in the 340B ex­pan­sion would be a win for drug­mak­ers, but could lim­it ac­cess to heav­i­ly dis­count­ed 340B drugs. No mo­men­tum—AH­CA does not re­scind 340B ex­pan­sion. A pro­posed rule adding ad­di­tion­al 340B over­sight was with­drawn.
Al­low Medicare Part D to ne­go­ti­ate drug prices A Con­gres­sion­al Bud­get Of­fice (CBO) analy­sis de­ter­mined that Medicare ne­go­ti­a­tions wouldn’t bring down prices sub­stan­tial­ly. In dis­cus­sion—No spe­cif­ic pro­pos­al has emerged that would al­low Medicare to cen­tral­ly ne­go­ti­ate prices for all Part D plans.
Al­low reim­por­ta­tion of drug prod­ucts A 13-year-old CBO as­sess­ment pre­dicts on­ly a small re­duc­tion in prices from reim­por­ta­tion. In dis­cus­sion—No cur­rent leg­isla­tive path. A bill that would have al­lowed drug im­ports from Cana­da was vot­ed down by Sen­ate Re­pub­li­cans and De­moc­rats in Jan­u­ary.
Tweets and oth­er pub­lic sham­ing Pres­i­den­tial tweets and con­gres­sion­al fo­cus could im­pact stock prices, drug prices and prod­uct com­mer­cial­iza­tion plans. Ac­tion tak­en—Con­gres­sion­al hear­ings and Pres­i­den­tial tweets could con­tin­ue.

Biotech Voic­es is a con­tributed ar­ti­cle to End­points News. 

Martin Shkreli [via Getty]

Pris­on­er #87850-053 does not get to add drug de­vel­op­er to his list of cred­its

Just days after Retrophin shed its last ties to founder Martin Shkreli, the biotech is reporting that the lead drug he co-invented flopped in a pivotal trial. Fosmetpantotenate flunked both the primary and key secondary endpoints in a placebo-controlled trial for a rare disease called pantothenate kinase-associated neurodegeneration, or PKAN.

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We­bi­nar: Re­al World End­points — the brave new world com­ing in build­ing fran­chise ther­a­pies

Several biopharma companies have been working on expanding drug labels through the use of real world endpoints, combing through the data to find evidence of a drug’s efficacy for particular indications. But we’ve just begun. Real World Evidence is becoming an important part of every clinical development plan, in the soup-through-nuts approach used in building franchises.

I’ve recruited a panel of 3 top experts in the field — the first in a series of premium webinars — to look at the practical realities governing what can be done today, and where this is headed over the next few years, at the prodding of the FDA.

ZHEN SU — Merck Serono’s Senior Vice President and Global Head of Oncology
ELLIOTT LEVY — Amgen’s Senior Vice President of Global Development
CHRIS BOSHOFF — Pfizer Oncology’s Chief Development Officer

A premium subscription to Endpoints News is required to attend this webinar. Please upgrade to either an Insider or Enterprise plan for access. Already have Endpoints Premium? Please sign-in below. You can contact our Subscriptions team at help@endpointsnews.com with any issues.

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Hal Barron. GSK

GSK's Hal Bar­ron her­alds their sec­ond pos­i­tive piv­otal for cru­cial an­ti-BC­MA ther­a­py, point­ing to a push for quick OKs in a crowd­ed field

Hal Barron has his second positive round of Phase III data in hand for his anti-BCMA antibody drug conjugate belantamab mafodotin (GSK2857916). And GSK’s research chief says the data paves the way for their drive in search of an FDA approval for treating multiple myeloma.

It’s hard to overestimate the importance of this drug for GSK, a cornerstone of Barron’s campaign to make a dramatic impact on the oncology market and provide some long-lost excitement for the pharma giant’s pipeline. They’re putting this BCMA program at the front of that charge — looking to lead a host of rivals all aimed at the same target.

We don’t know what the data are yet, but DREAMM-2 falls on the heels of a promising set of data delivered 5 months ago for DREAMM-1. There investigators noted that complete responses among treatment-resistant patients rose to 15% in the extra year’s worth of data to look over, with a median progression-free survival rate of 12 months, up from 7.9 months reported earlier. The median duration of response was 14.3 months.

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Brian Kaspar. AveXis via Twitter

AveX­is sci­en­tif­ic founder fires back at No­var­tis CEO Vas Narasimhan, 'cat­e­gor­i­cal­ly de­nies any wrong­do­ing'

Brian Kaspar’s head was among the first to roll at Novartis after company execs became aware of the fact that manipulated data had been included in its application for Zolgensma, now the world’s most expensive therapy.

But in his first public response, the scientific founder at AveXis — acquired by Novartis for $8.7 billion — is firing back. And he says that not only was he not involved in any wrongdoing, he’s ready to defend his name as needed.

I reached out to Brian Kaspar after Novartis put out word that he and his brother Allen had been axed in mid-May, two months after the company became aware of the allegations related to manipulated data. His response came back through his attorneys.

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Why would Am­gen want to buy Alex­ion? An­a­lysts call hot­ly ru­mored takeover un­like­ly, but seize the mo­ment

A rumor that Amgen is closing in on buyout deal for Alexion has sparked a guessing game on just what kind of M&A strategy Amgen is pursuing and how much Alexion is worth.

Mizuho analyst Salim Syed first lent credence to the report out of the Spanish news outlet Intereconomía, which said Amgen is bidding as much as $200 per share. While the source may be questionable, “the concept of this happening doesn’t sound too crazy to me,” he wrote.

FDA asks why No­var­tis took two months to launch for­mal in­ter­nal probe, af­ter AveX­is flagged da­ta ma­nip­u­la­tion

And the plot thickens. Novartis $NVS officials are reportedly now scrambling to explain to the FDA why it took them two months to open an internal investigation into data discrepancies for their $2.1 million gene-therapy for spinal muscular dystrophy — the world’s most expensive drug.

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Build­ing on suc­cess­ful PD-1 pact, Eli Lil­ly li­cens­es di­a­betes drug to Chi­nese part­ners at In­novent

Eli Lilly is expanding its partnership with China’s Innovent in a deal involving a diabetes drug sitting in its Phase I reserves.

The two companies had jointly developed one of China’s first homegrown PD-1 agents, scoring an approval for Tyvyt (sintilimab) late last year for relapsed/refractory classical Hodgkin’s lymphoma. This time around, Lilly is out-licensing a piece of its diabetes pipeline, a leading franchise that has historically produced the top-selling Trulicity and Humalog.

Am­gen, Al­ler­gan biosim­i­lar of Roche's block­buster Rit­ux­an clears an­oth­er US piv­otal study 

Novartis $NVS may have given up, but Amgen $AMGN and Allergan $AGN are plowing ahead with their knockoff of Roche’s blockbuster biologic Rituxan in the United States.

Their copycat, ABP 798, was found to have a clinically equivalent impact as Rituxan — meeting the main goal of the study involving CD20-positive B-cell non-Hodgkin’s lymphoma patients. This is the second trial supporting the profile of the biosimilar. In January, it came through with positive PK results in patients with rheumatoid arthritis.

UP­DAT­ED: An em­bold­ened As­traZeneca splurges $95M on a pri­or­i­ty re­view vouch­er. Where do they need the FDA to hus­tle up?

AstraZeneca is in a hurry.

We learned this morning that the pharma giant — not known as a big spender, until recently — forked over $95 million to get its hands on a priority review voucher from Sobi, otherwise known as Swedish Orphan Biovitrum.

That marks another step down on price for a PRV, which allows the holder to slash 4 months off of any FDA review time.

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