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. 

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.

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Preliminary data on two patients with blood disorders that have been administered with Vertex and partner CRISPR Therapeutics’ gene-editing therapy suggest the technology is safe and effective, marking the first instance of the benefit of the use of CRISPR/Cas9 technology in humans suffering from disease.

Patients in these phase I/II studies give up peripheral blood from which hematopoietic stem and progenitor cells are isolated. The cells are tinkered with using CRISPR/Cas9 technology, and the edited cells — CTX001 — are infused back into the patient via a stem cell transplant. The objective of CTX001 is to fix the errant hemoglobin gene in patents with two blood disorders: beta-thalassemia and sickle cell disease, by unleashing the production of fetal hemoglobin.

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UP­DAT­ED: Make that 2 ap­proved RNAi drugs at Al­ny­lam af­ter the FDA of­fers a speedy OK on ul­tra-rare dis­ease drug

Seventeen years into the game, Alnylam’s pivot into commercial operations is picking up speed.
The bellwether biotech $ALNY has nabbed their second FDA OK for an RNAi drug, this time for givosiran, the only therapy now approved for acute hepatic porphyria. This second approval came months ahead of the February deadline — even after winning priority review following their ‘breakthrough’ title earlier.
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David Ricks. Eli Lilly

Eli Lil­ly touts $400M man­u­fac­tur­ing ex­pan­sion, 100 new jobs to much fan­fare in In­di­anapo­lis — even though it's been chop­ping staff

Eli Lilly is pouring in $400 million to beef up manufacturing facilities at its home base of Indianapolis. The investment, which was lauded by the city’s mayor, is expected to create 100 new jobs.

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Am­gen chops 172 more staffers in R&D, op­er­a­tions and sales amid neu­ro­science ex­it, rev­enue down­turn

Neuroscience wasn’t the only unit that’s being hit by a reorganization underway at Amgen. As well as axing 149 employees in its Cambridge office, the company has disclosed that 172 others nationwide, including some from its Thousand Oaks, CA headquarters, are being let go.

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Stephen Hahn (via Senate HELP Committee)

Stephen Hahn gets through Sen­ate’s soft­ball job in­ter­view — but most­ly plays dodge­ball on the is­sues fac­ing the FDA

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Op­di­vo/Yer­voy com­bo for melanoma fails in key pa­tient pop­u­la­tion

Bristol-Myers Squibb’s efforts to expand their checkpoint inhibitor combination have run into another recalcitrant cancer.

The NJ-based pharma announced that a combination of Yervoy and Opdivo didn’t beat out Opdivo alone in patients with resected high-risk melanoma who had very low levels of PD-L1. The drug combo couldn’t improve recurrence-free survival in these post-surgery patients.

Ver­tex's stel­lar quar­ter car­ries on with French re­im­burse­ment deal

Vertex’s golden quarter just got brighter. About a month after the US drugmaker finally clinched a deal with UK authorities to cover its slate of cystic fibrosis (CF) drugs following years of protracted negotiations, the company on Wednesday secured a deal with France for its CF therapy, Orkambi.

After the UK, France has one of the largest CF populations outside the United States. Achieving French reimbursement unlocks an ~7000-patient CF population, around ~2500-3000 of which will likely be eligible to receive (and be reimbursed for) Orkambi, Stifel’s Paul Matteis wrote in a note.

Nello Mainolfi, Kymera via Youtube

Kymera hands the helm to No­var­tis vet — and found­ing CSO — Nel­lo Main­olfi

Kymera Therapeutics is turning to a co-founder to run the company.
The protein degradation specialist with a deep-pocket syndicate behind them has opted to give the helm officially to Nello Mainolfi. The new CEO is a veteran of the Novartis Institutes for Biomedical Research. He joined Atlas Venture in their entrepreneur-in-residence program and helped launch Kymera as the CSO three years ago with Atlas’ Bruce Booth.
The boast at Kymera is that they’re angling to create a new class of protein degraders, a popular field where there’s been a variety of startups. One of its chief advocates is NIBR head Jay Bradner, who launched C4 just ahead of joining Novartis, where he’s also been doing new work in the field.