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

Biotech Voices is a collection of exclusive opinion editorials from some of the leading voices in biopharma on the biggest industry questions today. Think you have a voice that should be heard? Reach out to senior editors Kyle Blankenship and Amber Tong.

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. 

The DCT-OS: A Tech­nol­o­gy-first Op­er­at­ing Sys­tem - En­abling Clin­i­cal Tri­als

As technology-enabled clinical research becomes the new normal, an integrated decentralized clinical trial operating system can ensure quality, deliver consistency and improve the patient experience.

The increasing availability of COVID-19 vaccines has many of us looking forward to a time when everyday things return to a state of normal. Schools and teachers are returning to classrooms, offices and small businesses are reopening, and there’s a palpable sense of optimism that the often-awkward adjustments we’ve all made personally and professionally in the last year are behind us, never to return. In the world of clinical research, however, some pandemic-necessitated adjustments are proving to be more than emergency stopgap measures to ensure trial continuity — and numerous decentralized clinical trial (DCT) tools and methodologies employed within the last year are likely here to stay as part of biopharma’s new normal.

As­traZeneca caps PD-L1/CT­LA-4/chemo com­bo come­back with OS win. Is treme­li­mum­ab fi­nal­ly ready for ap­proval?

AstraZeneca’s closely-watched POSEIDON study continues to be the rare bright spot in its push for an in-house PD-L1/CTLA-4 combo.

Combining Imfinzi and tremelimumab with physicians’ choice of chemotherapy helped patients with stage IV non-small cell lung cancer live longer, the company reported — marking the first time the still-experimental tremelimumab has demonstrated an OS benefit.

For AstraZeneca and CEO Pascal Soriot, the positive readout — which is devoid of numbers — offers much-needed validation for the big bet they made on Imfinzi plus tremelimumab, after the PD-L1/CTLA-4 regimen failed multiple trials in head and neck cancer as well as lung cancer.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 104,800+ biopharma pros reading Endpoints daily — and it's free.

Ron DePinho (file photo)

A 'fly­over' biotech launch­es in Texas with four Ron De­Pin­ho-found­ed com­pa­nies un­der its belt

In his 13 years at Genzyme, Michael Wyzga noticed something about East Coast drugmakers. Execs would often jet from Boston or New York to San Francisco to find more assets, and completely miss the work being done in flyover states, like Texas or Wisconsin.

“If it doesn’t come out of MGH or MIT or Harvard, probably not that interesting,” he said of the mindset.

Now, he and some well-known industry players are looking to change that, and they’ve reeled in just over $38 million to do it.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 104,800+ biopharma pros reading Endpoints daily — and it's free.

Onno van de Stolpe, Galapagos CEO (Thierry Roge/Belga Mag/AFP via Getty Images)

Gala­pa­gos chops in­to their pipeline, drop­ping core fields and re­or­ga­niz­ing R&D as the BD team hunts for some­thing 'trans­for­ma­tive'

Just 5 months after Gilead gutted its rich partnership with Galapagos following a bitter setback at the FDA, the Belgian biotech is hunkering down and chopping the pipeline in an effort to conserve cash while their BD team pursues a mission to find a “transformative” deal for the company.

The filgotinib disaster didn’t warrant a mention as Galapagos laid out its Darwinian restructuring plans. Forced to make choices, the company is ditching its IPF molecule ’1205, while moving ahead with a Phase II IPF study for its chitinase inhibitor ’4617.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 104,800+ biopharma pros reading Endpoints daily — and it's free.

Stéphane Bancel, Getty

Mod­er­na CEO brush­es off US sup­port for IP waiv­er, eyes more than $19B in Covid-19 vac­cine sales in 2021

Moderna is definitively more concerned with keeping pace with Pfizer in the race to vaccinate the world against Covid-19 than it is with Wednesday’s decision from the Biden administration to back an intellectual property waiver that aims to increase vaccine supplies worldwide.

In its first quarter earnings call on Thursday, Moderna CEO Stéphane Bancel shrugged off any suggestion that the newly US-backed intellectual property waiver would impact his company’s vaccine or bottom line. Still, the company’s stock price fell by about 9% in early morning trading.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 104,800+ biopharma pros reading Endpoints daily — and it's free.

Ad­comm splits slight­ly in fa­vor of FDA ap­prov­ing Chemo­Cen­tryx’s rare dis­ease drug

The FDA’s Arthritis Advisory Committee on Thursday voted 10 for and 8 against the approval of ChemoCentryx’s $CCXI investigational drug avacopan as a treatment for adults with a rare and serious disease known as anti-neutrophil cytoplasmic autoantibody (ANCA)-vasculitis.

The vote on whether the FDA should approve the drug was preceded by a split vote of 9 to 9 on whether the efficacy data support approval, and 10 to 8 that the safety profile of avacopan is adequate enough to support approval.

Drug pric­ing watch­dog joins the cho­rus of crit­ics on Bio­gen's ad­u­canum­ab: What about charg­ing $2,560 per year?

As if Biogen’s aducanumab isn’t controversial enough, the researchers at drug pricing watchdog ICER have drawn up the contours of a new debate: If the therapy does get approved for Alzheimer’s by June, what price should it command?

Their answer: At most $8,290 per year — and perhaps as little as $2,560.

Even at the top of the range, the proposed price is a fraction of the $50,000 that Wall Street has reportedly come to expect (although RBC analyst Brian Abrahams puts the consensus figure at $11.5K). With critics, including experts on the FDA’s advisory committee, making their fierce opposition to aducanumab’s approval loud and clear, the pricing pressure adds one extra wrinkle Biogen CEO Michel Vounatsos doesn’t need as he orders full-steam preparation for a launch.

Biden ad­min­is­tra­tion backs a po­lar­iz­ing pro­pos­al to waive IP for all Covid-19 vac­cines

In a surprise U-turn, the Biden administration said Wednesday that it will support a proposal at the World Trade Organization to temporarily waive intellectual property protections on Covid-19 vaccines.

The proposal, backed by South Africa and India at the WTO, seeks to help developing countries with limited vaccine supplies. The US and Europe historically opposed the proposal, saying IP should be protected because it incentivizes new drug and vaccine development.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 104,800+ biopharma pros reading Endpoints daily — and it's free.

FDA ex­tends re­search agree­ment with MIT-li­censed or­gan-on-chip sys­tems

The FDA on Wednesday extended its four-year agreement with CN Bio, a developer of single- and multi-organ-on-chip systems used for drug discovery, for another three years.

CN Bio said the scope of the research performed by the FDA’s Center for Drug Evaluation and Research has expanded to include the exploration of the company’s lung-on-a-chip system to help with the agency’s evaluation of inhaled drugs, in addition to the agency’s work on its liver model.

Endpoints Premium

Premium subscription required

Unlock this article along with other benefits by subscribing to one of our paid plans.