Trump ad­min­is­tra­tion pro­pos­es new rules that strip away many of the re­bate deals be­tween phar­ma and PBMs, push­ing dis­counts to con­sumers

Af­ter threat­en­ing for the past 2 years to do some­thing dra­mat­ic to change the steady up­ward tra­jec­to­ry of list drug prices and slash out-of-pock­et costs, the Trump ad­min­is­tra­tion has just fired a broad­side straight in­to one of the key dri­vers that has stoked pub­lic anger against the bio­phar­ma in­dus­try.

Alex Azar

HHS Sec­re­tary Alex Azar is­sued a re­lease Thurs­day evening say­ing that the gov­ern­ment will change the safe har­bor pro­vi­sions that al­low drug com­pa­nies to pay re­bates to the phar­ma­cy ben­e­fit man­agers that man­age their ther­a­peu­tics. That sys­tem of re­bates has con­tin­ued to shove up list prices while the rev­enue from drug port­fo­lios has flat­tened or in­creased at on­ly a frac­tion of what we’ve seen in pre­vi­ous years.

In­stead, the Trump ad­min­is­tra­tion is propos­ing that the safe har­bor pro­vi­sion will al­low drug com­pa­nies to hand dis­counts di­rect to con­sumers, so they get the di­rect ben­e­fit of the dis­counts that drug com­pa­nies had been pass­ing along to the PBMs like Ex­press Scripts. In place of the re­bates PBMs would earn a fixed price fee.

That should par­tic­u­lar­ly ad­van­tage se­niors on Medicare, said Azar. In fact, the an­ti-kick­back rules are aimed di­rect­ly at the pub­licly fund­ed health plans in the US, but the rules would like­ly spread in­to the pri­vate in­sur­ance mar­ket giv­en the mar­ket heft of Medicare and the Med­ic­aid plans that would be af­fect­ed. Al­so, if every­one knows what mem­bers of Medicare and Med­ic­aid are be­ing charged, then the whole opaque process around re­tail drug prices that’s ex­ist­ed for decades could pre­sum­ably be elim­i­nat­ed or ex­posed.

The dev­il, as al­ways in Wash­ing­ton DC, will be in the de­tails. Here’s the full de­scrip­tion of what the ad­min­is­tra­tion is propos­ing.

Re­bates have long been a thorn in the side of in­dus­try crit­ics, and in­creas­ing­ly the phar­ma com­pa­nies them­selves. These se­cret deals be­tween drug mak­ers and PBMs — which the gov­ern­ment says amount to 30% of drugs’ list price — are used to arrange fa­vor­able po­si­tions on the for­mu­la­ries used to steer mem­bers to par­tic­u­lar drugs. They al­so dic­tate the co-pays that are charged to mil­lions of mem­bers.

For the phar­ma in­dus­try, which has been the tar­get of grow­ing pub­lic anger, the move will be wel­comed as the at­ten­tion shifts to PBMs.

Stephen Ubl, PhRMA CEO

“We ap­plaud the Ad­min­is­tra­tion for tak­ing steps to re­form the re­bate sys­tem to low­er pa­tients’ out-of-pock­et costs,” not­ed PhRMA chief Stephen Ubl. “Our cur­rent health care sys­tem re­sults in pa­tients of­ten pay­ing cost-shar­ing based on the list price, re­gard­less of the dis­count their in­sur­er re­ceives. We need to en­sure that the $150 bil­lion in ne­go­ti­at­ed re­bates and dis­counts are used to low­er costs for pa­tients at the phar­ma­cy.”

“This pro­pos­al would al­so fix the mis­aligned in­cen­tives in the sys­tem that cur­rent­ly re­sult in in­sur­ers and phar­ma­cy ben­e­fit man­agers (PBMs) fa­vor­ing med­i­cines with high list prices.”

“This his­toric ac­tion, com­bined with oth­er ad­min­is­tra­tive and leg­isla­tive ef­forts on pre­scrip­tion drug pric­ing, is a ma­jor de­par­ture from a bro­ken sta­tus quo that serves spe­cial in­ter­ests and moves to­ward a new sys­tem that puts Amer­i­can pa­tients first,” Azar said in a state­ment. “De­moc­rats and Re­pub­li­cans look­ing to low­er pre­scrip­tion drug costs have crit­i­cized this opaque sys­tem for years, and they could pass our pro­pos­al in­to law im­me­di­ate­ly.”

Next up: Will both par­ties be able to set aside their dra­mat­ic dif­fer­ences and reach a bi­par­ti­san deal? How­ev­er this plays out, to­day’s pro­pos­al now takes cen­ter ring in the de­bate over drug prices.

There’s a lot more dis­cus­sion to come.

Im­age: Pres­i­dent Trump. Shut­ter­stock

George Scangos (L) and Marianne De Backer

Pi­o­neer­ing biotech icon George Scan­gos hands in his re­tire­ment pa­pers — and this time it’s for re­al

George Scangos, one of the all-time great biotech CEOs, says the time has come to turn over the reins one last time.

The 74-year-old biotech legend spent close to three decades in a CEO post. The first was at Exelixis — which is still heavily focused on a drug Scangos advanced in the clinic. The second “retirement” was at Biogen, where he and his team were credited with a big turnaround with the now fading MS blockbuster Tecfidera. And the third comes at Vir, where he traded in his Big Biotech credentials for a marquee founder’s role back on the West Coast, hammering out a Covid-19 alliance with Hal Barron — then R&D chief at GSK — and breaking new ground on infectious diseases with some high-powered venture players.

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The FDA hasn’t detected any potential safety signals, including for stroke, in people aged 65 years and older who have received Pfizer’s bivalent Covid booster, one senior official told members of the agency’s Vaccines and Related Biological Products Advisory Committee (VRBPAC) on Thursday.

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FDA cuts off use for As­traZeneca’s Covid-19 ther­a­py Evusheld

The FDA has stopped use of another drug as a result of the new coronavirus variants. On Thursday, the agency announced that AstraZeneca’s antibody combo Evusheld, which was an important prevention option for many immunocompromised people and others, is no longer authorized.

The FDA said it made its decision based on the fact that Evusheld works on fewer than 10% of circulating variants.

Evusheld was initially given emergency authorization at the end of 2021. However, as Omicron emerged, so did studies that showed Evusheld might not work against the dominant Omicron strain. In October, the FDA warned healthcare providers that Evusheld was useless against the Omicron subvariant BA.4.6. It followed that up with another announcement earlier this month that it did not think Evusheld would work against the latest Omicron subvariant XBB.1.5.

Jeanne Loring, director of the Center for Regenerative Medicine (Credit: Jamie Scott Lytle)

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Last July, Jeanne Loring stood on a dirt road surrounded by Florida swampland and watched as a nearby SpaceX rocket blasted into the sky. The payload included a very personal belonging: cell clusters mimicking parts of her brain.

For more than two decades, Loring has been at the forefront of a stem cell field that always seems on the brink of becoming the next thing in medicine, but has been slow to lift off.

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Regeneron has won a patent case against Swiss pharma giant Novartis over the delivery system for its eye drug Eylea.

The US Patent Trial and Appeal Board ruled that Novartis’ pre-filled syringe for injecting its eye medication Lucentis was “unpatentable” and handed the victory to Regeneron and its AMD drug Eylea.

In the initial complaint in 2020, Novartis alleged to the US International Trade Commission that certain pre-filled syringes for the intravitreal injection, and ultimately Regeneron’s delivery system for Eylea, were infringing on Novartis’ patent. Regeneron filed a petition to review Novartis’ claims in 2021.

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Mom influencers take center stage in its “Flu is a Family Affair” campaign to reach family decision-makers or “chief health officers.” GSK is asking them in the digital campaign to take care of themselves, and take the family along, when they go to the pharmacy or doctor’s office for a flu vaccine.

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Bristol Myers Squibb is looking to expand Breyanzi into more indications — and the pharma’s newest data readout makes progress on that front.

The Big Pharma put out word Thursday that the CAR-T cell therapy met the primary endpoint of complete response rate compared to historical control in a subset of patients with relapsed or refractory chronic lymphocytic leukemia (CLL) that were refractory to a BTK inhibitor and pretreated with a BCL-2 inhibitor.

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Torrent Pharma sent a letter to the National Stock Exchange of India earlier this week with word that the manufacturer has received a “communication from the FDA determining the inspection classification as ‘Official Action Indicated’ (OAI)” for one of its sites. An OAI classification from the FDA comes after the agency has completed an inspection and determines if the facility complies with the applicable laws and regulations. Being given an OAI classification means that regulatory or administrative actions will be recommended to Torrent. However, the details on the recommended actions have not been given.

In­vestor 'misalign­men­t' leads to tR­NA biotech's shut­ter­ing

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Similar to Flagship’s Alltrna and other upstarts like Takeda-backed hC Bioscience, the now-shuttered Theonys was attempting to go after transfer RNA, seen as a potential Swiss Army knife in the broader RNA therapeutics space. The idea is that one tRNA drug could be used across a galaxy of disorders and diseases.

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