Trump's 'sweep­ing ac­tion' to low­er drug prices mocked by an­a­lysts as re­lieved in­vestors trig­ger ral­ly in Big Phar­ma stocks

Pres­i­dent Don­ald Trump took to the bul­ly pul­pit to­day to steer a pack­age of pro­pos­als in­to ex­is­tence that he claimed is “the most sweep­ing ac­tion in his­to­ry to low­er the price of pre­scrip­tion drugs for the Amer­i­can peo­ple.”

But if that was his aim, his shot hit so far from the mark that it trig­gered a spike in Big Phar­ma stock prices as an­a­lysts dis­missed the ef­fort as a “non-event” cen­tered on some mar­gin­al pro­mo­tion­al is­sues that would be a “small price to pay” for avoid­ing tak­ing a hit on their con­trol of drug pric­ing.

Trump’s short speech — play­ing out against a back­drop of rev­e­la­tions that No­var­tis had paid his per­son­al at­tor­ney $1.2 mil­lion — con­tin­ued his prac­tice of ex­co­ri­at­ing drug lob­by­ists and spe­cial in­ter­ests. But it was long on rhetoric and short on tough moves. 

The pres­i­dent said his pro­pos­als would re­sult in “elim­i­nat­ing the mid­dle men; the mid­dle men be­came very, very rich,” even though their stocks al­so surged in the wake of Trump’s roll­out. And he vowed to take on spe­cial in­ter­ests while pre­vent­ing man­u­fac­tur­ers from ex­ploit­ing the coun­try’s patent sys­tem to guard block­buster ther­a­peu­tic fran­chis­es.

As promised, Trump ac­cused oth­er coun­tries of en­gi­neer­ing ar­ti­fi­cial­ly low drug prices, forc­ing Amer­i­cans to shoul­der the weight of “the enor­mous cost of re­search and de­vel­op­ment.” Trump al­so weighed in against so-called gag laws that pre­vent phar­ma­cists from point­ing con­sumers to low­er priced al­ter­na­tives to pre­scribed drugs.

In a quick fol­low-up, HHS Sec­re­tary Alex Azar raised one spe­cif­ic pro­pos­al that aimed at sham­ing phar­ma com­pa­nies by forc­ing them to in­clude the price of the drugs they pro­mot­ed in ad­ver­tis­ing.

While lob­by­ists may have come in for a tongue lash­ing, the in­dus­try has to be pleased that the ad­min­is­tra­tion is mak­ing no move to re­quire Medicare to ne­go­ti­ate low­er prices, or al­low for reim­por­ta­tion of drugs from those oth­er coun­tries with cheap­er prices. What we heard about to­day amount­ed to some tai­lor­ing and planned slim­ming — the ba­sic out­fit re­mains the same. And that fact helped trig­ger a broad ral­ly in Big Phar­ma stocks af­ter the speech wrapped.

HHS pro­vid­ed more specifics in a blue­print for ac­tion that it dis­trib­uted just be­fore the speech­es. The ac­tions in­clude —

  • Adding val­ue-based drug con­tract­ing, which the in­dus­try has al­ready ea­ger­ly signed off on as a need­ed com­pro­mise.
  • Chang­ing the for­mu­la­ry struc­ture used by Medicare Part D plans to al­low for a min­i­mum of one drug per cat­e­go­ry or class, rather than 2, to height­en com­pe­ti­tion and al­low some lever­ag­ing.
  • En­cour­ag­ing states to try new de­mo projects us­ing best prac­tices from pri­vate in­dus­try to low­er drug costs.
  • End­ing the 180-day gener­ic drug ex­clu­siv­i­ty pro­vi­sion as a tem­po­rary mea­sure to hold back dis­count com­pe­ti­tion.
  • Go­ing af­ter low for­eign drug prices be­gin­ning with an analy­sis of prices in coun­tries be­long­ing to the Or­gan­i­sa­tion for Eco­nom­ic Co-op­er­a­tion and De­vel­op­ment.
  • In­clud­ing new rules aimed at low­er­ing out-of-pock­et ex­pens­es.
  • Of­fer­ing thoughts on in­creas­ing the num­ber and ac­cess to biosim­i­lars, elim­i­nat­ing a process where “man­u­fac­tur­ers may seek to use shared sys­tem REMS to de­lay or block com­pe­ti­tion from gener­ic prod­ucts en­ter­ing the mar­ket.”
  • Giv­ing Part D plans more flex­i­bil­i­ty on adding cheap­er gener­ics to their for­mu­la­ries.
  • And in ad­di­tion to see­ing if the rules can be changed to re­quire phar­mas to pub­li­cize pric­ing, the gov­ern­ment has a plan to spot­light drugs which have not seen reg­u­lar price hikes as part of an at­tempt to shine a light on the cost of in­di­vid­ual ther­a­pies.

The pro­pos­als to­day are very much a work in progress, with the ad­min­is­tra­tion promis­ing to look at in­ter­change­abil­i­ty of biosim­i­lars with brand­ed drugs, an is­sue that has raised the hack­les of some drug man­u­fac­tur­ers whose fran­chise drugs face a com­pet­i­tive threat.

But while com­pa­nies are like­ly to ob­ject to var­i­ous de­tails in the plan, with con­sid­er­able lob­by­ing to come on the specifics, there are no big changes out­lined here that will do what Trump has been promis­ing to do for more than a year: slash drug prices.

In­vestors clear­ly didn’t see any pain in the pro­pos­als. The $NBI surged, along with shares of the big phar­mas like Eli Lil­ly (up 2%), Mer­ck (up 3%) and J&J (up 2%). So did the PBMs — $ES­RX — that took a hit from the pres­i­dent. The win­dow dress­ing to this speech may have in­di­cat­ed a time of mourn­ing, but the lights were on and the par­ty was un­der­way in­side.

Jef­feries called it “be­nign,” and a “non-event.”

Leerink didn’t see much earth shak­ing about it.

Over­all we con­cur with the ob­vi­ous Street sen­ti­ment that the pro­pos­als are much less dra­con­ian than feared, and with no re-im­por­ta­tion, no manda­to­ry trans­paren­cy of con­tracts, no guar­an­teed flow-through of re­bates, no patent term ab­bre­vi­a­tion or risks, then the lim­it­ed im­pact of greater price trans­paren­cy, which the in­dus­try will op­pose, seems a small price to pay if in­deed those pro­pos­als are im­ple­ment­ed.

Trump, mean­while, is stick­ing with his vow to bring drug prices in­to line the world over.

This is “just the be­gin­ning,” Trump con­clud­ed, promis­ing new leg­is­la­tion and more ac­tions that re­quired help from Con­gress.

“We’re go­ing to see those prices come down,” he said. “It will be a beau­ti­ful thing.”


Im­ages: Pres­i­dent Don­ald Trump and Health and Hu­man Ser­vices Sec­re­tary Alex Azar. WHITE HOUSE via YOUTUBE

How to cap­i­talise on a lean launch

For start-up biotechnology companies and resource stretched pharmaceutical organisations, launching a novel product can be challenging. Lean teams can make setting a launch strategy and achieving your commercial goals seem like a colossal undertaking, but can these barriers be transformed into opportunities that work to your brand’s advantage?
We spoke to Managing Consultant Frances Hendry to find out how Blue Latitude Health partnered with a fledgling subsidiary of a pharmaceutical organisation to launch an innovative product in a
complex market.
What does the launch environment look like for this product?
FH: We started working on the product at Phase II and now we’re going into Phase III trials. There is a significant unmet need in this disease area, and everyone is excited about the launch. However, the organisation is still evolving and the team is quite small – naturally this causes a little turbulence.

Rev­o­lu­tion Med shoots for $100M+ IPO — and di­vulges some se­crets about that Warp Dri­ve buy­out

Biotech investors who like to wager on the race to the front of the KRAS market now have a new team to consider.

Revolution Medicines, which extended its reach on RAS with a deal to acquire Warp Drive Bio about 18 months ago, filed their S-1 in search of $100 million-plus. And they gave up a few secrets in the process.

The main clinical claim to fame that Revolution has centers on the SHP2 inhibitor RMC-4630, partnered with Sanofi back in the summer of 2018 — just after John Reed was named the incoming R&D chief. We already knew that the pharma giant handed over $50 million in cash plus a commitment of hundreds of millions more to align itself with Revolution as it makes a fresh foray into oncology. Now we know that Sanofi is also footing 80% of Revolution’s R&D bill on the program, while setting up a smorgasbord of $235 million in development milestones and $285 million in commercial bonuses.

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Turn­ing the cor­ner on treat­ing the root cause of sick­le cell dis­ease

Early in my career, as a medical resident, I saw first-hand the enormous challenges faced by children and adults with sickle cell disease (SCD), a genetic blood disorder that historically has lacked adequate treatment options. People living with this life-long disease are mainly those with ancestors from sub-Saharan Africa, as well as people of Hispanic, South Asian, Southern European and Middle Eastern descent. These patients suffer from devastating physical symptoms, including progressive, eventually fatal, organ damage and excruciating pain. In addition, they encounter emotional, mental and social burdens – non-physical aspects of living with SCD that also take a serious toll on patients and their caregivers.

Olivier Brandicourt, AP Images

#JPM20 ex­clu­sive: Olivi­er Brandi­court fol­lows the Big Phar­ma CEO path to pri­vate eq­ui­ty, join­ing Black­stone ahead of a mam­moth fund de­but

Nick Galakatos Blackstone

Seven months after Olivier Brandicourt’s surprise “early retirement” from Sanofi, he’s back in the game, this time taking meetings at JP Morgan to discuss his new role at Blackstone, where he’s quietly begun work with Nick Galakatos and the life sciences crew.

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Video Re­play: End­points at #JPM20 — news­mak­ers on deal­mak­ing, pric­ing and man­u­fac­tur­ing

On Monday, we held our fourth annual #JPM event — and the team hit a key milestone that I’d like to share with the entire Endpoints News audience: We live-streamed the conversation and had nearly triple the number of executives watching online than we had in the sold-out crowd of 320.

For a media company on a mission to connect the biopharma world in bigger and better ways, we’re proud of how we were able to extend the reach of our franchise event. Paid subscribers were given access to the stream in real time, and now, two days later, we’re opening it up to everyone in this post.

Endpoints@JPM: (left to right) Steve Pearson, Nick Leschly, Bari Talente, Stephen Ubl, John Carroll

#JPM20: 'The NPV is al­ways wrong.' Take­da preps an­oth­er spin­out — this time on psych

Editor’s Note: Endpoints News is reporting live from #JPM20 after kicking things off with an action-packed event, which you can replay here. What follows is a stream of tidbits we have collected while wandering around Union Square in San Francisco. Check back in throughout the week for updates by John Carroll and Jason Mast.

SAN FRANCISCO — A year ago Takeda CEO Christophe Weber and R&D chief Andy Plump arrived at JP Morgan right on the heels of closing their big Shire buyout. Now they’re back after shaking up the portfolio, boosting R&D spending by about 50% to $4.5 billion and adjusting the pipeline — a task which isn’t quite finished yet.

Nick Leschly at Endpoints News' panel at the 2020 JP Morgan Healthcare Conference. Credit: Jeff Rumans

At #JPM20, two CEOs, two rad­i­cal­ly dif­fer­ent ther­a­pies, and a fight to chase down sick­le cell

SAN FRANCISCO – Few CEOs tell a story better than bluebird’s Nick Leschly.

He cuts a Jeff Bezos figure on stage at the Colonial Room, the JP Morgan presentation hall for A-list biotechs: lean and bald, fast-talking and vest-wearing. He explains in simple language, apologizing when he has to brush on the data. It helps that he has a good story to tell.

“We treated them one time,” Leschly tells a packed crowd, gesturing to the slide behind him. “Look what happened.”

The slide shows 9 horizontal bars studded with diamonds. Each bar, he explained, represented a sickle cell patient, and each diamond represented a severe medical event, such as a pain crisis. The diamonds stud one side – before the therapy – and vanish on the other, afterward.

“A 99% reduction in these events — this is a functional cure for sickle cell disease,” Leschly says. “This is unprecedented data.”

Upstairs and an hour later, Ted Love stands before a narrow conference room in his suit and polka-dot tie. Love, the CEO of Global Blood Therapeutics, is a 60-year-old physician. His voice trails off at the end of sentences, and the story he tells is less compelling. There are no cured patients.

“This is the first drug that addresses the root cause of sickle cell disease,” Love says, speaking in front of a slide showing a white pill bottle for GBT’s new drug Oxbryta. “Right in the label, it says that this drug inhibits polymerization.”

In the 60 years after scientists discovered the cause of sickle cell, almost no treatments emerged, even as the condition debilitated hundreds of thousands of Americans, most of them black or Hispanic. But the last few years have seen a resurgence of interest as new technologies have made the disease seem newly beatable.

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Neon Ther­a­peu­tics makes one last re­treat, sell­ing it­self cheap in a bar­gain base­ment M&A deal

Crushed by weak data for what had been their lead drug, Neon Therapeutics is being bought for parts this morning.

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Mark Pruzanski

#JPM20: Af­ter a year of NASH col­laps­es, all eyes on two biotechs

SAN FRANCISCO – It’s not quite Dewey defeats Truman, but Goldman Sachs calling 2019 “The Year of NASH” may well go down in the annals of worst biotech predictions.

Goldman Sachs slapped the label on weeks before 2019’s JP Morgan conference, projecting that long-discussed treatments for the obesity-driven condition suspected to lurk in millions of Americans would begin to bear fruit and investors would move accordingly. That did not quite happen.

“If you look at 2019, it was just a string of disappointing news,” Pascal Prigent, CEO of NASH-focused biotech Genfit, told Endpoints News in an interview.

The Year of NASH, or nonalcoholic steatohepatitis, became a year of NASH failures. Gilead failed two large Phase III trials. CymaBay went from a $1 billion company to a $100 million company after they found their drug was killing patients’ liver cells. Cirius withdrew an $86 million IPO bid after a disastrous readout. Industry-wide, there were few acqusitions in a market often projected to be worth $35 billion.

Gilead, after dominating the NASH discussion at the 2019 JPM, gave one quick mention to the program in their 2020 presentation before pivoting to other drugs.

“As promising as some of the mechanisms looked in earlier stages, when push comes to shove in large study settings, they just haven’t proven out,” Mark Pruzanski, CEO of the NASH-focused biotech Intercept, told Endpoints in an interview.

As biotech turns from 2019, the failures have refocused eyes away from Gilead and back toward two startups, both facing key events in the coming months: Intercept, which first alerted investors to NASH at JPM 2014, and the France-based Genfit.

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