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

Once fu­ri­ous over No­var­tis’ da­ta ma­nip­u­la­tion scan­dal, the FDA now says it’s noth­ing they need to take ac­tion on

Back in the BP era — Before Pandemic — the FDA ripped Novartis for its decision to keep the agency in the dark about manipulated data used in its application for Zolgensma while its marketing application for the gene therapy was under review.

Civil and criminal sanctions were being discussed, the agency noted in a rare broadside at one of the world’s largest pharma companies. Notable lawmakers cheered the angry regulators on, urging the FDA to make an example of Novartis, which fielded Zolgensma at $2.1 million — the current record for a one-off therapy.

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Covid-19 roundup: GSK, Am­gen tai­lor R&D work to fit the coro­n­avirus age; Doud­na's ge­nomics crew launch­es di­ag­nos­tic lab

You can add Amgen and GSK to the list of deep-pocket drug R&D players who are tailoring their pipeline work to fit a new age of coronavirus.

Following in the footsteps of a lineup of big players like Eli Lilly — which has suspended patient recruitment for drug studies — Amgen and GSK have opted to take a more tailored approach. Amgen is intent on circling the wagons around key studies that are already fully enrolled, and GSK has the red light on new studies while the pandemic plays out.

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In a stun­ning set­back, Amarin los­es big patent fight over Vas­cepa IP. And its high-fly­ing stock crash­es to earth

Amarin’s shares $AMRN were blitzed Monday evening, losing billions in value as reports spread that the company had lost its high-profile effort to keep its Vascepa patents protected from generic drugmakers.

Amarin had been fighting to keep key patents under lock and key — and away from generic rivals — for another 10 years, but District Court Judge Miranda Du in Las Vegas ruled against the biotech. She ruled that:
(A)ll the Asserted Claims are invalid as obvious under 35 U.S.C.§ 103. Thus, the Court finds in favor of Defendants on Plaintiff’s remaining infringementclaim, and in their favor on their counterclaims asserting the invalidity of the AssertedClaims under 35 U.S.C. § 103.

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Covid-19 roundup: J&J, BAR­DA set ear­ly 2021 fin­ish line for $1B vac­cine race; FDA al­lows emer­gency drug use, ahead of piv­otal da­ta

J&J has zeroed in on a Covid-19 vaccine candidate that it hopes to begin testing in humans by September this year — with the extraordinary goal of getting it ready for emergency use in early 2021. And together with BARDA, it’s committing $1 billion to make it happen.

That kind of accelerated timeline would fall on the fast side of NIAID director Anthony Fauci’s well-publicized prediction that it would be another 12 to 18 months before a vaccine can be available for public use. A Phase I trial of Moderna’s mRNA vaccine began two weeks ago, and both the biotech and fellow mRNA player CureVac have discussed similar, if not even faster, timelines for emergency use among healthcare workers.

Mene Pangalos via YouTube

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If the FDA can still hold up its end of the bargain, AstraZeneca is already on a short path to scooping up a cutting-edge win with a likely approval for their SGLT2 drug Farxiga in cutting the risk of heart failure. Now the pharma giant says it can point to solid evidence that the drug — initially restricted to diabetes — also works for chronic kidney disease, potentially adding a blockbuster indication for the franchise.

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It is 'kind of a proven tech­nol­o­gy': Hep B vac­cine mak­er joins glob­al hunt for coro­n­avirus vac­cine

Using lab-grown proteins that are engineered to mimic the architecture of viruses to induce an immune response, VBI Vaccines is joining the hunt for a coronavirus vaccine — harnessing technology that has initially been proved safe in early trials as a prophylactic for cytomegalovirus (CMV) infection.

Unlike the raft of the companies in the Covid-19 vaccine race — including Moderna, CureVac and J&J — VBI is taking a pan-coronavirus approach, by developing a vaccine that will encompass Covid-19, severe acute respiratory syndrome (SARS), and Middle East respiratory syndrome (MERS).

Can a pair of top AveX­is alum­ni steer a new gene ther­a­py up­start to R&D glo­ry? 3 VCs bet $60M on it

VCs love few things more than a proven executive team when it comes to launching a new company. And now a group of A-listers has turned to a pair of top execs out of AveXis to steer the latest gene therapy player into the clinic.

The biotech is Waltham, MA-based Affinia and the two execs are Sean Nolan and Rick Modi — the former CEO and CBO respectively of AveXis, the gene therapy pioneer that fetched $8.7 billion in a sale to Novartis. Nolan has now taken the chairman’s role at Affinia while Modi moves up to the CEO post at the company.

Un­de­terred by a pan­dem­ic, Gilde Health­care rais­es their largest fund yet

When Pieter van der Meer started raising the capital for Gilde Healthcare’s fifth fund in the waning months of 2019, he had his eyes on a different chain of events that could change the healthcare system and perhaps even play to his firm’s advantage: The US presidential election.

Since raising their third fund in 2011, the 34-year-old Dutch firm had focused on value-based care. They chose late-stage biotechs that came up with new devices and delivery systems for de-risked established compounds, and when they chose preclinical biotechs, they spoke with potential pharma partners, payers and regulators to ask where and at what prices the drug made sense. As the Democratic primary became a contest over how to lower healthcare costs, it looked like a strategy that could pay off.

Daniel O'Day (AP Images)

Gilead CEO Dan O'­Day of­fers a de­tailed ex­pla­na­tion on remde­sivir ac­cess — re­as­sur­ing an­a­lysts that Covid-19 da­ta are com­ing fast

After coming under heavy fire from consumer groups ready to pummel them for grabbing the FDA’s orphan status for remdesivir — reserved to encourage the development of rare disease therapies — Gilead CEO Daniel O’Day had some explaining to do about the company’s approach to providing access to this drug to patients suffering from Covid-19. And he set aside time over the weekend to patiently explain how they are making their potential pandemic drug available in a new program — one he feels can better be used to address a growing pack of infected patients desperately seeking remdesivir under compassionate use provisions.

In addition to trying to reassure patients that they will once again have an avenue to pursue access, O’Day also reassured some analysts who had been fretting that China’s quick comeback from the coronavirus outbreak could derail its ultra-fast schedule for testing the drug in patients. The data are still expected in a few weeks, he says in the letter, putting the readout in April.

O’Day emphasizes that Gilead intends to pursue a pricing approach that will make this drug widely available — if it proves effective and safe. But no one is quite sure just what the longterm value would be, given the work being done on a variety of vaccines that may be rolled out as early as this fall — at least to the most heavily threatened groups.

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