Grab your foam fingers and jerseys, people: it’s The Week That Was Super Bowl edition!
Check out these stories taking the field this week:
Read on for more news and bad sports metaphors, in The Week That Was!
4th & LONG: PHARMA GOES FOR IT ON PRICING BATTLE
The biggest news this week may not be the Patriots-Falcons battle, but rather the meeting between President Trump and pharmaceutical industry leaders. Based on recent remarks (President Trump said the industry was “getting away with murder”), one might’ve expected the POTUS vs. pharma exchange to be contentious. But, it appears that the sides found some common ground. While this will inevitably be a long season between pharma and policymakers, we expect the rivalry to get even more interesting when POTUS fills a few key holes in his roster: HHS Secretary and FDA Commissioner. Trump laid out his demands for industry, including increased domestic manufacturing, lower drug prices for Medicare and Medicaid, and changing the paradigm of foreign countries “freeloading”on U.S. innovation. In post-meeting interviews, Eli Lilly’s CEO David Ricks hinted the industry will seek market-based solutions and competitive domestic tax rates to incentivize building new U.S. manufacturing sites. PhRMA’s CEO Steve Ubl supported private sector negotiation for better deals and emphasized reform will create “up to 350,000 new jobs over the next 10 years.”
Providing color commentary from the sidelines, Aetna’s CEO Mark Bertolini said drug costs and double digit price increases—driven largely by specialty drugs—must be addressed “sooner rather than later” if we desire more affordable premiums. Sen. Bernie Sanders chimed in, saying he’s ready to work across party lines to bring down drug prices if President Trump is “serious” about doing so. Sanders and Rep. Elijah Cummings are drafting legislation aimed at lowering drug costs through drug importation and by allowing Medicare to negotiate with drug makers.
Biopharma execs should’ve breathed a sigh of relief last week when the POTUS discussed competitive market solutions to bring down drug costs instead of the direct negation of prices with Medicare – a threat he made during the campaign. In the meantime, President Trump is taking aim at reducing regulations and expediting access to new therapies via Executive Order, a move that may have prompted agency officials to dial back expected HHS guidance on drug discounts under the 340B program. While it’s unlikely the Executive Order will have any profound impact on the way HHS and FDA do business, it’s an opening play that sets the tone for a much more activist Executive Branch when it comes to the day-to-day operations of federal agencies. The net/net: this week’s head-to-head match-up may have been a game-changer in shifting POTUS’ perception of pharma to an industry driving innovation, creating jobs, and improving patient access to groundbreaking medicines.
TWEETER-IN-CHIEF’S BIGGEST FANS: ROBOTS
To trade or not to trade based on President Trump’s tweets? That seems to be the game-time decision for investors, who’ve been glued to Trump’s feed. But the scouts that are paying closest attention to Trump’s Twitter output may actually be of the robotic kind. One of the newest players on the scene is the “Trump and Dump bot,” a computer program automated to short stocks within seconds of a Trump tweet it analyzes as “negative.” The bot uses artificial intelligence to identify company mentions and its algorithm instantly analyzes the sentiment. Company mentions likely to trigger a stock price decline are shorted immediately. Publicly traded companies beware!
Beware IR and communications folks everywhere: social listening “bots” are becoming increasingly common and the market reacts quickly, even to fake or inaccurate news. How do you battle the bots? Be prepared to react immediately: issue and tweet a statement ASAP to correct inaccuracies, and aggressively engage in the media cycle to get your POV heard. A best practice was Boeing’s tiff with Trump over the cost of Air Force One contracts. Then-President-Elect tweeted Boeing’s costs are “out of control, more than $4 billion. Cancel order!” With a quick and direct response to correct the inaccurate $4 billion price tag, Boeing regained the initial $2/share drop by the end of the day.
PERSONAL FOUL: INSULIN MAKERS SUED FOR CONSPIRACY
Battling months of accusations of unsportsmanlike conduct, drug makers faced another blow this week, as a class-action lawsuit was filed against Sanofi, Novo Nordisk and Eli Lilly alleging an insulin price-fixing conspiracy. The suit claims the pharma companies exploited the drug pricing system in a way that benefits themselves and pharmacy benefit managers (PBMs) by raising the “benchmark” prices on their insulin products. The legal counsel in the suit said patients were “practically imprisoned under the price hikes,” which totaled more than 150% over five years. Patients struggling to afford their medicines (which can sometimes cost almost $900 a month) allegedly resorted to extreme measures such as “under-dosing,” taking expired insulin and intentionally developing diabetic ketoacidosis to obtain free insulin samples from hospital ERs.
Before pharma takes another penalty, we think they should ask the refs to review the play. While pharma gets blamed for unnecessary roughness, PBMs seem to be able to raise premiums and cost-sharing requirements with impunity. Why do drug makers get the blame? Some argue it’s because pharma publishes the list prices. Or, as Brian Henry of Express Scripts said, “Rebates don’t raise drug prices, drug makers raise drug prices.” A recent study from the Berkeley Research Group shed light on the pharmaceutical supply chain, finding a substantial increase in the discounts PBMs and health plans have been negotiating with drug makers recently. But are patients seeing the savings? Not so much. The argument of blaming PBMs for drug costs is gaining some traction, but drug makers must tread lightly on this point. Most Americans don’t understand the supply chain and our research shows that explanations by drug makers about PBMs’ involvement in pricing are seen as “shifting the blame.”
REVISING THE PLAYBOOK: ICER’S NEW FRAMEWORK
This week, the Institute for Clinical and Economic Review announced proposed updates to its value assessment framework. ICER President Steve Pearson said the proposed changes “seek to improve the ability of the ICER value framework to achieve one goal: to help inform collaborative dialogue and policies that will ensure sustainable access to high-value care for all patients.” The proposals are open for public comment until April 3rd. Notable changes include: 1) broadening the range of cost-effectiveness thresholds to assess a drug’s long-term value; 2) using estimated net pricing instead of wholesale acquisition costs in its analyses; and 3) updates to make models “as transparent as possible,” including a longer timeline for report development to provide more opportunity for stakeholder engagement.
ICER watched “the tapes” and is preparing a new offensive strategy when meeting opponents on the field. The “experiment” ICER started is now becoming the de-facto arbiter of whether medicines are cost-effective. Rather than continuing to play defense by protesting ICER’s lack of transparency, manufacturers need an offensive strategy of their own, addressing value head-on in product narratives, stakeholder interactions, and the media. In the absence of accurate information, ICER will fill the void. ICER is moving full-speed ahead with category reviews, which increasingly evaluate drugs pre-launch. If you have questions on ICER or have a medicine undergoing a review, inVentiv’s Issues team can help. Our Value Frameworks offering helps you navigate the review, translate HEOR data into stakeholder-friendly responses, and prepare for media milestones.
That’s it for this week. We’re going to eat some cold pizza and re-watch those halftime commercials on YouTube. If you missed us last week, catch up on previous issues of The Week That Was by clicking here.
Until next week,
Your friends at the The Issues Management Practice @inVentiv Health PR