March certainly came in like a lion, between the actual snowstorms and flurry of legislative and regulatory activity in Washington. While much of the week’s coverage focused on political posturing around the GOP’s ACA replacement bill, President Trump met with Democrats on a decidedly more bipartisan proposal to address drug costs. And late Friday, POTUS finally put an end to months of speculation, officially nominating Dr. Scott Gottlieb to be FDA Commissioner, the one candidate who seemed to resonate with various stakeholders throughout the industry and on both sides of the aisle…
Read on for more in The Week That Was!
DRUG MAKERS & PBMs TAKE OFF THE GLOVES
The standoff between drug makers and pharmacy benefit managers (PBMs) continued this week when Gilead Executive VP Jim Meyers accused PBMs of driving drug prices up in for the purpose of negotiating higher fees in their contracts. Meyers said he’s “never met a PBM or a payer outside of the Medicaid segment that preferred a price of $50,000 over $75,000 and a rebate back to them.” In a letter to Gilead, Express Scripts rebutted, saying that Gilead only reduced the price [for its Hep C products] … once Express Scripts preferred another curative therapy.” Express Scripts added Gilead should lower the WAC price for its drugs to the discounted rate. In the meantime, patients seem to be the biggest losers in this battle, as coverage denials of Hep C drugs by commercial and government payers continue to rise.
Why can’t drug makers, PBMs, and payers figure out a way to work together to get patients the medicines they need? That’s what Regeneron CEO Len Schleifer asks in a recent STAT interview. Schleifer says “it’s always been a finger pointing, head banging type of negotiation. And I think it can be done in a somewhat of a data driven collaborative spirit.” Schleifer elaborated, “There’s a lot of friction in the system. Payers make it hard to get the drugs. The innovators feel they have to charge more money because they feel they’re not getting the [sales] volume,” adding, “I’d like to see responsible negotiation.”
What that means remains to be seen, but from a PR perspective, collaboration may be the only way these two beleaguered stakeholder groups improve public perception in an industry that joins oil and gas and the federal governments as the worst-rated U.S. business sectors.
GOTTLIEB GETS FDA NOD
On Friday, President Trump officially picked Dr. Scott Gottlieb as the new FDA commissioner. An internist, fellow at the American Enterprise Institute, and former deputy FDA commissioner, Gottlieb has been critical of the amount of regulation pharma cos face in bringing drugs to market. Items on Gottlieb’s agenda likely include shorter drug review timelines, a reformed approval process for complex generics and publicly available Complete Response Letters (CRLs) to outline the FDA’s reasoning for rejecting a drug. Although widely preferred over some of the more “disruptive” candidates considered for the role Gottlieb will have tough conflict questions during confirmation about his roles as an advisor to and investor in drug and device companies.
According to former Commissioners Drs. Robert Califf and Mark McClellan, streamlining processes and review timelines will only do so much to reduce costs and inefficiencies at the FDA. While acknowledging the agency is “far from perfect,” Califf cautioned against decisions that would politicize the science-based organization. McClellan mentioned a need for more staff and highlighted new regulatory and review challenges stemming from advancements in medical technology. McClellan and Califf acknowledged that innovations in medicine mean “changing the way we pay, and probably changing the way we regulate as well” by using “higher-quality evidence,” to inform all decisions related to products.
So what does all this mean for drug makers? Outcomes-based evidence—beyond finite clinical endpoints—will increase in importance both for drug approvals and formulary access. Califf and McClellan seem to suggest that an health-technology assessment-like (HTA) system may be on the horizon. These systems, commonly used in Europe assess the cost-effectiveness of medicines relative to outcomes. Dr. Califf said, “We can’t afford a system where we have one set of studies to get a product to market, and a whole different set of studies to get people to pay for the product.”
POTUS, POLICYMAKERS TALK DIRECT DRUG NEGOTIATION
While the GOP health billgrabbed major headlines, Washington also turned a little attention back to drug pricing this week when President Trump met with Democrats at the White House. According to Bloomberg Reps. Elijah Cummings (D-MD) and Peter Welch (D-VT) presented POTUS with a bill that would allow Medicare to negotiate drug prices with manufacturers—an approach opposed by new Health and Human Services Secretary Price while he was in Congress. However, direct negotiation has been a popular Trump talking point since he took office, and a Cummings statement noted that Trump “seemed enthusiastic about the idea.” On Sunday, Senator Cory Booker (D-NJ), one of 13 Democrats to vote against a resolution allowing for the importation of prescription medicines from Canada, pointed to specific concerns about that resolution, but reaffirmed his support for the underlying premise.
Not surprisingly, the issue of drug pricing has continued to be a flashpoint in conversations about healthcare reform. The popularity of reducing drug prices, combined with the national sentiment and calls for a “fair deal” by the president means there will be episodes in which the issue is highly visible. Policymakers with long-standing criticisms of the pharmaceutical industry are looking to highlight individual manufacturers they see as epitomizing the problems. Companies with products in especially sensitive categories, or those with drastically different US/ex-US pricing strategies, still need to build their value narratives early so that they can avoid being the latest example used by Congress — or the first one used by the POTUS.
That’s it for now—but with surprises like a nor’easter named Stella and Northwestern making the round of 64, we predict we’re all in for a week of absolute madness (March Madness, that is…)
Until next week,
– The Issues Management Practice @inVentiv Health PR