Comments roll in on Trump’s drug pricing plan

07/16/2018 12:00 PM EDT

GROUPS FLOOD COMMENT BOX ON TRUMP DRUG PRICE PLAN —The comment period closes today on the plan that President Donald Trump announced two months ago as “the most sweeping effort” in history to lower drug prices. And with the clock ticking, some 2,000 comments had been submitted as of Friday.

The "blueprint," which offers a wide range of ideas for lowering drug costs, drew hundreds of stock replies. Many from independent pharmacists charged that pharmacy benefit managers’ low reimbursements for medicines are putting their businesses in danger.

PBMs are urging the government not to touch the rebate system, which they say is essential to brokering lower prices. In a report released this morning, the Pharmaceutical Care Management Association says rebates paid to the middlemen have saved nearly $35 billion for Medicare Part D programs since 2014. But the industry may be in for a fight: HHS Secretary Alex Azar has repeatedly signaled that changing the rebate system — or even getting rid of it — is high on his agenda.

Instead of messing with rebates, Express Scripts is urging the government to let public programs like Medicare follow commercial markets’ lead. Spokesperson Phil Blando told POLITICO the PBM giant will submit comments recommending more value-based pricing agreements, flexibility on formularies’ drug coverage and increased generic approvals.

Value-based pricing may be one part of the blueprint the wider industry can agree on, Matt Eyles, president and CEO of AHIP, said in a roundtable with journalists last week. Industry outsiders like the Pew Charitable Trusts' Allan Coukell are more skeptical that strategies like tying a drug's ultimate cost to its performance will really lower prices.

Industry groups have a range of reasons to be nervous about what the administration will wind up doing. PhRMA has significant concerns about how the possibility of giving Medicare Part B flexibility to negotiate drug prices could affect patient costs and access to medicines, spokesperson Holly Campbell said, giving a preview of some of the comments the lobby is submitting today.

Other groups getting ahead of the last-minute comment onslaught include the Coalition for Affordable Prescription Drugs and the Campaign for Sustainable Rx Pricing.

What’s next: Once the comments are in, the expectation builds for HHS and the White House to do something — even though there is no official deadline. With lots of talk but little action so far, we'll be watching to see if the administration can make good on Trump's promise to lower drug prices and which initiatives rise to the top of the heap. Be on the lookout for proposed rules or other ways the administration could formally implement its plans.

And ICYMI Friday, new details emerged on Novartis‘ relationship with Trump’s personal lawyer Michael Cohen, including how the drug company may have tried to shape the drug pricing agenda. Read more here.

Happy Monday and welcome back to Prescription PULSE, where we’re thinking of taking a summer jaunt to China to see "Dying to Survive." The film chronicles the experiences of a Chinese man who smuggled generic cancer medications into the country from India to help patients who couldn’t afford drugs. Send your summer movie recommendations and pharma news tips to the new Prescription PULSE partnership: Sarah Karlin-Smith at skarlin-smith@politico.com and @sarahkarlin and Sarah Owermohle at sowermohle@politico.com and @owermohle.

FDA, CMS AND OPIOIDS AT THE POLITICO PRO SUMMIT — Join Prescription PULSE co-author Sarah Karlin-Smith for a conversation with FDA Commissioner Scott Gottlieb at the POLITICO Pro Summit Tuesday morning. And stick around for a panel on the opioid epidemic and an interview with CMS Administrator Seema Verma. Click here for more information, including how to watch online.

CBO: CMS’ LATEST DRUG COST MOVE WOULD YIELD MEAGER SAVINGS — A new CMS proposal to reimburse doctors 3 percent less for physician administered drugs during their first few months on the market is being touted as part of the administration’s efforts to lower drug costs. But the proposal doesn’t directly touch what drug companies charge for their products. And while it would save the government and some patients money on co-pays, the savings are meager, considering Medicare’s total drug bill — $174 billion in 2016. The idea is projected to save taxpayers $152 million over 10 years, according to a CBO score of the idea. CMS did not provide its own estimate, saying it can’t meaningfully speculate because it’s unclear what new drugs will be brought to market or how much they will cost. Pros can read more about the proposal here.

… While another proposed rule could increase government spending on drugs: CMS proposed last week to increase payment for new renal dialysis drugs for the first two years they are on the market, by allowing all new medicines in the category to be paid for outside the dialysis bundle early on. Few new medicines now qualify for special payment outside the bundle. The change would likely increase Medicare dialysis spending — and raise patient co-pays — but CMS doesn’t estimate the extra cost, Rick Weissenstein of Cowen Washington Research group wrote in a note. To help offset some additional spending, CMS would reimburse for these new drugs at the average sales price, rather than the current average sales price plus 6 percent.

WHAT TRUMP'S SCOTUS PICK COULD MEAN FOR FDA — Brett Kavanaugh, Trump’s nominee to replace Anthony Kennedy on the Supreme Court, could have a hand in shaping FDA and drug law if confirmed by the Senate. One area to watch will be decisions on free speech, particularly as it affects corporations.

"A lot of what FDA does is require people to speak in certain ways," said Howard Sklamberg a partner at Akin Gump and former deputy commissioner at FDA. This includes everything from mandating drug companies to put safety warnings on medicines, to determining whether a food product can be marketed with certain words like “fresh” and how tobacco products are labeled. “A lot of that gets into a balance between a person’s right not to have their speech compelled versus the government’s interest in making sure consumers and patients have information about products,” Sklamberg said. “If there’s a court with a strong commercial speech majority, that could have a big effect on FDA’s regulation of these areas,” he said. “Justice Kennedy was generally a very strong commercial speech advocate, so the question will be whether Kavanaugh has the same positions as Kennedy and it’s a wash, which many people think, or if Kavanaugh is a little bit more on the regulator side as opposed to the commercial side.”

FDA’s regulation of off-label promotion of drugs is likely to end up before the high court “in the not too distant future,” Sklambeg predicted, and court rulings on this topic could dramatically shape FDA’s entire drug approval regime.

Legal experts emphasized that Kavanaugh’s imprint on the agency may be different than on other parts of the federal government, because so many FDA decisions are scientific in nature and require a great degree of expertise.

“We know two things generally from Judge Kavanaugh's statements during confirmation [for the D.C. Circuit Court of Appeals] and from his rulings. First, he is likely to be a notably pro-business judge. Second, he is likely to support a current and growing movement in the federal judiciary to give less deference to agency rulemaking and enforcement,” said Sam Halabi, a law professor at University of Missouri.

But even justices that tend to give less deference to federal agencies still typically defer to defer to FDA when those decisions are scientific, said Chad Landmon, who chairs Axinn's Intellectual Property and Food and Drug Administration practice.

“FDA decisions are more difficult for pro-business, agency-skeptical judges than those from SEC, FTC, and CFPB, which often just involve money,” Halabi explained pointing to a Kavanaugh decision in a D.C. Circuit case pitting FDA against a medical device company. In that case, Cytori Therapetuics Inc. v. FDA, “Judge Kavanaugh noted that ‘A court is ill-equipped to second-guess that kind of agency scientific judgment,’ so when it comes to matters of safety and efficacy of drugs and devices, my guess is that Judge Kavanaugh will be more deferential than for other agency determinations,” Halabi said.

Halabi also said it would be worth keeping an eye on drug law issues that state legislatures have been working on, such as pricing transparency and opioid regulations — “matters that touch and concern federal regulation especially by FDA ... I’d expect a federalism case to hit the Supreme Court soon,” he said.

GENERIC DRUG MAKERS DROP LOW-PROFIT PRODUCTS — Generic drug companies are feeling the heat as more competitors hit the market, leading some of the biggest to pull the plug on low-margin products.

While beleaguered Teva Pharmaceuticals has shut down facilities, sold units and discussed shifting strategies in the face of sliding profits, rival Mylan — headed by Heather Bresch, daughter of Sen. Joe Manchin (D-W.Va.) — has discontinued 54 product lines so far this year compared to just 15 by Teva.

Both companies, along with Novartis’ generics unit Sandoz, have ramped up discontinuations this year compared to last, according to an analysis of FDA notices by Evercore ISI's Umer Raffat.

** A message from the Pharmaceutical Care Management Association (PCMA): A recent Medicare Part D report by HHS’ Office of Inspector Generaldebunks the myth that drug makers raise prices because of the discounts and rebates they negotiate with health plans and PBMs. **

STEM CELL COMPANY LOOKING TO USE RIGHT-TO-TRY — Creative Medical Technologies, a biotech focusing on stem cell treatments, is looking to offer its experimental treatment AmnioStem to cancer patients once Phase I clinical trials are complete. The company “will be well positioned to allow access to end stage cancer patients under the Right-to-Try law,” Chief Scientific Officer Thomas Ichim said in a statement. It’s testing AmnioStem to treat cancer-associated wasting, or cachexia. If the product turns out to be successful, CEO Timothy Warrington said it could buy cancer patients time to wait for new therapies to become available.

The company didn’t respond to requests for more information on how it would implement its program, such as how if it would be able to afford to help all patients who request the treatment or whether and how much it would charge. But it will be interesting to watch how this company — or any biotech — navigates the new law S. 204 (115), which lets patients skirt the FDA when requesting access to experimental medicines.

Those very issues tripped up BrainStorm Cell Therapeutics last month. The company said it had plans to provide its experimental ALS treatment through Right-to-Try, before backtracking. Due to funding concerns, it said it wouldn’t be able to accommodate all patients who would want the treatment. The company's update followed a Bloomberg report that indicated BrainStorm might seek to profit from providing the experimental treatment. The new law, like the FDA's current compassionate use program, limits companies largely to charging patients for direct costs like materials or shipping.

PHARMA IN THE STATES

Drug Pricing Super PAC Targets Former Pharma CEO— Former Celgene CEO and current New Jersey Senate candidate Bob Hugin is the target of Patients for Affordable Action’s new $1.5 million ad campaign. The Republican nominee, who stepped down as CEO of the New Jersey-based drugmaker earlier this year but remains as board chairman, is accused of “doubling the price” of Celgene’s cancer therapies in his tenure. The super PAC promises to spend millions on politicians “in the pockets of big pharma,” and plans for focus on the West Virginia Senate race next. More here.

Distributors Sue to Block New York Opioids Fee — The drug wholesalers lobby Healthcare Distribution Alliance has filed a lawsuit seeking to block New York’s Opioid Stewardship Act, saying the law — which aims to fund addiction centers through charges to opioid distributors and manufacturers — is unconstitutional and would cost the companies a collective $600 million. The lobby argued that distributors don’t play a role in prescribing or dispensing the addictive drugs.

PHARMA IN EUROPE

European Pact has First Drug Pricing Win — It took three years, but two nations that joined on drug pricing negotiations achieved their first success last week, our POLITICO Europe colleagues report. Belgium and the Netherlands reached a deal with Biogen for a lower price on its spinal muscular atrophy drug Spinraza. The price remains confidential but the $97,320 per injection that Biogen initially demanded was reduced to what the Dutch health ministry termed "an acceptable level." More for Pros here.

... While the Valleta group struggles: Meanwhile, a group of 10 mostly Southern European countries, known as the Valletta group, is struggling to collaborate negotiating drug prices. Part of the difficulty stems from the risk of legal challenges. The 10 countries need to create a legal framework that will make the results of the negotiations legally binding, giving pharmaceutical companies incentives to deal, Greek Health Minister Andreas Xanthos said at a meeting last week in Athens.

Brexit Woes — More than 100 medicines with manufacturing sites in the U.K. are at serious risk of being unavailable in the European Economic Area after Brexit, the European Medicines Agency warned last week. The regulator told companies not to wait until the last minute to change their marketing authorizations or make other needed updates due to Brexit. The EMA will be busier than usual in the first quarter of 2019, relocating to Amsterdam from London, as the formal Brexit approaches at the end of March. To ensure everything gets processed on time, the agency recommends completing submissions before the end of 2018. More for Pros here.

... U.K’s health vision post-Brexit: A Brexit white paper released last week offers fresh details about the government’s vision for a healthy relationship with the EU post-Brexit. The U.K. wants to remain in the European Medicines Agency. The U.K. shouldn’t have voting rights, the white paper says, but want its national regulators to continue doing technical work, even as the “leading authority” for medicine assessments. It also envisions participating in ongoing safety monitoring and the new clinical trials framework.

On drugs, the U.K. says pharma companies should “only need to undergo one series of tests in either market” to sell medicines in both the EU and U.K. More for Pros here.

QUICK HITS

Novartis becomes latest drug maker to ditch antibiotic R&D — Novartis is slashing antibacterial and antiviral research programs in California and laying off about 140 workers. “While the science for these programs is compelling, we have decided to prioritize our resources in other areas where we believe we are better positioned to develop innovative medicines,” the company said in a statement. Novartis is just the latest of the major drug companies to move away from antibiotics, leaving the field to a few smaller biotech firms. The dearth of new antibiotics is a major public health concern as strains of antibiotic-resistant bacteria become more common. Read more from Endpoints News here.

"Real-world" evidence pilot shows success — As the FDA looks to leverage electronic health records, a pilot study finds support for the use of such “real-world evidence” in understanding mortality, RAPs reports. The retrospective analysis of data from Kaiser Permanente, PCORI and others looked at whether EHRs and claims data could provide insight into patient outcomes. It found that real-world endpoints correlated with overall survival. The finding comes as pharma companies become more interested in using real-world data to assess drug quality and regulators look to expand drug labels. But the lack of data standardization in U.S. health care continues to be a barrier. The FDA is looking to improve EHR data with a $100 million proposal in its budget request for fiscal 2019. Commissioner Scott Gottlieb outlined that plan last week. Read more from RAPS here.

DOCUMENT DRAWER

Gottlieb penned a blog post on investing in advanced manufacturing, like 3D printing.

The Institute for Clinical and Economic Review released a draft report assessing the comparative clinical effectiveness of three antiandrogen therapies for prostate cancer.

FDA posted a warning about imposters sending fake warning letters to consumers who tried to purchase medicines online or over the phone.

Senate Homeland Security and Governmental Affairs Committee minority staff published a report on the flood of opioids into Missouri and the need for stronger DEA enforcement.

HHS posted a press release announcing that it will support advanced development of two potential tests for influenza intended for over-the-counter use.

The National Academies published a summary of its recent workshop on the effect of real-world evidence on medical device development.

The American Action Forum published research on how a trade war with China, some of it involving tariffs on medical equipment, would affect U.S. health care costs.

Eli Lilly announced it would roll out new programs in August to help consumers pay for insulin.

PHARMA MOVES

GlaxoSmithKline announced that James Ford will assume the role of general counsel on Aug. 1, succeeding Dan Troy.

The FDA’s deputy director for women’s health, Pamela Scott, is retiring after 28 years with the agency.

The Biotechnology Innovation Organization named Jeanne Hagerty its executive vice president for government affairs and external relations, effective immediately.

CATCHING OUR ATTENTION: AZAR HINTS AT 340B CHANGE — HHS Secretary Alex Azar suggested in a meeting with Republican lawmakers Friday that the agency could standardize 340B discounts at 20 percent of the drug's list price — a significantly lower benefit than current discounts the federal program mandates for hospitals serving disproportionately low-income, uninsured and rural populations. Modern Healthcare reported that the idea was met with push back by several lawmakers, including Rep. Chris Collins (R-N.Y.), who told the publication that the rate would be “devastating” for most critical-access hospitals.

** A message from the Pharmaceutical Care Management Association (PCMA): Public programs like Medicaid and Medicare use rebates on brand drugs to offset high prices. Eliminating plans' ability to negotiate such price concessions would enrich drugmakers at the expense of patients, who would face higher premiums and out-of-pocket costs. The most direct way to reduce costs and improve access to prescription drugs is for drugmakers to cut their prices. **

Link to Article: https://www.politico.com/newsletters/prescription-pulse/2018/07/16/comments-roll-in-on-trumps-drug-pricing-plan-279843