3 Theories on Why Big Pharma Has Little to Say on IRA (Plus the Week's Top 10)

Earnings season is close to done, at least for big pharma companies, meaning that it’s time to over-extrapolate trends from the snapshot that each company has provided. 

For my money, the most fascinating trend isn’t what was a part of the last two weeks of earnings announcement. It’s what has been omitted: any meaningful discussion of the Inflation Reduction Act. 

In some ways, the silence on the topic is weird. I haven’t walked into a room with industry folks where the law wasn’t on the tip of everyone’s tongues. This is the first earnings season after the 10 “selected drugs” were made public. We have nine lawsuits moving forward. Some could see rulings before the next set of earnings.

A lot is going down. 

And, yet, the earnings calls were almost entirely bereft of any mention (J&J included a brief aside, and there were some super-brief mentions around specific brands). 

So what’s going on?

Three theories: 

1. We Know Everything. With final guidance from CMS out, the identity of the first 10 medicines no longer a mystery, and all of the legal arguments aired, there’s not much left to the imagination. So there’s not much for analysts or executives to try to handicap. Earnings calls are about trying to predict the future, and we’re now living in that future. There’s just not much to say.  
2. We Don’t Know Anything. The next step of big questions are known unknowns: what will happen with the legal action? How will CMS set prices? How will payers react? There are not nearly enough breadcrumbs out there to answer those questions, and management teams don’t have any incentives to make wild predictions in the absence of solid information. So everyone is keeping mum for now. If and when new variables emerge that will have commercial impacts, the topic will re-emerge. For now, ignorance is bliss.
3. Silence Is Golden. There is a perception that talking about the IRA is a risky endeavor. Lean too hard into the idea that the law will curtail investment risks negative headlines. So does talking too much about lawsuits, which are frequently, if unfairly, positioned as an end run around the law. Heck, there is even an effort to shout down patients trying to talk about unintended consequences of the law by tying the advocates to industry. So there may be a collective desire to just keep mum for a bit to minimize the avenues for attack. (That’s not the right strategy, but that’s a topic for another post.)

Top 10 Stories of the Week: 

1. This week saw the kickoff of CMS’ “patient-focused listening sessions.” I’ve captured transcripts of the presentations, many of which emphasized that access is as important as price. But the whole ordeal hasn’t been run according to anything close to best practices. 
2. There’s new legislative language around PBMs set to drop next week. The new bill is the first to target patient out-of-pocket costs directly. 
3. The way that CMS will calculate “best price” in the Medicaid program (and, therefore, in 340B) is the biggest deal that no one is talking about. But, this week, some Senate Republicans started talking. 
4. The team at NPC published an illuminating Health Affairs piece highlighting the way that some of the unintended consequences of the IRA would have impacted three of today’s blockbusters. 
5. The Colorado prescription drug affordability board might pass on the chance to set a maximum price on Trikatfa for cystic fibrosis. Elsewhere on the topic, a STAT op-ed detailed some of the adverse effects Colorado moves ahead with a price cap. 
6. The government filed its legal brief pushing back on AstraZeneca’s anti-IRA argument, which -- unlike other lawsuits -- is more focused on how CMS is implementing the law than constitutional objections. 
7. The highlight of earnings season was news from Novo Nordisk and Lilly that it’s full speed ahead for obesity meds. Novo bragged that insurance coverage was keeping out-of-pocket prices low for nearly all patients, and Lilly said that anti-obesity meds were “not that hard of a sell” to insurers.
8. One of the most interesting concepts of the past couple of years was the idea that Chinese PD-1 cancer drugs could be deveoped inexpensively and brought to the United States at a discount. High-profile efforts from EQRx and Lilly flamed out, and -- this week -- came the news that Coherus wouldn’t pursue that strategy for its newly approved PD-1. 
9. ICER pushed out a report that purports to measure whether insurance plans are promoting “fair access,” but -- as this STAT story makes clear -- not even ICER is convinced that the report reflects reality. 
10. Boy, we’re seeing some lousy hot takes on obesity meds. This Washington Post op-ed is one such example. But, fortunately, this WSJ piece dropped, making fun those who fall for the hype.