“What’s good in politics is often not good policy,” PBM practices, U.S. vs. EU approvals, and more.

July 16, 2024

Welcome to NPC This Week! We hope you'll join us each week for a look-ahead at the policy, research, and industry conversations that matter to the future of biopharmaceutical innovation. The DMs are open if you have suggestions — and please share with your network. - Michael Pratt and Devon Bortz

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NPC Highlights

An Honest Conversation on Drug Pricing: NPC President and CEO John O’Brien sat down with journalist Steve Usdin on The BioCentury Show for a half-hour discussion on how our current system views medicines as an arbitrage opportunity to pay for other healthcare goods and services. The podcast touches on many of NPC’s core research areas including the Inflation Reduction Act, PBMs, and the 340B program.

• Notable Quote: “Regardless of who wins, we’re living in a policy environment that’s impacted by misguided political hostility towards an industry that makes life-saving medicines. What’s good in politics is often not good policy.”

Value Viewpoint: In her latest “Value Viewpoint,” NPC Chief Strategy Officer Kimberly Westrich includes a review of Value in Health's July issue, a Health Affairs Forefront commentary on the need to include healthcare services and procedures in value assessment, and ICER’s revised evidence report for the treatment of anemia in myelodysplastic syndrome (MDS).

Industry News

FTC Planning Legal Action on PBM Practices: In the wake of the FTC’s interim report on prescription drug middlemen, the agency is preparing legal action against three major PBMs for allegedly using negotiating tactics to steer patients toward more expensive drugs such as insulin, The Wall Street Journal reports.

• Updates From Congress: Reforms to PBM practices are gaining momentum on Capitol Hill after the FTC’s interim report and a favorable readout of potential savings from the Congressional Budget Office. Additionally, executives from three major PBMs are expected to testify at a July 23 hearing of the House Oversight Committee.

Poll: Americans Concerned About Insurer and PBM Practices: A national poll by PhRMA and Morning Consult reveals that more than half of Americans have encountered insurance barriers such as prior authorization in the past year. Eighty percent of the more than 20,000 respondents favored a hypothetical policy to require health insurers and middlemen to pass rebates and discounts directly to patients at the pharmacy counter.

Access During COVID-19: A new study in JAMA Health Forum shows that healthcare and prescription medication affordability improved across all income groups during the COVID-19 pandemic, especially for low-income adults. The study authors express concern about the potential increase in health care inequities as pandemic-era safety-net policies are phased out.

U.S. Leads Europe in Novel Prescription Drug Approvals: A Pink Sheet analysis of prescription drugs approved in the past two years finds U.S. FDA approval preceded clearance by the EU’s European Medicines Agency (EMA) for 77% of products approved by both regulatory agencies. Thirty-seven of the 48 drugs studied were approved by the FDA first with a median of 5.1 months before EMA approval was received.

ICYMI

New 340B Law in Missouri: Missouri will become the eighth U.S. state to enact a law prohibiting restrictions on contract pharmacy relationships in the 340B program. The law passed after Gov. Mike Parson (R) announced he would neither sign nor veto a contract pharmacy access bill passed by the state legislature.

Interest in CMS C&G Model: A Medicaid pilot program to test outcomes-based contracting for innovative cell and gene therapies to treat sickle cell disease has attracted widespread interest from state payors, Pink Sheet reports. However, while Elizabeth Fowler, Director of the U.S. Center for Medicare and Medicaid Innovation, says the organization is “really excited” about the centralized-contracting model, House Energy and Commerce/Health Subcommittee Chair Rep. Brett Guthrie, R-KY, is concerned the program will weaken states’ bargaining power.

Analysis of CMS Projections: Adam Fein of Drug Channels Institute pored over the latest CMS projections for U.S. spending on healthcare, noting that spending on prescription drugs is — and is projected to remain — “a small portion of overall U.S. healthcare expenditures.” He provides a glimpse into how demographic shifts and looming IRA price controls will “have a significant impact on future spending by government programs and consumers.”

CMS and Inflation Rebates: Medicare administrators released the proposed rule for the calendar year 2025 physician fee schedule. It features adjustments to an IRA-mandated program to require manufacturers pay rebates on drugs covered under Medicare Parts B and D if list prices rise faster than a retroactive rate of inflation. Among the tweaks: CMS seeks to codify policies to adjust how 340B drugs and drugs currently in shortage are considered when calculating total inflation rebate amounts.

Change in U.K. Leadership: The center-left Labour Party’s takeover of the British government has the life sciences and generics industries eager to see if promises will be kept to speed regulatory approvals, boost innovation and access, and cut regulatory trade barriers.