Pharma's Reputation Is Headed in the Wrong Direction (Plus the Week's Top 10)

If you get my daily email newsletter, you’ve already seen my IRA lawsuit timeline update, an in-depth look at surprising new pharma R&D spending estimates, and an examination of an ICER about-face on a gene therapy review. If you don’t get that newsletter, you can subscribe here.?

This Gallup survey on industry favorability has been living rent-free in my mind for most of the week.?

If you’re not tracking on the specifics, Gallup has, for the past 22 years, run an annual poll asking Americans how they view various industries. Pharma generally ranks near the bottom of the list, along with the oil industry and the federal government. It’s usually good for a moment or two of hand-wringing.?

This year, though, the results looked real bad, even by pharma’s standards. Only 18% of Americans view the industry favorably. That’s seven percentage points lower than last year, and a new record. Per Gallup, the reason that the bottom fell out is that Republican support for the industry, which has historically been OK (relatively!), was cut in half.?

Oof.?

This ought to be a wake-up call for an industry that has always kind of assumed that developing the next generation of breakthroughs would be enough to keep reputational issues from becoming policy or commercial problems. But innovation isn’t the firewall it once was. Even with the Inflation Reduction Act’s passage, both of the likely 2024 presidential nominees want to go further in sticking it to industry.?

Everyone I’ve talked to about the reputational problems has their own theory on how pharma can start to claw its way back to a point where favorability isn’t underwater. And I don’t think there is any idea that’s not worth thinking about (though some of the macro trends are probably beyond the ability of pharma to solve).??

My take is that the industry can probably start small, setting a goal of no unforced errors.?

Biopharma companies do a lot of things that probably garner them a marginal commercial advantage but have the potential to incur a small but real reputational cost. You can probably think of one or two (or one or two dozen).?

It’s time to start taking those small, potential risks more seriously, because it’s the small miscalculations that can lead to large errors.

The Top 10 Drug-Pricing Stories of the Week:?

1. This Nephron Research report is the second-most-geeky report released this week, but it’s a clear #1 for the top 10, documenting the way that fees have suppleplanted rebate dollars as a profit driver for PBMs.?
2. Drug prices are going down, per SSR data.?
3. Industry and patient groups told CMS this week that they need to prioritize publicity for a new part of the Inflation Reduction Act that allows Medicare beneficiaries to smooth their drug bill by spreading costs evenly over the course of the year.?
4. The most-geeky piece of research this week is this analysis of drug list prices by 3 Axis Advisors, which found that the price that pharmacies end up paying to acquire medicines is hugely variable because of PBM machinations.?
5. Everyone you can think of -- AARP, a bunch of senators, some physician groups, a handful of high-profile academics -- filed amicus briefs in the Merck IRA case.?
6. KFF Health News went deep on why biosimilar Humira is off to a slow start, fingering the usual suspect: PBMs.?
7. There is officially legislation to fix the IRA’s treatment of orphan drugs. BIO likes the effort, though it’s not clear where it goes from here.?
8. Health plans’ opinion of PBMs fell a touch last year, according to a new Pharmaceutical Strategies Group survey of plans, though Adam Fein suggested that the results say as much about plans as it does about PBMs.?
9. Both the pharmaceutical industry and Optum Rx think that alternative funding programs are a bad idea, according to a panel at this week’s NASP meeting. (As a reminder, alternative funding programs are a new payer tactic where the plan stops covering individual drugs and, instead, helps patients get the meds through patient assistance programs.)
10. Insurance companies have, for some patients, screwed up the rollout of the new COVID-19 boosters through technical snafus. (As a reminder, this is the first go-round where commercial insurance -- not the federal government -- is handling reimbursement.)