The State of the Union, IRA incentives and disincentives, march-in rights, 340B, and more.

March 12, 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, NPC Chief Communications Officer

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NPC HIGHLIGHTS

SOTU: NPC President and CEO John O’Brien shared on LinkedIn ahead of last Thursday’s State of the Union that it was “disappointing to hear the Administration doubling down on price-setting” with substantive concerns about unintended consequences. Dr. O’Brien pointed out NPC research showing that central planning and price regulation don’t lead to innovation and that the Inflation Reduction Act may: delay launches of small-molecule drugs, result in fewer conditions getting new treatments approved, reduce research that helps clinicians understand long-term health outcomes, and encourage insurance plans to reduce access to the drugs selected for negotiation this year by changing the copays or increasing utilization management barriers (such as step therapy and prior authorization).

In Pink Sheet, Dr. O’Brien highlighted the many questions about the current iteration of the IRA. For more, here’s coverage in Politico and The Washington Post.?

Value Viewpoint: NPC Chief Strategy Officer Kimberly Westrich provides a fly-around of important value-focused articles, events, and reports in her “Value Viewpoint.”

Additional Approvals: BioSpace covered NPC’s research examining how the IRA may discourage research on new indications for already approved drugs.

INDUSTRY NEWS

340B and Employers: Does the 340B program cost taxpayers anything? In search of an answer, IQVIA created a model to quantify the financial impact of the 340B program on drug and total healthcare costs and to understand the impact on self-insured employers and the more than 100 million workers they employ.

March-in Rights: Congressional Republicans are considering ways to block President Biden’s plan to allow patent-canceling march-in rights, STAT reported. Speaking of canceling patents, the World Trade Organization has given up on a controversial proposal to waive intellectual property rights for COVID-19 diagnostics and treatments.?

340B: For a clever “origin story” of 340B, 46Brooklyn has you covered with “How money from sick people works, Part II: The 340B story.” One of the gems: “There is no secret drug money tree that keeps replenishing itself (outside of Woonsocket, that is).”?

Patient CoPays: In this Politico story about Boehringer Ingelheim capping out-of-pocket costs for its inhalers at $35, the company’s U.S. CEO Jean-Michel Boers highlighted why the complex system of rebates isn’t working for patients: “We are actually rebating and discounting our inhalers on average more than 70%, well over 70%, but unfortunately, we don’t see that these rebates and discounts make it into patients’ pockets.”

Specialty Pharmacy: Sanofi’s Pricing Principles report offers an interesting illustration of the barriers faced by patients in need of? specialty drugs. NPC research has documented trends in coverage of specialty drugs by commercial payers in the U.S. and found growing restrictiveness, barriers resulting in reduced patient adherence, and gaps in the use of evidence to inform coverage policies.

Pricing Transparency: UCB issued its pricing transparency report and discussed steps needed to build “a sustainable healthcare system.”?

GLP-1s: The Congressional Budget Office is looking at how much weight-loss drugs could cost the federal government if a ban on Medicare coverage of the treatments is lifted, Politico reported. Not mentioned — the broader impact on health system costs if the treatments are more widely available to patients with obesity and related chronic health conditions like diabetes and heart disease. Researchers at the USC Schaeffer found that “the cumulative social benefits from Medicare coverage for new obesity treatments over the next 10 years would reach almost $1 trillion, or roughly $100 billion per year.”

Reimportation: Colorado’s plan is stalled at the FDA, The Washington Post reported.?

ICYMI

IRA Incentives: Two separate commentaries were published in The Hill recently about the IRA’s bias against small molecule drugs. Johns Hopkins University medical professor and MedPAC Commissioner Brian Miller, a former FDA reviewer, urged changes in FDA processes to restore incentives for small molecule drugs. Meanwhile, James K. Glassman pithily called the bias against small molecule drugs the “pill penalty.”?

Hospital Pricing: Markups that hospitals can take on infused drugs, coupled with 340B discounts that so many hospitals get, “diverts a substantial portion of drug spending away from pharmaceutical firms and toward hospitals,”? University of California health economist James C. Robinson wrote in a Health Affairs Forefront piece.?

PBMs: An op-ed in The Tennessean urged Congress to pass PBM reform. And a commentary in The Boston Globe from the Asthma and Allergy Foundation of America’s Kenneth Mendez describes how perverse incentives embedded in the pricing system hurt access for people with asthma.

MARK YOUR CALENDAR

Wednesday, March 13: NPC is glad to be supporting the University of Michigan Center for Value-Based Insurance Design’s 2024 V-BID Summit, which will be held virtually from 12–4 PM ET. This year’s event will focus on “Overcoming Financial Toxicity.”

Thursday, March 14: At The Innovation and Value Initiative’s 5th Annual Methods Summit, NPC’s Jon Campbell will join a panel to discuss Real Option Value — an approach in value assessment that calculates the benefit patients and caregivers receive from treatments that extend life, giving patients the chance to benefit from future treatment advances.