Friday, August 2, 2024

‘Ending as it began’: Drug price talks

Delivered every Tuesday and Friday by 12 p.m., Prescription Pulse examines the latest pharmaceutical news and policy.
Aug 02, 2024 View in browser
 
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By David Lim and Lauren Gardner

Driving The Day

Daily prescription medications in a person's hand.

The first round of Medicare drug price negotiations has ended. | Phelan M. Ebenhack/AP

IT’S OVER — The first Medicare drug price negotiations formally came to a close Thursday — but under a strict confidentiality agreement between drugmakers and CMS, the final prices are still under wraps.

“Now that the negotiation period has ended, the Biden-Harris administration will announce new maximum fair prices in the coming weeks,” Sara Lonardo, HHS deputy assistant secretary for public affairs for health care, said in a statement.

That isn’t stopping the drugmakers from slamming a program they argue harms their industry.

“The first round of government price setting is ending as it began: without clear standards for how prices are set and without adequate protections to make sure patients have access to their medicines,” Scott Frotman, spokesperson for industry group Biotechnology Innovation Organization, said.

Even after prices become public, Larry Levitt, executive vice president for health policy at KFF, said it would be difficult to ascertain how successful CMS was during negotiations because “the drug pricing system is such a black box.”

“Drugmakers are expressing optimism about the effects of this initial round of price negotiations to Wall Street while still saying the sky is falling on Capitol Hill and in court,” Levitt said.

On the trail: Vice President Kamala Harris is signaling that she wants to extend an out-of-pocket cap on drug costs to the private market if she is elected in November. Under the Inflation Reduction Act, a $2,000 annual cap will take effect next year for older adults on Medicare.

“We will take on Big Pharma to cap prescription drug costs for all Americans,” Harris said earlier this week. “Our plan will lower costs and save many middle-class families thousands of dollars a year.”

IT’S FRIDAY. WELCOME BACK TO PRESCRIPTION PULSE. Have thoughts about CMS’ Part D premium stabilization demonstration program? We want to hear from you.

Reach out to David Lim (dlim@politico.com or @davidalim) and Lauren Gardner (lgardner@politico.com or @Gardner_LM).

 

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AROUND THE AGENCIES

CMS TAKES AIM AT DRUG SHORTAGES — CMS finalized a plan Thursday to pay small independent hospitals to establish and maintain a buffer stock of essential drugs — a step it says will help mitigate drug shortages.

Why it matters: The measure comes amid inaction in Congress despite dueling proposals from Republicans and Democrats who agree more needs to be done to stem shortages of critical generic drugs including common cancer medications.

The fiscal 2025 final rule for the inpatient prospective payment system targets smaller rural hospitals that lack the resources larger hospitals have, according to CMS.

“In the future, CMS will assess the program’s impact and consider program expansion and other revisions, where appropriate, to help ensure availability of essential medicines for patients,” according to a fact sheet.

In the Courts

People walk inside the Novo Nordisk headquarters

Novo Nordisk lost its bid to put an end to Medicare's drug price negotiation program in court this week | Sergei Gapon/AFP via Getty Images

NOVO LOSES IRA CHALLENGE — Another drugmaker seeking to overturn the Inflation Reduction Act’s Medicare drug price negotiation program failed this week, the latest in a string of legal losses for the pharmaceutical industry.

But Novo Nordisk plans to appeal the ruling — and policy experts say one of the several lawsuits challenging the program will likely end up at the U.S. Supreme Court.

“The drug industry has not done well so far in court, but it’s still just early innings,” said Larry Levitt, executive vice president for health policy at KFF. “It’s hard to imagine that drug negotiation won't eventually end up before the Supreme Court.”

A potential twist: But the opinion from Judge Zahid Quraishi, a Biden appointee to the U.S. District Court in New Jersey who previously ruled against two other drugmakers, contained a wrinkle. Novo Nordisk argued that CMS overstepped its legal authority by combining several insulin products as a single drug for price talks.

Quraishi agreed with HHS that Novo Nordisk failed to show it had standing because it sought to enjoin the program as a whole — but did not rule on whether the total number of drugs selected by CMS for negotiations is exempted from judicial review.

“If Plaintiffs’ premise is incorrect (or CMS’s determination is unreviewable), it leads to a relatively straightforward conclusion: Plaintiffs have suffered no injury because CMS properly identified its six products as a single drug, and ten drugs in total were identified in compliance with the IRA,” Quraishi wrote.

In Congress

NIH GETS A FUNDING BOOST — A group of bipartisan Senate appropriators advanced an HHS funding bill Thursday with $122.8 billion for the department, slightly below the $130.7 billion President Joe Biden requested.

That is setting up a sharp contrast to the House Appropriations Committee, which seeks a 7 percent cut to HHS’ funding that would leave the department with $107 billion, POLITICO’s Chelsea Cirruzzo reports.

Drugmakers may take heart that Senate appropriators are increasing NIH’s funding by about $2 billion to $50 billion in fiscal 2025. It also keeps level funding of $1.5 billion for the Advanced Research Projects Agency for Health.

The Senate bill, which advanced by a 25-3 vote, also includes a $200 million boost for the Administration for Strategic Preparedness and Response, with increases focused on the Strategic National Stockpile and the Biomedical Advanced Research and Development Authority.

 

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WHAT WE'RE READING

Vaccine maker Moderna saw its stock fall more than 20 percent on Thursday after it lowered its revenue guidance for 2024, CNBC’s Annika Kim Constantino reports. Moderna CEO Stephane Bancel told CNBC the company is seeing more competition for its Covid-19 and respiratory syncytial virus vaccines.

Vice Presidential nominee Sen. JD Vance raised the possibility of another GOP attempt to “reform” the Affordable Care Act depending on the makeup of Congress, NOTUS’ Reese Gorman reports.

Pharma Moves

FDA is hiring a new top medical device regulator — and offering a salary of up to $400,000.

Document Drawer

The FDA is renewing the charter for its Psychopharmacologic Drugs Advisory Committee for an additional two years.

 

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David Lim @davidalim

Lauren Gardner @Gardner_LM

 

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