News: CBO evaluates the drug pricing policy menu

Tuesday, October 8, 2024

CBO evaluates the drug pricing policy menu

Oct 08, 2024

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With Chelsea Cirruzzo

Driving The Day

Bottles of medicine ride on a belt at a mail-in pharmacy warehouse.

A CBO report indicates that popular drug pricing policy proposals would only modestly reduce average drug prices. | AP file

MONEY MATTERS — A slate of popular policies commonly bandied about to help reduce drug costs would each cut average prices by only a handful of percentage points, according to a recent Congressional Budget Office report.

But even small percentage savings could be consequential: By 2031, the retail drug market is slated to grow to more than $690 billion, according to the CBO. That includes both public and private buyers.

Expanding the Medicare drug price negotiation program to include more drugs each year — an idea supported by Democrats, including Vice President Kamala Harris — would reduce average drug prices in 2031 by 0.1 to 3 percent. And extending those negotiated prices to all commercial purchasers would result in prices that are 1 to 3 percent lower.

By contrast, an international reference pricing policy based on prices in Australia, Austria, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland and the United Kingdom would reduce average drug prices in 2031 by more than 5 percent, the CBO said.

Former President Donald Trump’s campaign recently said that “there is no push to renew” the most favored nations drug pricing policy that initially aimed to tie the price of 50 Medicare Part B drugs to levels paid by other wealthy nations.

Both the Harris and Trump campaigns did not respond to requests for comment on the CBO report.

Larry Levitt, executive vice president for health policy at KFF, said the impact of expanding Medicare drug price negotiations appears muted partly because Medicare is only one portion of the market.

“It does show how hard it is to reduce the cost of healthcare generally, and drug prices specifically,” Levitt said.

The report was requested in November 2022 by Sen. Sheldon Whitehouse (D-R.I.), chair of the Senate Budget Committee, and Sen. Bernie Sanders (I-Vt.), chair of the Health, Education, Labor and Pensions Committee.

“We shouldn’t understate how meaningful that is in terms of both billions of dollars in spending and the patients that are directly impacted by the drugs that are reached by these reforms,” Steve Knievel, who works on Public Citizen’s Access to Medicines program, said. “It suggests we need to do all of this and go further.”

Other popular ideas like allowing drug importation from other countries and eliminating or limiting direct-to-consumer prescription drug advertising would each respectively reduce average prices by 0.1 to 1 percent, according to the CBO.

IT’S TUESDAY. WELCOME BACK TO PRESCRIPTION PULSE. Why is there no vaccine in the U.S. against the viruses that cause hand, foot and mouth disease? While your blistered co-host has a personal stake in this question, your answers may inform a future newsletter item!

Send tips, ideas and HFM takes to David Lim (dlim@politico.com or @davidalim) and Lauren Gardner (lgardner@politico.com or @Gardner_LM).

A message from Express Scripts by Evernorth:

In 2023, four in five Express Scripts by Evernorth patients spent less than $250 a year out-of-pocket for all their medications. Yes, despite the median annual price of new drugs to market soaring to an average of $300K. That's not a middleman. That's an advocate. Express Scripts is advocating to make medications more affordable. Learn how here.

Eye on the FDA

The Food & Drug Administration campus in Silver Spring, Maryland is pictured.

Two Xinjiang-based pharmaceutical companies are registered with the FDA, potentially conflicting with a 2021 U.S. law. | Andrew Harnik/AP

FIRST IN RxP: XINJIANG-LINKED FIRMS REGISTERED WITH FDA — Two producers of pharmaceutical products that are based in China’s Xinjiang region are registered with the FDA to distribute or import goods into the U.S., an allowance that runs counter to a 2021 law limiting the flow of trade from the area.

The registrations are highlighted in a report released today by the Center for Advanced Defense Studies, a Washington-based nonprofit that analyzes data on global conflict and security issues. The group studied public data to ascertain the pharma industry’s presence in the Xinjiang Uyghur Autonomous Region, where the Chinese government has subjected Uyghur Muslims to abusive practices that the U.S. government has designated as genocide.

The report comes amid heightened interest on Capitol Hill in the pharma industry’s ties to China. Lawmakers in both parties fret that drug development work with Chinese biotechs and within the country’s borders poses intellectual property and human rights issues.

License and registration: SEL Biochem Xinjiang Co. and Xinjiang Nuziline Bio-Pharmaceutical Co. are included in the FDA’s public database of companies that make or process drugs that may be distributed or imported into the U.S. Both firms are registered with the agency through the end of 2024.

An FDA spokesperson didn’t comment on the report.

Background: The 2021 law essentially bars companies from sourcing goods or materials with ties to the region. Importers can try to substantiate that their suppliers don’t use forced labor, but the complexity of supply chains and a Chinese law targeting foreign sanctions regimes make that exceedingly difficult.

ADCOMM ALERT — The FDA is set to hold two advisory committee meetings on Thursday:

Flu spotlight: The vaccines panel will decide which flu strains should be included in formulations for the Southern Hemisphere’s 2025 season.

The committee will also “discuss pandemic preparedness for highly pathogenic avian influenza virus” and considerations for the composition of vaccines targeting bird flu.

Rare disease drug: The cardiovascular and renal drugs panel will consider Stealth BioTherapeutics’ application to market elamipretide hydrochloride injection to treat Barth syndrome, a rare disorder that can cause an enlarged and weakened heart, muscle weakness, recurrent infections and delayed growth. Males are typically affected and face a shortened life expectancy into their 40s, though most early deaths occur by age 5.

The company announced in April that the FDA had accepted its new drug application after years of back-and-forth with officials over its proposed therapy.

Advisers’ opinions of Stealth’s application could inform how other rare-disease drug developers approach vetting their candidates with the FDA, given the inherently small patient pools firms have to test their products in.

Industry Intel

HOSPITALS ASK FOR IV HELP — The American Hospital Association asked federal officials on Monday to declare a shortage of IV fluids and allow them to use certain flexibilities, such as preparing sterile solutions in their own pharmacies.

The request, sent to President Joe Biden, comes as a North Carolina factory responsible for producing most of the IV solution sent to hospitals across the country remains offline due to damage from Hurricane Helene. Baxter International, which owns the factory, said Friday it has limited how much medical supplies can be ordered, Chelsea reports.

In its letter, AHA said its members are “already reporting substantial shortages of these lifesaving and life-supporting products. Patients across America are already feeling this impact, which will only deepen in the coming days and weeks unless much more is done to alleviate the situation.”

Rep. Debbie Dingell (D-Mich.) made a similar plea to HHS on Friday, asking in a letter to HHS Secretary Xavier Becerra how federal officials might prevent a national shortage of IV fluids and meet hospital demand. She also asked whether officials plan to invoke the Defense Production Act, which would compel manufacturers to prioritize IV fluid production. The AHA also asked that the Defense Production Act be invoked.

A senior Biden administration official told Pulse that HHS officials held a briefing Friday and are working with Baxter to confirm how much product is available.

“This could include reviewing potential temporary imports or expediting reviews of the cleaned and restored manufacturing lines,” the official said.

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Coronavirus

FDA AUTHORIZES FLU/COVID TEST — The FDA greenlit the first at-home test for flu and Covid-19 late Monday for use outside of emergency use authorization powers. The test, made by Healgen, was approved through the agency’s de novo medical device pathway.

Pharma Worldwide

U.S. SHARES INVESTIGATIONAL MARBURG VACCINES — The U.S. shared “hundreds” of an investigational Marburg virus vaccine and “a small number” of investigational therapeutic doses with Rwanda this past weekend, according to National Security Council spokesperson Sean Savett.

“To keep Americans safe, we are implementing additional precautions for a small, select group of travelers arriving in the United States from Rwanda, including additional public health entry screenings,” Savett said in a statement. “To facilitate these precautions, the United States will finalize plans in the coming week to redirect passengers who were recently in Rwanda to certain U.S. airports for public health entry screening and follow up measures.”

Pharma Moves

Former FDA drug regulator Dr. Janet Woodcock has joined the board of Every Cure, which aims to identify drugs that can be repurposed to treat multiple diseases.

Walgreens has named Jason Stenta senior vice president and chief commercial officer. He joins the pharmacy chain from Optum.

Document Drawer

The FDA is requesting comments on a draft document for controlled terminology developed by the Office of Pharmaceutical Quality to describe quality attributes and characterization of therapeutic protein products.

WHAT WE'RE READING

Stat’s Isabella Cueto examines the sibling newcomers to the conservative “Make America Healthy Again” movement targeting chronic disease.

Dr. Anthony Fauci, former director of the National Institute of Allergy and Infectious Diseases, recounts his experience battling West Nile virus in The New York Times.

A message from Express Scripts by Evernorth:

Want to know something unhealthy? The median annual price of a new drug reached $300K in 2023. Yes, $300,000. Yet millions of Americans paid less than $250 a year out-of-pocket for all their medications combined. How? Express Scripts by Evernorth. Express Scripts by Evernorth is the primary line of defense for millions of Americans against rising health costs – advocating every day to make their medications more affordable and accessible. And they’re not stopping anytime soon. That’s not a middleman. That’s an advocate.

See how Express Scripts is advocating to make medication more affordable for millions here.