As the old Danish proverb goes, it’s hard to make predictions, especially about the future. That doesn’t stop us from — once a year — taking a stab at it. The value and pricing conversation is moving fast, making it critically important to try to think about what’s coming next.

So here are our five predictions for what’s on tap for 2020. Some should be slam dunks, others will be air balls, but all of them reflect how we at W2O will be thinking about the next 12 months. (If you’re curious about our performance last year, we grade our 2019 prognostications at the bottom.)

Prediction One: The Most Meaningful New Policies Will Come from Statehouses

The political winds can shift pretty quickly, but the smart money suggests that industry-shifting reforms to the way that drugs are priced aren’t coming at the federal level. But Congress isn’t the only legislative body capable of setting policy: statehouses across the country are likely to continue to serve as laboratories of democracy. Sessions will begin next month, and we expect to see a wave of new bills designed to hold drug prices in check. It’s safe to ignore most transparency bills; early experiments in CaliforniaOregon and Nevada don’t seem to have had much impact. More significant would be efforts to develop drug review boards for state programs – efforts are percolating in Massachusetts and Colorado — where there is momentum from experiences in New YorkMaryland and elsewhere.

Prediction Two: ICER Will Get Competition

The Institute for Clinical and Economic Review has established itself as the predominant health technology assessment body in the United States, despite a lack of any formal power. That generates a fair amount of unease, especially given methodological concerns and hiccups in execution. That’s going to prompt the emergence of another value framework designed for broad use in the United States, likely supported by industry, to serve as a second opinion on ICER reviews. That could mean a turbo-charged Innovation and Value Initiative or an entirely new entity could enter the fray. No new entity is likely to displace ICER – not in 2020, and not beyond – but a larger marketplace for ideas will help decision-makers more thoughtfully think about value.

Prediction Three: Before “Nuclear Winter,” We’ll Get “Silent Spring”

The drug-pricing legislation passed by the House – and endorsed, in one form or another, by all Democratic presidential front-runners – will dry up innovation. The only question is how much. (For the most thoughtful estimate, see this PhRMA-sponsored analysis.) But, in 2020, concerns about innovation will become more than just a talking point and a theoretical concern: we’ll see more and more stories and more data about actual early-stage biotechs, especially those with untested but high-potential approaches, that are unable to secure funding. It won’t be the “nuclear winter” predicted by industry (not yet, anyway), but we’re calling the tangible, early effects of the uncertainty “silent spring,” and we’re making the call that we’ll see that phenomenon emerge in the next 12 months.

Prediction Four: Drug Prices Will Fall (And People Will Notice)

This is almost a gimme: drug prices have been essentially flat for the last three years, and it seems likely that the 2019 numbers will show the trend continuing. Of the five drugmakers who report net prices, four saw them fall in 2018. The country’s largest PBM said “unit costs” dropped 0.4%. And the federal government’s comprehensive assessment of retail drug spending also saw a drop. None of the factors driving those trends is diminishing: 2020 will be another year of deflation. The more audacious part of the prediction is that media and policymakers will begin to notice. Right now, the good news about drug pricing has been largely ignored, and while we don’t expect the public to throw rose petals at the feet of biopharma CEOs, we will see more acknowledgement that (most) of the industry has entered a new era of responsibility.

Prediction Five: The Defining Battle of 2020 Will Be Semantic

The debate over federal intervention will break down to one focused on lexicon. Right now, the most aggressive proposals all focus on allowing the government the power to “negotiate.” That’s been a talking point shared by Democrats and President Trump and even, to a lesser extent, by Republicans. Everyone loves the idea of “negotiation,” but it’s a misleading term: under H.R. 3, the House drug-pricing bill, “negotiations” would take place with a mandated cap on how much the government would pay, pegged to international prices. And any company that chose to simply walk away from the negotiating table would be punished. Those coercive elements have much more in common with “price controls,” an idea with far less support than “negotiations.” If we’re still talking about these policies as “negotiations” in a year, industry should be prepared for draconian reforms. If the media and policymakers, instead, are framing the cornerstone Democratic drug-pricing provisions as “price controls,” it’s likely 2020 (and beyond) will be a year of more heat than light.

So how did we do last year? Here were our predictions, and here is our self-assessment:

  1. “The first 90 days of 2019 will be the roughest news cycle ever for pharmaceutical pricing.” That wasn’t a particularly daring prognostication, and the cycle didn’t just peter out after 90 days. GOT IT RIGHT.
  2. “The End of Rebates … the [rebate] rule will come out of review in 2019 as the administration’s signature move on drug pricing.” The rule did come in like a lion but went out, only a few months later, like a lamb, the victim of wild White House infighting. HHS Secretary Alex Azar ended up on the wrong side of the debate. So did we. GOT IT WRONG.
  3. “PBMs Get Reinvented.” This one was a little mushy. PBMs kept taking fire, especially in the states, around spread pricing, but the rebate rule vanished. We’ll call this a PUSH.
  4. “Value Takes a Hit.” We thought that that idea of “value” – particularly the idea of price-setting based on value-driven calculations – would lose its shine. If anything, the debates about what constitutes value only intensified. GOT IT WRONG.
  5. “Transparency Comes of Age.” Sure, the Trump administration’s plan to require prices in drug ads ran into legal trouble. But the voluntary PhRMA disclosure approach and a passel of state efforts mean that list prices are close to public record now (even if no one appears to care). GOT IT RIGHT.

A “Predictions” article isn’t much fun if you can’t argue about it, so W2O hosted a webinar on Wednesday, Jan. 8 to defend our thinking and hear yours. National Pharmaceutical Council President and CEO Dan Leonard joined me to offer his thoughts on our predictions and what might befall us all in ’20. Watch above or follow this link.