Value Report, December 18, 2020
Today’s report is chock-full of Friday breaking news. But did you know we have breaking news every day with our subscription-only Recommended Daily Value? Earlier this week, you would have learned that those state laws requiring price transparency are getting virtually no traction online – see here for details. If you want more of that, get your free trial through this link. The free Value Report, however, will come at you again next Wednesday for our final issue of the year. Happy Holidays!
MFN Goes to Court
A U.S. District Court in Maryland heard arguments this morning on PhRMA’s attempt to delay implementation of the Trump administration’s Most Favored Nation drug pricing rule. Lawyers from PhRMA and the National Infusion Center Association, in asking for a temporary restraining order and injunction, argued that the rule should be delayed past Jan. 1 to avoid disruption and negative impacts to Medicare patients. A decision about issuing a restraining order is expected by Christmas.
Also, Coherus and Regeneron filed their own MFN suits. Coherus said its sole product, Udenyca, would see its price drop immediately by more than 20%, and by 95% within four years. Udenyca is the only biosimilar included in the MFN project and is not sold outside the U.S., so the MFN program is using Udenyca’s branded counterpart, Amgen’s Neulasta, as its benchmark.
Drug Prices Are Falling
Reports of drug prices going up is always news: last January, we counted 40-plus pieces on beginning-of-year price list-price hikes. The opposite trend – evidence that drug prices are dropping – doesn’t seem to generate the same excitement.
As a result, the blockbuster finding from the Centers for Medicare & Medicaid Services that the cost paid for medicines via retail pharmacies dropped in 2019 for a second straight year went almost unnoticed. But make no mistake: CMS’ National Health Expenditures data reported a 0.4% drop in prices following a 1.0% drop in 2018. Overall, drug spending was up 5.7%, driven by more use of medicines.
Higher spending of specialty medicines did play into one other finding: the larger-than-usual jump in Medicare spending, which was driven by more seniors ending up in the “catastrophic” phase of Part D.
The NHE report – which also found that overall spending in the United States was up 4.6%, to $3.8 trillion – breaks out only spending at retail pharmacies, which means that other drug spending, such as hospital use of medicines, isn’t captured.
Vaccine Prices in Europe Get Leaked
On Thursday, Belgium’s Budget State Secretary Eva De Bleeker accidentally leaked the EU’s COVID-19 vaccine prices…in a since-deleted tweet. The tweet contained a chart of each vaccine and the respective price per dose. European prices range between €1-€15, roughly equivalent to $2-$18, and The Washington Post reports that the Pfizer/BioNTech, Oxford/AstraZeneca and Sanofi/GlaxoSmithKline vaccines are priced lower in the E.U. than in the U.S.
A European Commission spokesperson refused to comment on the leak, except to reiterate that prices are confidential and that vaccine developers contractually require secrecy over prices in their purchasing agreements. De Bleeker said the incident was “a mistake” made by the Belgian communications team.
340B in NYT and Objections from the AGs
The two things notable on the 340B front this week: the ongoing dispute moved into the mainstream, with a story in The New York Times that focused on the hospitals and clinics objecting to drug company actions to keep contract pharmacies – which manufacturers say aren’t eligible – out of the program. Also, in another show of how politically influential hospitals are at the state level, a bipartisan group of 28 state attorneys general – led by Health and Human Services Secretary-designate Xavier Becerra, the California AG – filed a lawsuit against HHS in an attempt to get the agency to impose fines on the drug makers if they continue the restrictions.
ACCESS: Pharma CEOs Should Step Up Globally
- Jayasree Iyer, executive director of the Access to Medicine Foundation, urged pharma CEOs to leverage their power to help solve global health challenges and expand access to medicines around the world, especially in low-income countries. In a Fortune op-ed, Iyer said that a fundamental shift is needed across the industry to challenge the “ingrained expectations of sky-high profit margins.”
- Rural Americans will likely have a harder time getting vaccinated against the novel coronavirus than their urban counterparts due to a weak health care infrastructure, vaccine hesitancy and a complex vaccine distribution process, Axios reported.
- “Trump Cards” that would give seniors a $200 credit toward prescription drugs is, Black Knight-style, not dead yet. Politico: Trump’s drug cards clear key hurdle following pressure from White House.
- Interestingly, only $29 million of PhRMA’s 2019 war chest was spent on federal lobbying. STAT: PhRMA took in a record $527 million in 2019, new records show.
- Hot take on the way that the 1984 law creating a generic pathway for medicines in the United States led to the current pricing environment. STAT (Alfred Engelberg Op-Ed): Unaffordable prescription drugs: the real legacy of the Hatch-Waxman Act.
- The evidence continues to mount that cash-strapped states are seeing a sizable bump in their health coverage responsibilities. Modern Healthcare: Medicaid And CHIP Enrollment Grew 5.6% Since Last Year.
- New treatments are coming, but for now, patients with spinal muscular atrophy are burdened with much higher expenses, mostly because of inpatient and outpatient services. SMA News Today: Financial Burden of SMA Much Higher Than Other Conditions, Analysis Shows.
- Timely profile on the company working to create the infrastructure to fix 340B (or break it, depending on your point of view.). FierceHealthcare: This health tech startup is trying to disrupt the drug discount system. Here’s how.
- The Value Report does not endorse finger-pointing on the issue of health care spending, but we should note that 2021 will be a big year for finger-pointing at hospitals. 60 Minutes gives a preview. CBS News (60 Minutes Feature): How a Hospital System Grew to Gain Market Power and Drove Up California Health Care Costs.
- Eli Lilly is making about a billion dollars a month (!) on COVID-19 therapies. Eli Lilly: Lilly Announces 2021 Financial Guidance, Updates 2020 Guidance.
- Looks like GoodRx is responding to Amazon’s entry into its space. FierceHealthcare: GoodRx launches telehealth service, free mail delivery as direct-to-consumer market heats up.