A 20-Minute Anti-Pharma Rant You Probably Need to See

If you want to search Cost Curve back issues or link to anything you read here, the web links and archive are online at costcurve.beehiiv.com. You can subscribe there, too.

There isn’t much to say about Bernie Sanders’ announcement that he is going to investigate Novo Nordisk around the pricing of its GLP-1 medicines. You can read his press release here. The media coverage is pretty shallow. You can probably skip it. 

The letter he sent to Novo’s leadership has more details on the questions for which Bernie seeks answers, but it seems unlikely that there will be anything illuminating in the answers. That doesn’t mean that it will be painless or free of embarrassment for Novo. I just can’t imagine there is a smoking gun. 

Novo’s answers as to how it prices its medicines is likely to come down to some sort of repeated variation on, “they’re priced where they are because of the value they deliver.” That value has been pretty well validated -- I’m not aware of any cost-effectiveness analyses that don’t peg these meds as a good deal -- so it’s not clear what Bernie would do with that. 

This is where I put in my usual boilerplate that the budget issues are real, a broad conversation about tradeoffs is needed, yadda yadda. Whatever the Sanders thing is though, it’s not that conversation.

It’s worth taking 20 minutes out of your life to listen to Ralph Magrish, the executive director of Oregon’s prescription drug affordability board, who went on an extended rant against the pharmaceutical industry last week. The video is here, and the diatribe starts at about 33:10. 

The impact of PDABs on consumer prices is complex and somewhat speculative. It requires a fairly nuanced understanding of the drug supply chain and, especially, a sense of game theory about how payers will react. There’s been a lot of thoughtful work here -- much of it insulted by Magrish -- that’s well worth considering with an open mind if we are to avoid dangerous unintended consequences.  

I can’t imagine anyone will be particularly surprised at Magrish’s underlying cocktail of anti-pharma talking points, the oversimplification of the supply chain, or his dismissiveness toward the communities raising concerns. It’s all in the game, right? 

Still, it can’t just be ignored. There are two ways to think about responding. 

One is to do a blow-by-blow fisking of Magrish’s arguments, which are stitched together innuendo and ad hominem attacks without any meaningful data or analysis. Much of what he says is unsupported, if not entirely wrong. But I’ve been pretty verbose this week already, and that would take up a lot of space. (But if you’re a journalist or a policymaker or an advocate and want the chapter-and-verse about where Magrish’s assertions go off the rails, let me know.) 

The other way to think about this is to point out that Magrish is not just some pharma scold banging pots and pans together. He’s the executive director of a critical board who hates the industry so much that he floated the idea of leveraging his authority to get the state of Oregon to divest pharmaceutical stock from state investments portfolios.

He’s a guy who is explicitly denouncing the idea that higher value interventions should have higher prices … and who has the power to try to split value and price.

In short, he sure doesn't sound like someone thoughtfully considering the complexities here. He's on a crusade against pharma, dialogue (and evidence!) be damned.

Obviously, industry needs to be worried about this guy. But if I were a patient -- especially a patient on (or in need of) a high-value therapy -- I’d be scared out of my wits. This isn’t a sober discussion about tradeoffs. It’s an all-out assault on the history’s biggest engine of medical innovation.

Gird your loins.

• Of all of the ways that health care is being broken for profit, maybe none is as brazen as “alternative funding programs,” where an insurer will exclude coverage for a certain drug any then seek charity care for the “uninsured” patient. So it’s nice to see two members of Congress asking the Department of Labor to maybe check the legality of the practice. 

• There are two new stories out today pegged to the battle over obesity-drug coverage in North Carolina. The NBC News one is probably a little better than the USA Today one because it has one interesting nugget: the price the state is seeking is $300 a month. But both pieces cover well-trod ground and don’t really shed much new light on the issue. I have no proof of this, but I’m wondering how much of this drama is just a vehicle for Dale Folwell, the North Carolina treasurer, to make himself more famous and/or politically viable. 

• Speaking of story pairs, there are two biosimilars pieces out today. This one, by Oliver Barnes from Financial Times, is an excellent overview of what’s going on in the Humira biosimilars market. The other one, from STAT, looked at research on patient out-of-pocket spending on biosims. If that article sounds familiar, it’s because we talked about the same research here, like, a month ago. 

• And while we’re talking biosimilars …  it’s always interesting to see how different parts of the health-system frame their decisions to the lay public. So this piece about CVS Caremark’s approach to Humira biosimilars is worth the read. It doesn’t get into the dark arts of vertical integration or “rebate credits” (nor would I expect it to), but it shows how the company wants its decision to be viewed. 

• The lawsuit accusing Johnson & Johnson of selecting a health plan with ridiculously high prices has been a huge boon for smaller, new-model pharmacies and PBMs. I wrote back in February about how Mark Cuban’s pharmacy was contrasting their prices with the inflated J&J contract. Now SmithRx is doing the same thing, putting their prices side-by-side with the J&J prices. Smart marketing!

• The government of Colombia is breaking the patent of dolutegravir, an HIV medicine from ViiV/GSK, per STAT reporting.