APEX | A New Reuters Analysis of 2024 Launch Prices Doesn’t Say What Reuters Thinks It Does

INFLECTION POINT/ Collapsing a Year of Launch Prices Into a Single Numbers is Fraught

Every year, Reuters runs a story that purports to show how launch prices are getting bigger year over year. This year’s version just hit. 

In one sense, it’s a noble effort because launch prices are indeed important, and understanding how they change over time is key to understanding the broader landscape of drug prices. 

But what Reuters does -- looking at a small group of 50 or so wildly disparate drugs and drawing conclusions -- is lousy journalism and really terrible science. 

There are two reasons to look at data gimlet-eyed. 

The first is philosophical, the second logistical. 

First, the philosophy. Drug prices in the United States are, for all practical purposes, driven by two variables: The value the drug delivers and the size of the patient population. If those variables swing, so do drug prices, especially the patient population variable. 

So the Reuters numbers are largely a reflection of whether new drugs were aimed at smaller patient populations. The 2024 numbers were higher, so the natural hypothesis ought to be not “I bet drugs are more expensive” but rather “I bet there were a lot of orphan drugs in the sample.”

And, sure enough, Reuters found that 72% of meds approved in 2024 had an orphan designation. This doesn’t get explored at all in the piece, beyond an aside in a quote. But that’s really the whole game. We now have a new-drug armamentarium that is aimed at rare diseases.

“Is orphan drug development in balance with our public health needs?” is a reasonable public policy question, but that is very different from the question of whether prices are too high. I don’t think Reuters gets that. 

The logistical issue is that this kind of analysis is very sensitive to small numbers, so the math is fraught. When you carve out one-time treatments (cell and gene therapy, stem cell approaches), the median price of a new med plummets by more than $100,000. 

Heck, the Reuters numbers would have been meaningfully smaller if they’d just removed from the analysis the one medicine that has been pulled from the market for sales reasons. 

And that’s leaving aside broader questions about net price and access, which also play into the pricing conversation. Reuters doesn’t care about that. They care about having the biggest possible number in the headline. 

I’ll end with the caveat I always make on this: This is a topic worthy of exploration. Launch prices are almost certainly rising. Understanding how and why is a great research question. I may have methodological quibbles, but the JAMA effort here contributes to our understanding of the topic. I’m also excited for ICER’s deep dive. 

But the Reuters effort is clickbait. I would love to ignore it. I hope others do. 

TRAJECTORY/ The Lessons of Genmab’s Epkinly

Today’s Launch Price Comms Report focuses on Epkinly, a cancer drug from Genmab. Though that medicine’s price was announced reactively, the company clearly has its messaging buttoned up, successfully compressing down a complicated dosing schedule to a single number that was understood by the outlets that covered price. 

REBOUND/ MFN MFN MFN MFN

If, at some point, I’m found in an empty alpine hotel writing “all work and no play makes Brian a dull boy” over and over on a vintage typewriter, please know that it was the MFN stuff that pushed me over the edge. 

Sadly, I’m only writing on this because it’s still relevant. We’re having a national discussion about the topic. We’re well beyond “What does the executive order mean?”

Anyway: PhRMA just launched its big campaign on the topic, called Balance the Scales. It’s good work that makes a basic -- but generally overlooked --  point, which is that the first step in getting to lower prices is addressing the giant need to correct the structural issues in the American health care that encourage higher prices. 

The PBMs are getting in the game, too. Evernorth pushed out this piece. To be honest, I don’t entirely understand what’s going on in it. The headline says “Most Favored Nation policy cannot succeed without the pharmacy benefit,” but the post is mostly about taking potshots at pharma, so I don’t know if Evernorth is scared or pumped or what. 

And we’re getting more and more Democrats crowing about legislation to push the MFN idea forward, though I haven’t seen any text. There’s a press release on Ro Khanna’s effort, but the details provided there don’t seem to suggest that there has been deep thinking folded in. They’re just riding the wave, which makes sense, I guess. 

QUICK TURNS/ OOPS in Obesity, the FDA and Importation, and a Petition Worth Signing

ngl: I admire the chutzpah of Cigna/Evernorth, which has rolled out a new coverage option for obesity meds. The PBM will offer health plan clients the ability to include the medicines on their formulary, and employees will have access to the meds, with out-of-pockets capped at $200 a month. Bloomberg has the details.

Yes, that’s lower than the cash price, but -- damn -- that’s a lot of cost-sharing for an insured patient. I don’t know if Evernorth gets points for creative approaches to coverage or demerits for finding a way to create a high-out-of-pocket paradigm under the guise of a “less than cash!” marketing ploy. 

ELSEWHERE: 

• FDA is going to work to make state importation plans easier to complete. Importation as a solution to drug prices remains dumb/unworkable, but it probably polls too well to think we’ll ever be done with it. 

• STAT’s Ed Silverman has a piece on the limits of pharma company efforts to improve global access to insulin. I’m not certain what the solution here is -- there seems to be a will, so I assume there is a way.

• No Patient Left Behind has a new petition to encourage policymakers to correct the pill penalty and re-balance incentives around small molecules and biologics. My name is on it, along with about 400 other people at last count.

• This is a little outside of my lane, but Steven Grossman at FDA Matters has an important thought on the ongoing conversations about large-scale compounding, noting that if there’s not an effort to tighten that up, we’ll be in uncharted territory. “Manufacturers would be regulated. Mass production compounders would not. That doesn’t sound good for consumers or innovators…and it really isn’t.”

• The Incubate Coalition has a new tracker that seeks to tie manufacturer decisions to walk away from orphan drugs to the policy environment.

Cost Curve is produced by Reid Strategic, a consultancy that helps companies and organizations in life sciences communicate more clearly and more loudly about issues of value, access, and pricing. We offer a range of services, from strategic planning to tactical execution, designed to shatter the complexity that hampers constructive conversations.

To learn more about how Reid Strategic can help you, email Brian Reid at [email protected].