Bernie Will Get CEOs to Capitol Hill; NC Will Not Get Obesity Meds to Its Beneficiaries

Gird your loins, everyone. 

We’re about to have the most intense 10 days in DrugPricingLand in quite some time. We’re due to have the first oral arguments over a core Inflation Reduction Act lawsuit on Wednesday. On Thursday, companies get their initial bids, which -- though confidential -- are still a BFD. And, as noted below, Feb. 8 is the day for the Bernie Sanders show trial, which will include at least three pharma CEOs. 

And that’s assuming nothing else weird pops up. Three other lawsuits are awaiting a decision or the announcement of an oral argument. 

And, yeah, it’s earnings season, too. 

Queue the Airplane jokes.

Bernie’s campaign to drag pharma execs to Capitol Hill so that they can be dragged a second time while on Capitol Hill was a success: the CEOs of Merck and J&J will indeed testify before Sanders’ Health, Education, Labor, and Pensions Committee. The show trial is scheduled for February 8. 

It’s going to get a lot of coverage. 

The challenge for industry will be keeping the focus on the actual topic that Sanders has selected: the difference in prices between the United States and the rest of the world. The U.S.-vs-ex U.S. conversation is one where industry has fairly defensible positions. (Unfortunately, those positions are very, very complex, and “complex” doesn’t usually go over well in congressional hearings.)

This is something that I’ll be writing more about over the course of the next couple of weeks because I think it will be important to outline the underlying dynamics of why medicines cost more in the United States, what kind of “price” we’re talking about, and exactly what the tradeoffs are. 

So stay tuned.

The state of North Carolina is going to stop covering obesity medicines. This is not a surprise: the state has been thinking about this -- and talking about this -- for months. And it’s a worthwhile move as an example of how different payers/employers are looking at ways of managing budget impact. 

But the decision is worth watching for a second reason: North Carolina tried like h*ck to politicize the whole thing and use public pressure to get drugmakers to drive costs lower. (This press release from the state treasurer gives a sense of the way that NC was trying to exert pressure.) 

It wasn’t a particularly well-thought-out or successful campaign … I mean, I get the feeling that a supplemental rebates of another 10% or 20% wasn’t going to change the underlying reality, but it did show that the initial reflex for a lot of folks, especially politicians, will be to hang this on drug companies, even though it’s increasingly clear that the medicines are a) falling in price, and b) from a value POV, “worth it.” 

The budget impacts here are real and the issue can’t be can’t waved away. But it’s a reminder that industry needs to be upleveling the discussion to make clear that this is about prioritizing benefits, not the value of meds themselves. Because, otherwise, the easy move here is to just bash price. 

There’s a third reason why North Carolina is interesting, too, and that’s the fact that the underlying math here was accidentally made public. So it’s easy to understand the exact, post-rebate state of play there, which is illuminating in its own way.

This op-ed from the head of Cigna’s Evernote/Express Scripts unit -- which includes the company’s PBM -- should get some interesting reactions. It focuses on the role of PBMs in blunting the impact of beginning-of-the-year price hikes from pharma companies. 

For those not paying attention, it’s a straightforward defense of the most important service that PBMs provide: using their scale to drive down prices. 

But those inside the industry are going to be tempted to clown on this hard. After all, some (most? all?) of the reason that there are big beginning-of-the-year price hikes is to allow companies to give the PBMs what the PBMs want: ever-larger rebates. 

For PBMs to claim the moral high ground is kind of laughable, but it’s probably good PR. 

• This is almost a really good look at the impact that sickle cell disease gene therapies will have on the Medicaid program, where a sudden wave of demand for multi-million dollar one-time treatments has the potential to swamp systems. It gets into a lot of important points, like the coming federal solutions and the outcomes-based efforts from manufacturers. But it doesn’t explore one hard-to-define element that would help put this all in context: exactly how much of this stuff will actually hit the books. I’ve seen at least one analyst comment on the possibility (a “potential surprise”) that Vertex won’t treat a single patient with Casgevy this year. That doesn’t mean this shouldn’t be an important topic to discuss, but there are definitely some environmental pieces worth weighing, too. 

• Two insulin pieces worth reading back to back: first, check out this MedCity article about the promise and reality of the insulin biosimilar market, which emphasizes that -- politics aside -- it’s hard to make money on insulin. And then read this piece about Novo pulling Levemir from the market (in part because it’s hard to make money on insulin). Unspoken is the reality is that anyone could come in and get a biosimilar Levemir approved and capture that market … but there’s no way to do it without taking a bath financially. 

• I’m not 100% sure that I’m following this Politico story that suggests that the Biden administration is backing away from its previous support for WTO efforts to erode patent rights. I’ll keep an eye on this because if the United States is indeed willing to stand up for IP, that would be a (welcome) pivot.

• Leaving this, from Politico, here without comment: “Kirk Williamson will be executive director of the New Hampshire Prescription Drug Affordability Board. He was health care manager of the drug pricing and clinical trials portfolio at Arnold Ventures.”