CMS Drops Its Price-Control Guidance and Ruins Everyone's Weekend

Lots to talk about this morning, as I feared. I appreciate you all reading this rather than getting the a well-deserved early start on your long weekend.

I have to level with you: CMS dropped their guidance on how they’ll implement price controls under the Inflation Reduction Act, but I haven’t actually read the whole 198-page thing.

It doesn’t look like anyone in the media has fully parsed the document, so I guess I’m not that far behind. I’m sure there will be better coverage shortly after this hits your inbox.

And -- yeah -- I’ll end up writing about this on Monday.

For what it’s worth, CMS, in its release, called out three changes from its initial guidance:

1. “Clarifications of how CMS will identify selected drugs (e.g., CMS will only consider active designations and approvals when evaluating a drug for the orphan drug exclusion)”

2. Some additional details on how the process will work, including a note giving companies permission to publicly discuss the “negotiations”

3. Additional details on “additional opportunities for drug companies and members of the public to engage with CMS during the negotiation process”

That doesn’t sound like much of an overhaul of the original guidance. I suspect it’s not going to mollify a single person with concerns, and I assume that this will be a green-light to anyone waiting to see final guidance before suing the government.

Hang on. The ride gets bumpy from here.

Last week, I gave Saretpa an A+ when it came to communications around the pricing of its gene therapy for Duchenne muscular dystrophy.

This week, I am learning why college professors tend not to give out super-high grades … it doesn’t leave any room to reward other kinds of high performance.

Biomarin’s announcement yesterday around its gene therapy was also incredibly well executed. I don’t know if they did a better job than Sarepta, but they really nailed some launch-price best practices. (As a reminder, I laid out six best practices last week.) Some highlights:

• The company was transparent with the price (best practice #1): $2.9 million.

• The company explained the math (BP #2), at least somewhat, noting the price of standard therapy at $800,000 a year. Though I don’t think they had a peer-reviewed paper to fall back on, it’s not hard to do the cost-offset math and determine that Roctavian is a good deal.

• Biomarin not only noted the net price of the medicine, about $1.9 million (BP #3), they explained where most of those discounts are expected to flow: to the 340B program.

• And they were specific on some of the access dynamics (BP #6), talking about their warranty program and the fact that they will be the first commercial product to use new rules allowing for multiple “best prices”.

Most of this came in their earnings call, with the net price and the warranty bit noted in some of the coverage.

• The CDC has a report out detailing how lousy we are at curing hepatitis C in the United States. STAT’s coverage is particularly good (love it when summer interns bring the heat). Hep C remains the poster child for how terrible the government is at handling those cases where high cost-effectiveness runs into large budget impacts.

• Peep this poster -- shared by NPC’s John O’Brien -- on the impact of state laws banning the use of accumulators and maximizers. The upshot is that patients end up spending a lot less money and having better adherence, which seems like a policy win to me.

• Axios has a piece pointing to a lack of pharma support among the group of guys likely to be president in 2024, saying the industry is “without a friend in the White House.” But I’m trying to remember when industry has ever had a friend in the White House. Bashing pharma, sadly, has always been good politics.

• But the time you get your next Curve, a bunch more Humira biosimilars will have hit the market. Reuters tried to figure out what will happen next, but the outlet came up kind of empty (there just isn’t enough pricing data about the next crop of biosimilars to draw conclusions).

• Takeda’s CEO, Christophe Weber, is on the warpath about the risks of government regulation of pharma, telling Bloomberg “If you push too much you reach a point where you’ll impact the ability to invest in R&D and innovate. You cannot just close the eyes and squeeze the price, it doesn’t work.”

• On a less hectic day, I’d spend more time parsing this lengthy Barron’s piece on why drugmakers charge what they do. The upshot is that industry is pricing according to the value delivered, though that’s not a straightforward process. Still, it’s worth acknowledging that “we price to value” is not a perfect answer to the question posed by the article’s headline: “A Drug for Itchy Dogs Costs $1,200. Why Is the Human Equivalent $43,000?”