Digging Into Paragon's Policy Ideas for Hints About Where Trump 2.0 Will Go on Drug Pricing

I am not a fan of the sound of my own voice (is anyone?), but I appeared on Stacey Richter’s absolutely wonderful Relentless Health Value podcast last week. Stacey is a lovely human and a great interviewer, and we had a constructive conversation about how pharma should be thinking about policy communication. 

My broad point was that there are a number of topics where there is near-universal consensus, and where pharma turning up the volume would be advantageous: ensuring patients aren’t exposed to list prices, making the tradeoffs around benefit design more explicit, and raising the alarm about consolidation in the provider and payer spaces. 

You can listen to the episode here, but you’d really be doing yourself a favor if you subscribed.

I don’t have a lot new to say about J&J’s latest effort to force change in the 340B program, but I wanted to flag that the effort is getting a lot of media attention. 

In the newsletter yesterday, I flagged the WSJ coverage. But there was, shortly thereafter, a piece from STAT. Bloomberg Law is also on the case. Ditto Reuters and Pink Sheet and Politico.

None of the stories have much perspective beyond the legal filing itself and some commentary from J&J (the company’s position is stated on its website), but it remains significant that the press is giving the topic oxygen. 

I was disappointed that so few reporters bothered with the HRSA annual numbers last month, and this gives me a little more hope that 340B is moving from invisibility to everyone’s peripheral vision, which is a step in the right direction.

Yesterday, I published a somewhat snarky, definitely cynical piece on Project 2025’s take on drug pricing, suggesting that the issue was an afterthought in that particular conservative manifesto. 

But no one ever claimed that Project 2025 was the definitive take on thoughts from the right, so I wanted to keep digging. 

Indeed, when it comes to health policy on the right, the loudest group hasn’t been Project 2025 or its sponsor, the Heritage Foundation, but rather the Paragon Health Institute. Paragon’s president, Brian Blase, keeps getting mentioned for top Trump administration posts, as do Joe Grogan and Paul Mango, two of the group’s public advisors. 

So taking a spin through Paragon’s materials may be more useful than looking at Project 2025. 

For better or worse, Paragon doesn’t present its thinking in as recommendation-focused a way as Project 2025, but there is a lot more info to digest on the Paragon side. Most of what Paragon has produced is analytical, as opposed to prescriptive, but that doesn’t mean that there’s not an angle. 

Perhaps the best summary of the group’s thinking came during a September hearing on the Hill, where Paragon’s Private Health Reform Initiative Director Theo Merkel testified. The Paragon summary of his testimony is here, and it’s illuminating. 

Merkel makes the now-standard points about ACA subsidies, which is outside of the strike zone of this newsletter, but he pivots to attacks on CMS’ effort to stabilize the Part D program from the effects of the IRA, calling it “an expensive abuse of vague statutory language.” Merkel called for the demonstration to be canceled. 

The Paragon thinking, as outlined by Merkel, is that the current Part D program works well in driving down costs, without the IRA’s whole price-control apparatus. 

Part B is another matter, and Merkel suggested a complex approach to bringing more competition to that market through an annual negotiation between Part B drugmakers and Medicare Advantage plans that would be the basis for setting prices for the program as a whole. 

And his testimony picks apart what is arguably the best-known and most popular part of the IRA: the $35 insulin cap. In Merkel’s review of the program, he suggests that the discount was made possible by a less-than-ideal shifting of costs from manufacturers to beneficiaries and taxpayers. 

That’s the tip of the iceberg. Pick a topic, and Paragon probably has a view. They’ve published a piece skeptical of broader Medicare coverage of GLP-1 drugs, where it views the costs as too high to overcome uncertain long-term benefits, and they have a 340B 101 page that includes a call for more transparency and higher standards for participation. 

All of this carries with it major “to be sure” vibes.

I don’t think Paragon can be assumed to speak with a singular voice. It’s not clear how these various interests (along with topics beyond drug pricing) are prioritized. Many of the policy ideas would be politically difficult to make real.

That said, as an ideological framework, it’s certainly more thoughtful and more real than what Project 2025 put forward on these issues.

This is worth tracking: the Leerink Center for Pharmacoeconomics, or CPE, is beginning to run cost-effectiveness analyses for new medicines, offering yet another perspective on value. 

The first medicine that the group -- led by Melanie Whittington -- put under the microscope is BMS’ new schizophrenia drug, Cobenfy. By the CPE math, which looks at a range of factors that go well beyond the clinical impact, not only is the drug cost-effective, it’s actually delivering savings to society. 

The CPE effort is built around a new publication in Forum for Health Economics and Policy titled “Valuing the Societal Impact of Medicines and Other Health Technologies: A User Guide to Current Best Practices,” which includes an expansive definition of value that drills in on all of the aspects of the famed “value flower.” If you have a favorite health economist, chances are they’re an author on the paper. The “User Guide” deserves a much closer look, and I’ll get to that at some point in the next week or so. 

ELSEWHERE:

• It has long been the official stance of this newsletter that the “patient listening sessions” that CMS conducted as part of its “negotiation” process were fairly useless. Now we have some data: NPC has analyzed those sessions, finding that, indeed, participation was thin and the amount of time spent discussing the issues of importance was a lot more minimal than it could have been.

• The National Association of Manufacturers is readying an ad blitz of sorts** for lame-duck PBM reform. The campaign itself is probably less significant than the fact that NAM -- along with PhRMA, per Monday’s newsletter -- is gearing up for this battle. Shit is getting real. 

• New Drug Price Alert: Autolus won approval for a new CAR-T therapy, Aucatzyl. The treatment carries a one-time cost of $525,000. The company announced the price on an investor call. 

** NAM is presenting this as a “seven-figure” campaign, which was a phrase that used to drive my erstwhile colleague Gary Karr nuts. Gary’s view, and I sympathize, is that everyone thinks that “seven figures” sounds better than “$1 million,” but -- in reality -- no one is particularly fooled.

Header image via Flickr user Jess J.

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