ICER Is Tackling Launch Pricing. I'm Wishing Them Luck. They'll Need It.

Fair warning: the rest of the week might be heavy on 340B. It’s a topic that is very hip, very 2025.

ICER has decided that its next big research effort will be a “Launch Price and Access Report.” 

This gives me a lot of feels, and I should probably lead with my conflict of interest here: I’m focusing my big research effort on the same thing, so I suppose that Sarah Emond is now my blood enemy.**

NPC’s John O’Brien is already out with a brief LinkedIn post that said he was “skeptical,” and I can understand why.

Launch prices are tricky for a thousand little reasons.

• They’re not particularly consistent in how they are disclosed (this is my lane!);

• They reflect a lot of hard-to-standardize metrics (including value and population size);

• Access decisions in the early going are often divorced from patient benefit and complicated by patient assistance approaches;

• Teasing out net prices of recently approved drugs is, I suspect, essentially impossible. 

All that said, I also believe that launch prices are now the key variable in the drug pricing debate, and no one can afford to just say “it’s too hard” and ignore the whole thing. But it calls for a tremendous amount of nuance to keep the whole thing to be weaponized, even when intentions are good. 

On the bright side, ICER is going to do away with its “Unsupported Price Increases” report, which has long been a flawed and quixotic effort that sounds good in theory but is impossible to pull off in practice, as well as its “Fair Access Report,” another project where ICER’s reach exceeded its grasp. 

I hope that the launch price effort doesn’t end up in the same bucket. 

In the meantime, I’m going to get cracking on my own content here. The more voices in this marketplace, the better!

** This is a joke. I may take issue with ICER in this newsletter a lot, but I have a tremendous amount of respect for what Sarah is trying to do. Big fan of her willingness to engage, too. Would that we could have more people like her in this space.

The most fascinating legal battle you’re not following is the 340B/Sagebrush saga. I mentioned it first on Dec. 30, when most of you were still loopy on eggnog, so no worries if you missed it. (It also hasn’t received much attention, which is unfortunate. Credit to 340B Report and Endpoints Max Bayer for keeping an eye out.)

The short version is that Sagebrush is a “boutique health system” (their words) out in Nevada. Normally, a “boutique health system” -- Sagebrush also called themselves a “nonprofit foundation that collaborates with specialty care clinics” -- wouldn’t be eligible for low-cost 340B medicines. But Sagebrush has a government contract to provide STD services, which -- presto -- bestows upon them 340B status. 

Sagebrush then affiliated with a number of other for-profit providers, mostly in rheumatology, offering them access to its 340B prices as “subgrantees.” This meant that millions in discounts were flowing to providers whose link to 340B was allegedly tenuous. 

The “alleged” part of this is a reference to a lawsuit filed last month by Amgen, Lilly, and UCB asking HRSA to tell Sagebrush to knock it off with the subgrantees and make the companies whole for the (allegedly) misgotten discounts. Which HRSA subsequently did. 

Anyway: Sagebrush struck back last week with its own lawsuit against HRSA, claiming that its STD contract isn’t hiding the ball, and that the subgrantee clinics are clearly spelled out, and -- therefore -- no one is doing anything wrong. 

The Sagebrush action against HRSA also quantified the extent of the 340B benefits: “tens of millions of dollars,” a number big enough to force Sagebrush out of business. 

As usual, I don’t have a viewpoint on who is in the right here, legally. But I don’t think it’s controversial to suggest that rheumatology clinics partnering with “boutique health systems” that are located 2,000 miles away on STD programs in order to generate “tens of millions of dollars” in revenue is not what 340B is designed to do. 

The lawsuits aside … All of this back-and-forth underscores the foundational reality of 340B: Whatever you think the purpose of 340B is, it’s now being used in ways that are pretty clearly coloring outside the lines of the purpose.

• If you want executives sounding “sanguine” about the Trump administration, Bloomberg has you covered, both with this post-JPM25 wrapup of comments as well as this summary of a Bloomberg TV hit from Vas Narasimhan of Novartis. 

• USC Schaeffer’s Darius Lakdawalla thinks that “negotiated” prices in Medicare should have a value-set “floor” in addition to any “ceiling price” that is established. That would help ensure that high-value medicines aren’t unduly punished, dampening the innovation that patients so badly need. Realistic or not, this would be a fascinating conversation to have. Are we willing to start weighing how “serious” a condition is when determining value? 

• Adam Fein’s annual look at formulary exclusions is now live and … the era of out-of-control growth is over? It looks like we’ve reached -- at least temporarily -- a limit to how many meds PBMs are willing to boot off of formularies. The dark cloud at the center of that silver lining: Adam looked at the biosimilars market in light of formulary placements and deemed its prospects pretty grim. All-around great read. 

• Speaking of biosimilars, Andrew Bourgoin just launched his consultancy, which includes a subscription service for his insights. If you’re in that part of the business, check him out. 

• Democratic senators don’t want Donald Trump to “pause” Medicare negotiations, per a new letter. They’re responding to some off-hand comments from Lilly CEO David Ricks at JPM25. I wasn’t really sure what Ricks was driving at, so all of this feels a bit like shadowboxing.

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].