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- All the IRA: 'Negotiations' Begin, Judges Weigh In, Novo Sues, ICER Drop a White Paper
All the IRA: 'Negotiations' Begin, Judges Weigh In, Novo Sues, ICER Drop a White Paper
So I can't even get to obesity or copay accumulators until tomorrow
Brian Reid
October 02, 2023
Hoo boy, there is a lot out there. I’m going to focus on the IRA for this edition, but there’s some obesity analysis worth talking about, too. I’ll save that for tomorrow. Also for tomorrow: this late-breaking legal decision on copay accumulators.
Quite a day.
So today is one of those red-letter days when it comes to the implementation of price controls under the IRA. There are probably four broad items to be tracking on:
One: Yesterday was the deadline for companies to affirm that -- yup -- they’ll be taking part in the “negotiations.” Reporters have confirmed that all eight are in the game.
All of those companies need to submit the initial tranche of data to CMS today. Nothing that will become public, but the wheels are now rolling.
It’s worth mentioning (and more on this below) the unsuccessful effort by the Chamber of Commerce to shut the whole thing down while the legal system works through the nine lawsuits (and more than that below). A judge on Friday rejected the Chamber’s request to issue a preliminary injunction that would have stopped CMS from moving forward.
Two: Speaking of that legal order from Friday. It didn’t just toss the Chamber’s preliminary injunction ask. It offered a glimpse into its legal thinking about some of the Chamber’s core claims. And that thinking is not particularly aligned with the industry’s viewpoint.
A lot of the coverage noted the judge’s skeptical take of the Chamber’s argument that Medicare participation is so central to the business of pharmaceuticals that companies would be compelled to take part in negotiations, but the judge’s full thoughts are worth a glance (citations omitted):
The law established in the Sixth Circuit and beyond is clear: participation in Medicare, no matter how vital it may be to a business model, is a completely voluntary choice. Thus, the Program’s eventual “maximum fair price” cannot be considered confiscatory because pharmaceutical manufacturers who do not wish to participate in the Program have the ability—practical or not—to opt out of Medicare entirely. As there is no constitutional right (or requirement) to engage in business with the government, the consequences of that participation cannot be considered a constitutional violation. Because Plaintiffs are not legally compelled to participate in the Program— or in Medicare generally—they have not shown a strong likelihood of success on the merits of their due process claim.
Three: Speaking of legal action, Novo Nordisk got into the suing-the-government game on Friday, offering a four-pronged argument against the IRA.
Novo’s suit is an amalgamation of the other eight legal actions: there is some constitutional saber-rattling about the First Amendment and an argument that the informal way that the system is being set up is a Fifth Amendment due process violation.
The suit also claims, similar to the AstraZeneca effort, that CMS’ definitions of “drug product” are not particularly well-grounded in the law.
Four: Adding to the fun, ICER dropped a white paper, designed for the CMS process, on the evidence and cost-effectiveness of two “negotiated” drugs -- Eliquis and Xarelto. The group’s findings are made fairly clear in the press release, if you don’t feel like parsing the whole analysis.
In some sense, the conclusions are good news for Eliquis and Xarelto. Compared to warfarin, the long-time gold-standard blood thinner, both drugs are great deals and could be priced between two and seven times higher than they are now.
In another sense, though, the report lays bare a larger, fundamental issue with price controls: the process doesn’t seem to be based on any sort of value-driven approach. It’s not clear that CMS will give a high-value medicine any additional consideration versus a lower-value drug.
So ICER’s thinking may be well and good, but it raises an uncomfortable question: does value matter? I know what the answer should be.
SCAN, a health plan for Medicare Advantage, told Axios it will make 13 common brand-name meds -- including six of the drugs facing price controls -- available for an $11 copay with no prior authorization, paying for the benefit out of the company’s profits. I’m not sure if this is a trend or a stunt or what, but it’s certainly worth watching.
Last week’s CBO report on the rather dramatic inability of CMMI to control costs caught the attention of the Washington Post’s Megan McArdle, who went after the organization in an op-ed today. I find the whole CMMI thing fascinating because the challenge seems to be less in finding novel, effective cost-saving interventions and more in handling the inevitable attendant ox-goring.
Newt Gingrich has issues with the IRA, which I guess isn’t really a surprise.
J&J is making further concessions when it comes to patents on its TB meds in low- and middle-income countries. STAT has the details.
If you’re into the debate about white/brown bagging versus buy-and-bill, here’s a link to a new paper that quantifies the savings to insurance plans and patients from white/brown bagging. If you’re an insurance company, you’re saving about $2,000 a month per patient with bagging. But if you’re a patient, your out-of-pockets are higher. If you’re not into the debate but want to catch up, this KFF Health News article from earlier in the year is pretty good.