Looking for Your Guess: When Will CMS Announce IRA Prices?

Programming Note: The Curve is off tomorrow. Hoping that CMS doesn’t ruin that for me.

The first round of IRA price controls is all over but the shouting. The process has officially concluded. Prices are set. The only thing left is for the government to announce those prices.**

The big question still remaining is when CMS is going to make that announcement. The thinking is that the unveiling of price is going to be a big deal, with a press conference and infographics and balloons and a marching band, maybe. After all, this is a salient campaign issue. 

I haven’t talked to anyone who has anything more than a guess here, so I want to turn this over to you. When do you think that the announcement will come?

** I mean, technically, this all ends when the prices go into effect, which is still 16 months away. I sometimes lose sight of the fact that implementation is pretty far in the future.

I flagged this Avalere/Community Oncology Alliance study yesterday without having gone through it in detail. (It dropped close to my deadline, but I didn’t want you all to miss it.)

Upon closer examination, it’s important work, if not particularly surprising. As I noted yesterday, the main conclusion is that PBMs are now woven into the fabric of the 340B program. They own or control more than two-thirds of all contract pharmacies in the program, including nearly half of all mail-order pharmacies. 

Again, in a world in which a huge number of pharmacies are vertically integrated into PBMs, this is not particularly shocking. But it’s nonetheless illuminating because it gets us one step closer to the critical question: how much money is leaking from the 340B program to for-profit entities? 

The answer there is almost certainly “more than anyone wants,” but quantifying that is tricky. So is finding a solution. 

But the first step is to raise the issue and ask the question. 

Which is exactly what COA Executive Director Ted Okon did in announcing the results: “The exploitation of 340B by for-profit corporations and their PBMs is alarming and unacceptable. These findings underscore the urgent need for legislative and regulatory reforms to prevent PBMs from further undermining 340B, a broken program in need of serious reform.”

I’ve kind of had it with the media coverage of how pharma executives don’t think the IRA is a big deal, largely because cherry-picking a couple of quotes about how the initial round of “negotiations” are “manageable” doesn’t really give the reader much useful context. 

But what makes me more frustrated is a piece like this one, from The Hill, which states bluntly, in the headline “Drug companies confident Medicare price deals won’t hit bottom lines.” That is, frankly, wrong. The IRA is absolutely going to hit the bottom lines of the companies with medicines up for negotiations. 

That effect is -- by and large -- already accounted for in company forecasts and analyst expectations. When companies talk about successfully navigating price controls, they’re suggesting that the impact won’t be meaningfully worse than expected. They’re not claiming there’s no damage at all. 

Rant over. 

Elsewhere: 

• We’ll probably get a Senate 340B bill tomorrow, according to Axios. No details on what will be in it. As a reminder, the discussion draft took a very YOLO approach to contract pharmacies and punted on the definition of “patient.”

• Since it’s a big day for internal polls, you should vote in this one, from Rep. Jake Auchincloss, on the best way to change PBM behavior.

• Novo Nordisk’s IRA lawsuit was tossed by the same judge who had, earlier, rejected arguments from J&J and BMS. So no real surprise there. But Bill Sarraille flagged on LinkedIn that the Novo suit has one wrinkle -- the definition of “qualifying single-source drug” -- that might make for an interesting issue on appeal. 

• The failure of the Humira biosimilars market is evidence that PBMs should be broken up, according to a STAT First Opinion by Juliana Reed, the executive director of the Biosimilars Council, which laid out the history of the broken market well. 

• The best evidence that the economics of gene therapy is really, really hard might be this piece in the Economist, where the problem is elegantly defined … and then it becomes clear the author has no idea what a practical solution looks like. No easy answer here. 

• Mark Cuban has a simple idea to drop drug costs by 30% across the board: force every PBM or PBM-like object to “publish their un-redacted contracts, for all to see.” I’m here for it.

Thanks for reading this far. I’m always flattered when folks share all or part of Cost Curve. All I ask is for a mention or tag. Bonus points if you can direct someone to the subscription page.