New PhRMA Research Defines How Post-Approval R&D Is at Risk

If there are any Curve readers who will be down at the American Society for Preventive Cardiology meeting in Dallas later this month, I’ll be speaking on “The Drug Pricing Heat Wave” panel during the town hall a week from Friday. Say hello!

Scheduling Note: Cost Curve will (probably) not publish for the remainder of the week. I’ll still do a weekly wrap next weekend over at LinkedIn. Otherwise, see you next Monday.

There is new research out of PhRMA that provides a deep look at how nine big-time, life-extending cancer medicines only became big-time, life-extending cancer medicines because drugmakers continued to invest in research even after the medicines were on the market.

PhRMA is beating that drum because one of the unintended consequences of imposing price controls -- especially for small molecules, though the point even holds for biologics -- is that companies will be essentially punished for continuing R&D later in the lifecycle of a drug.

But the idea of major development happening after a medicine is on the market can be hard to think about without concrete examples, so PhRMA breaks it down, laying out five kinds of post-approval insights that can be generated, from better understanding of benefits within an approved indication to use in additional tumors types to use in biomarker-based treatment.

The report frames these five ideas in the context of some medicines you’ve probably heard of, including Keytruda, Yescarta, Enhertu and Xalkori.

HHS did a lot of math on the impact of the $2,000 out-of-pocket cap in Medicare Part D, concluding that seniors will save a collective $7.4 billion in out-of-pocket payments in 2025. (Here is Endpoints’ summary, if you don’t want to pore over the minutae.)

It’s worth getting into the numbers, because it’s clear that this is both a hugely impactful change, but also one where the benefits are going to be concentrated among a very small group. That’s not a complaint, just a reminder.

So who benefits? At the risk of stating the obvious, people with really high drug bills. About 1.6% of the non-low-income subsidy beneficiaries stand to save more than $1,000. The report goes into further details, and my favorite chart might be Table C10, which gets into which drugs tend to generate high OOP spending. Patients taking those meds are likely to be big winners (as would those manufacturers, I would think).

• I like seeing credit where credit is due, so I was tickled to read Kyle McCormick’s take on cash-pay pharmacies, seeing as he is really the guy who got that ball rolling (even if some other guy seems to get more of the attention).

• It really doesn’t matter for the 340B conflict with pharma companies, but HHS has come up with a draft plan on how it is going to pay hospitals back $9 billion in 340B underpayments under a Trump era rule that the Supreme Court overturned last year. It involves paying back all of that $9 billion straightaway, then cutting hospital payments in other ways for the next 16 years to pay for it.

• Warning: we’re going to start seeing reporters without a lot of pharma experience (or, worse, without a lot of health system experience) writing about obesity medicines, which means there will be a lot of long-but-low-context think pieces from generalist publications. Anyway, here is a link to a piece in Fortune.

• Look, not all of the obesity coverage is going to be bad. Case in point: Reuters does a good job of surveying Europe, explaining why the early returns on Novo Nordisk’s Wegovy are a little underwhelming.

• Senate Majority Leader Chuck Schumer sent a note around to his colleagues, now that the Senate is out of recess, highlight the work he’d like to get done this year. He name-checks insulin, but not PBMs. I have no idea if that reflects a policy choice, or if insulin is just a sexier topic.

Multi-Criteria Decision Analysis is one of those concepts that has always felt to me to be both an incredibly powerful way of defining value and an overwhelmingly complex way to get to that goal.

This explanatory video does a great job of explaining the basics, using an easy-to-grasp analogy. I saw this floating around on LinkedIn last week, but it’s not new … it’s a five-year-old effort from a firm called Health Outcomes Strategies.