Pushing Back on Some Price-Control Arguments as Fervor Over 'The List' Fades

Congrats to Nebraska for setting the world record for attendance at a women’s sporting event: we got 92,000+ into Memorial Stadium yesterday. This is a reminder that there’s a huge and untapped market around women’s sports.

Not my usual soapbox, but one that’s near and dear to my heart, regardless.

There’s really nothing new to say about the CMS list of “selected drugs” that will now face price controls. I stand by 23 of the 24 general thoughts I’ve shared over the past two days. (For those catching up, here are the first dozen things to enter my head about the list, and here are 12 more, after a day of consideration.)

We’re now at the point where the coverage is now either repetitive or looking at “what-if” scenarios that feel pretty removed from reality (not going to call anyone out or provide links).

The one worthwhile piece might be from Bob Herman at STAT, who examined the way that concerns about price controls and the impact of price controls on cost-plus billing are keeping hospitals from punching pharma when it’s down.

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There are also a couple of arguments circulating that are worth some pushback:

First, STAT’s indispensable Readout newsletter suggested that the “meh” market reaction “is arguably damaging to pharma’s case against the policy.” That’s an idea that undergirded yesterday’s WaPo coverage, too. And it’s really the wrong way to think about market reaction.

The impact of the IRA isn’t really going to be felt around the first 10 medicines. Yes, there will be disruptions, but these are largely meds at the end of the lifecycle, and the new prices don’t kick in until 2026, which is a lifetime away (2024 is going to be a very long year, folks).

But over time, this policy will have an impact, both on innovation and on pharma growth. It’s just that the market is really, really bad at “thinking” long-term. So this week’s market moves probably reflect the stock-strengthening effect of reducing uncertainty (even around bad things), rather than a conclusion that the IRA isn’t going to rock industry.

Second, I totally missed this Brookings study from last week that uses the lukewarm M&A market over the past year to conclude that “investment environment for drug development remains largely unchanged by the IRA’s drug price negotiation program and is currently not threatened by it.”

This strikes me as an unserious argument propping up a preconceived conclusion. The M&A environment in biopharma over the past year has a lot more to do with macro factors than it does with the IRA, and if you ask the money folks -- on both sides -- they’ll tell you that the IRA is absolutely impacting decision-making in ways that probably wouldn’t show up in the broad-bush Brookings data. God help small companies making small-molecule heart drugs.

There is going to be a healthy stream of obesity-med stories from now until forever. Some of them will be good and interesting and important. (Anything on Medicare coverage should be read closely, and I expect a deep dive at some point on how price controls for Ozempic -- which may be in the next round of CMS selected drugs -- will reshape the market.)

There will also be a lot of really speculative, off-the-news stories that will be generated because people just love to read about the topic. I suspect these stories will be heavy on anecdote and speculation rather than data, and won’t necessarily make anyone smarter.

What kind of articles are we talking about? I asked ChatGPT to give me a list of low-evidence trend stories that journalists may pursue, and here are some of the robot-generated highlights. How many of these will we see become real stories in the next six months?

• "A Slimmer Nation: Effective Weight-Loss Drugs Sweep the Nation, Redefining Health Standards." This story dives into how the increased use of weight-loss drugs is reshaping societal perceptions of beauty and health. Experts discuss the benefits and potential risks of this trend, while individuals share their personal journeys and struggles with body image.

• "Economic Impact of Weight Loss: Industries Adapt to the Surge in Demand for Smaller Sizes." This article examines how various industries, including fashion, fitness, and food, are adapting to the growing demand for smaller sizes due to the rise in weight-loss drug usage. Experts discuss how businesses are pivoting their strategies to cater to the changing consumer landscape.

• "The Mental Health Connection: Exploring the Psychological Impact of Rapid Weight Loss". This story delves into the emotional and psychological effects of rapid weight loss facilitated by these drugs. Experts discuss the potential for improved self-esteem but also highlight the importance of addressing underlying psychological issues.

• "Aging Gracefully: Exploring the Impact of Weight Loss Drugs on the Elderly Population". The story focuses on how weight-loss drugs are affecting older adults, considering potential benefits and risks unique to this demographic. Experts discuss the importance of tailoring approaches to account for age-related factors.

There is a certain irony in Axios highlighting employer concerns about low-value care at the same time that high-value medicines are being price-controlled. There remains a lot of waste in the system related to low-value care, and it’s hard to argue that drugs are a big part of that problem.

Anyway:

• I don’t know how good the data is, but speaking of (slightly) more legitimate weight-loss coverage, there were a few stories about an Airfinity analysis that showed that the cost of preventing a single cardiovascular outcome is $1+ million with Wegovy.

• Leqembi is off to a somewhat slow start (but probably not an unexpectedly slow start) as providers figure out how to set up processes for getting patients on the med and monitoring them once they start, the Boston Globe said.

• Here’s an Arnold-funded JAMA “Viewpoint” arguing that the First Amendment argument in the pharma lawsuits against the IRA would lead to sweeping and dangerous changes in how the First Amendment is used by companies.

• Members of Congress still really want to regulate pharma ads.

• Vox’s coverage of the IRA selected-drug list pulled in monthly list prices from drugs.com. On the one hand, those prices provide somewhat useful context that has been missing from most coverage. On the other hand, it’s somewhat misleading context, given that neither the patients nor the government are paying. Looking forward to seeing some journalism that tries to suss out what the net prices are for the top 10 meds.