Will the Price Disclosure for Vertex's Journavx Set a New Standard for Transparency?

Last month, Mel Whittington, who runs the Leerink Center for Pharmacoeconomics, had me on her podcast to discuss the intersection between communications and health economics. I had a blast, and the episode is now live. The page for the episode is here. 

So, tariffs. President Trump made good on a longstanding promise to slap broad tariffs on our largest trading partners, and Canada, Mexico,** and China will all feel the squeeze.*** 

The obvious overlap with this newsletter’s focus is the impact on drug prices. This is mostly a conversation about generic drug prices, where the cost of goods is a more important element, though if someone wants to raise an alarm about brand drugs, I’m here to hear it. 

The idea of slapping tariffs on generic drugs, or the active ingredients needed for those medicines, drew a swift rebuke from the Association for Accessible Medicines, which put the impact in plain terms: “Tariffs on products from Canada, Mexico, and China could increase already problematic drug shortages.” BIO is also on the record with a more equivocating take here. 

It’s worth keeping that in mind. This isn’t really about prices increasing for consumers. The drug supply chain doesn’t work quite like that. Generics are largely a commodity product where the end buyers -- the payers -- have an enormous amount of power to set prices. 

So it’s more likely that this will just pressure the margins of the manufacturers, and when those companies have to make tough decisions about how to invest tight resources, they’re probably going to walk away from certain products. And that’s going to create the conditions for shortages. 

The irony is that there are good reasons to want to onshore more generic-drug manufacturing. It would be good to have more control over quality, and simplifying the supply chain has benefits of its own. To repeat, the biggest issue with generic drugs is the shortage issue and — with the proper economics — domestic manufacturing would be a plus. 

Even though I’ve often been snarky about Civica Rx’s effort to manufacture generic insulin for California because the economics don’t work that well, it’s a great way to take supply worries off the table. 

The issue is that making it more expensive for generics companies is not the best (or safest!) way of accomplishing this task. The Senate Finance Committee released a white paper last year that had some good ideas, and -- obviously -- tariffs didn’t make the cut.**** 

So we have a generic-drug problem that tariffs are likely to make worse, rather than better. Buckle up. 

** Or maybe not Mexico. Things are moving quickly. 

*** Friend of the Curve and generic-drug impresario Mark Cuban has said on social that he thinks this is a negotiating ploy, and that there will be capitulation. I’m not in the prediction business, so take that for what it’s worth.

**** You know who else has good ideas about dealing with shortages? Canada.

I have two pieces of good news from the launch-pricing beat, which is where an increasing amount of my spare time is being devoted. Both concern the approval, last week, of Vertex’s Journavx, the first in a new class of non-opioid painkillers. 

The first piece of good news is that the list price is $15.50 per pill. That’s $31 a day or $434 for a two-week course of treatment, aligning with the drug’s acute-pain label. (Vertex also aspires to get the medicine approved for chronic use, which -- at this price -- would come to a tick over $11,000 a year, but that’s getting ahead of ourselves). 

$31 a day is the list price. The expectation is that this will be broadly covered by insurers who are eager to show that they’re in support of opioid alternatives, so patients won’t be paying 15 bucks a pill. That’s a win for patient access. 

And $31 per day is about half of what ICER was expecting.** The group had a $420-per-week price modeled in (that’s $60 a day), and ICER’s draft finding was that Journavx cost less and delivered more*** -- even at the higher price point -- than an opioid/acetaminophen combo. The cost savings were largely driven by the costs associated with the number of patients who end up with opioid use disorder. 

So another win. 

The second piece of good news is that Vertex came out and put the price in the press release. As my draft research has shown, companies Vertex’s size almost never disclose prices in such a proactive fashion.**** It’s a win for transparency and suggests a company that’s more than willing to have a conversation about price. 

That conversation appears to be happening. Price was widely mentioned in coverage, with STAT doing a good job of putting things in context (the bits highlighting the United perspective from Cantor Fitzgerald are worth reading). Also smart was the Boston Globe’s coverage. 

It’s hard to declare trends based on a single example, but pharma can be a copycat industry, so it will be interesting to see who else follows Vertex’s lead in the months to come. 

** Analyst expectations were a bit more all-over-the-map, with some predicting the price would be lower than where Vertex landed and others expecting a higher price. 

*** There is a broader conversation about exactly what Journavx delivers, efficacy-wise, but that’s beyond the scope here. 

**** Notable exceptions from 2024: Winrevair, Kisunla.

• If things go according to schedule, by this time tomorrow the Senate Finance Committee will have voted to advance -- or deep-six -- Robert Kennedy Jr.’s nomination to lead HHS. I don’t do politics, but the consensus is that Bill Cassidy is the guy to watch here. 

• Speaking of Kennedy, his written responses to questions from senators were released on Friday. He’s against using march-in rights to control drug prices but waffled on international reference pricing. I’m not sure any of his views on these topics matter in any real sense. If we learned one thing from the hearings last week, it’s that Kennedy doesn’t particularly care about the nuances of drug-price policy. 

• More good stuff from 3 Axis Advisors’ Antonio Ciaccio, who penned a report for the National Community Pharmacists Association that estimated that dispensing medicines with a “negotiated” price will mean a loss of about $43,000 a year for the average pharmacy. There’s a ton of uncertainty around the outcome, and that’s not taking into account the general uncertainty about how, logistically, this is all going to go down. 

• Bloomberg Law examined the fate of standalone Medicare Part D plans, which is looking pretty grim. This is the first of what I would imagine will be a wave of coverage on the topic. Bloomberg did a fairly good job, but I expect future versions to layer in the reality that Part D is probably in the crosshairs of Trump health policy allies, too. 

• The Sagebrush saga just getting even more complex, with Genentech suing HRSA on Friday in a suit that looks very similar to the one filed by Amgen/Lilly/UCB (the Genentech action even has the same lawyers). Lots of moving parts here, between the lawmaker vs HRSA efforts and the Sagebrush vs HRSA suit. Endpoints appears to be the only outlet covering this, which is too bad. It’s a great lens into the significant operational issues that plague 340B.

• Here’s an early candidate for headline of the year: “UnitedHealth CEO Andrew Witty Is Wrong. Just Plain Wrong.”

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].