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Drug industry 1, Trump administration 0
It’s official: The Trump administration does not have the authority to force drug makers to disclose their sticker prices in TV ads, at least according to a ruling released late Monday from D.C. District Court Judge Amit Mehta, who blocked the proposal just hours before it was set to go into effect today. For more on that ruling, check out my story here.
I’ll be watching to see how the administration pivots from this painful defeat. It’s been more than a year since the Trump administration first released its largely aspirational “drug pricing blueprint” in May 2018, and before Monday, this was the only real accomplishment Trump could point to. Now that point has been taken off the scoreboard and handed to the drug industry.
You can also bet that’s bad news for Team Trump 2020 — especially since every Democratic presidential candidate is clamoring to talk about Trump’s lack of progress bringing down drug prices.
Interestingly enough, Congress probably could fix Trump’s woes. A law that explicitly grants HHS the authority to require these disclosures would give the administration much stronger legal footing. Senate Finance Chairman Chuck Grassley (R-Iowa), who is already working on a package of drug pricing proposals, already has a bill that would do just that. (Though we don’t have word yet on whether that bill is in the package, which is being carefully guarded by committee staff.)
Adding to the drama this week: HHS Secretary Alex Azar and Domestic Policy Council Director Joe Grogan will meet with members of the Senate Finance Committee today on Capitol Hill, STAT learned from two industry sources and a congressional aide. It’s probably a good bet this ruling will come up.
More broadly, it’s notable that the two most prominent advisors on drug pricing policy — long reported to be at odds on the administration’s approach — are showing a united front just as the committee leaders are expected to roll out a bipartisan compromise bill on the issue.
Trump said what now?
If President Trump’s recent promise to pen an executive order creating a “favored nations law” for drug prices made your head spin, you’re not alone. I spent Monday chatting with some of the nation’s top drug pricing experts about the alleged proposal, and two things became immediately clear to me: 1. Trump’s remarks caught everyone by surprise and 2. No one knows for sure what the commander in chief meant.
Nonetheless, I’ve done my best to piece together what such a policy could mean — assuming Trump didn’t whiff on the details, that is. Here’s what I learned:
1. The idea really hasn’t been tried before on a national scale. No expert I chatted with could point to another country that uses a “favored nations” clause to mandate they get the best prices on prescription drugs. The closest international corollary experts could point to was so-called international reference pricing, which bases what one country pays for drugs on the average of what other countries pay. But that’s not a perfect comparison and is actually much closer to Trump’s proposal to create an international pricing index for Medicare.
2. Those looking for clues as to how such a system might work may be better suited looking at the Medicaid program rather than looking abroad. Multiple experts pointed to Medicaid’s requirement that the program get the “best price” for drugs as analogous to how a “favored nations” clause might work in Medicare.
3. There’s a disagreement among policy experts as to how penning a “most favored nation” clause would impact America’s already complex drug pricing system. Some, like Johns Hopkins’ Gerard Anderson, told me such an idea would “blow up everything that is in drug pricing today,” while others, like West Health’s Sean Dickson, laid out a system where by the Medicare system could remain largely unchanged.
4. The implementation hurdles are almost unfathomably complex. Experts raised a plethora of questions as to how such an EO would work in practice. Everything from how, logistically, the U.S. would determine what country is getting the best price at any given time, to whether the government has the ability to make such a sweeping change via executive order.
If you want to go deeper on what Trump’s promise could mean for drug pricing, check out my story here.
Drug pricing advocates put NIH in the hot seat
The drug industry foe Patients For Affordable Drugs has a new report out this morning arguing that taxpayers have contributed at least $300 million toward the development of a gene therapy to cure sickle cell disease — and the group says that’s reason enough for the NIH to demand the treatment be reasonably priced.
“Given the $1 to $2 million price range of recent gene therapies, we are concerned that a sickle cell cure will be brought to market at a price that is unaffordable for patients and for the taxpayers who supported its development,” the group writes. “The NIH should use all levers in its power to ensure the final price accounts for public investment.”
The group has a number of suggestions to NIH on how to establish pricing guardrails, including requiring that the drug maker price the drug at no more than the average of comparable OECD nations.
This isn’t the first time drug pricing advocates have railed against NIH licensing out government-developed drugs without restricting what drug makers can charge, but those complaints so far have fallen on deaf ears.
An NIH spokesperson declined to comment on P4AD’s pricing concerns and emphasized that NIH does not have a role in setting prices. The spokesperson also disputed P4AD’s argument that $300 million went to the development of this one particular therapy, because the NIH studies were foundational research studies. “You can’t take foundational studies and apply them to one product,” the spokesperson said.
Ever watch a nine-year-old testify before Congress?
If you want some serious cuteness — and a dose of serious policy, too — may I suggest you tune into Wednesday’s Senate Aging Committee hearing on the Special Diabetes Program? Nine-year-old Ruby Anderson and 16-year-old Adriana Richard will testify on the importance of reauthorizing the program, which provides $150 million annually for NIH research searching for a cure to Type 1 diabetes. They’re coming to Washington as part of a fly-in from the juvenile research advocacy group JDRF, which will bring more than 160 children to Washington to urge reauthorization of the program before it expires at the end of September.
If you’re thinking: ‘Reauthorizing this should be a no-brainer, right?’ then perhaps you’ve forgotten that we’re talking here about the U.S. Congress. In fact, the last time the program was up for reauthorization — back in 2017 — funding lapsed for more than four months. Now, advocates are pushing for longer-term funding of the program. And it’s increasingly looking likely they’ll succeed.
The health care package cleared out of the Senate HELP Committee late last month included a four-year reauthorization of the program. On the House side, Rep. Diana DeGette (D-Colo.) has introduced legislation that would also fund the program until 2024. That bill would simultaneously increase annual funding for the program from $150 million to $200 million.
The truth about price drops for pricey hepatitis C drugs
The price of hepatitis C treatments dropped by roughly 60% last year, and if you follow the drug pricing debate closely, you’ve likely heard the argument that those rapid price drops are proof that things aren’t quite as out-of-whack in the U.S. drug pricing system as they may seem. But there’s a fascinating new paper in JAMA that, quite frankly, solidifies just how bonkers things are.
The new paper from West Health’s Sean Dickson and Pew’s Ian Reynolds finds that the three drug companies that make these hepatitis C drugs actually put more money in their pockets by lowering their sticker prices for these drugs. Yes, that’s right: Lower prices = more money.
While the dynamics at play — which include the wonky interplay between 340B hospitals and PBM rebates — are likely unique to the hepatitis C market, it’s recommended reading nonetheless. Check it out here.