ICER Weekly View 06-29-18

From the desk of Mitchell Stein


Good morning.

An editorial note. I won’t be publishing next week due to the July 4 holiday. Weekly View will return on Friday, July 13.

Thank you Amazon – like many, I was a bit distracted this week by the flurry of news. However, Amazon pulled my wonkish soul out of the doldrums by purchasing PillPack – their long-awaited entry into prescription drugs has begun, prompting much speculation about what it means as well as a stock sell-off of the major pharmacy stocks (of course it doesn’t make the other news go away, but distractions can be therapeutic). We’ll have full coverage below. Also this week we’ll look at:

ICER in the news – ICER forms an advisory group on price increases, NY State pushes back on Orkambi price, and more coverage of ICER’s Luxturna work

Inside the Beltway – Three CMS announcements, FDA to release surrogate endpoints, and still waiting on those price cuts

Industry Trends – Amazon buys PillPack, ProPublica looks at the FDA’s relationship to industry, Kaiser tracking poll, Abbvie/Calico (Google) monster deal, a history of pharma, new flu drug, looking at drug coverage, Brainstorm changes plans, and the wonder of science (high-resolution snapshot of a virus)

Now, on to the news.

ICER In The News

ICER announced the formation of an advisory group to guide the development of a report on US drug price increases that are unsupported by clinical evidence. ICER plans to issue its initial annual report on unsupported price increases during the first quarter of 2019.

“The federal government has expressed concern about drug price increases, and several states have already passed laws that will generate lists of drugs with substantial price increases so that policymakers and the public can seek greater transparency,” said Steven D. Pearson, MD, MSc, President of ICER. “What isn’t available to federal or state policymakers, to patients, or to other stakeholders is an explicit and independent approach to determining whether price increases are supported by new clinical evidence or other factors. That’s the goal for this new initiative.

The release was covered in The PharmaLetter and FiercePharma.

Institute for Clinical and Economic Review to Evaluate Whether Price Increases on Prescription Drugs Are Unsupported by New Clinical Evidence


The NY Times looks at NY State’s attempt to push back on the price of Orkambi. The State’s efforts are based on work done by ICER:

“Our system is set up not to distinguish very well between those drugs that are fairly priced and those that are not,” he said. Dr. Pearson’s institute concluded that Vertex’s cystic-fibrosis drugs should be discounted by as much as 77 percent. “That gives the incentive to the company to overreach, and that’s part of why our system is so out of whack,” he said.

A Drug Costs $272,000 a Year. Not So Fast, Says New York State.

New York’s Medicaid program says Orkambi, a new drug to treat cystic fibrosis, is not worth the price. The case is being closely watched around the country. A wave of breakthrough drugs is transforming the medical world, offering hope for people with deadly diseases despite their dizzying price tags.

Biospace reports on gene therapy, including discussion of ICER’s work on Luxturna.

The Real Test For Gene Therapy Is Yet To Come | BioSpace

It feels like we’re standing on the edge of a precipice. Despite the ho-hum recent performance of biotech stocks, amazing things are about to happen. And one of the most amazing of all is gene therapy.

Pharmaceutical News

Inside the Beltway/State Regulatory Developments

CMS made several drug-related announcements this week. As reported by HealthcareDive below, they are rejecting a Massachusetts waiver request that would have enabled the state to implement a drug formulary in its Medicaid program. Additionally, they granted Oklahoma’s waiver request so that the state could implement value-based agreements with manufacturers and announced that Medicaid programs would have to pay for drugs approved through the FDA’s accelerated approval pathway.

CMS clears Medicaid value-based drug state plan, denies closed formulary

CMS said Wednesday that it will not approve a request by Massachusetts to use a closed formulary to exclude certain Medicaid-covered drugs. The agency said that while it appreciates the state’s effort to lower drug costs, technical changes need to be made for the proposal to be allowed.

Despite continued questions from some, the FDA moves forward with the use of surrogate endpoints.

FDA to Release List of Surrogate Endpoints in Oncology

Posted 25 June 2018 | By Zachary Brennan Scott Gottlieb, FDA Commissioner, said Monday at the National Press Club in Washington, DC that his agency will release a list of surrogate endpoints used in cancer drug development soon. His speech touched on four topics – including modernizing the trial process and enabling payers to leverage more open access to real world data.

Still, no sign of the price cuts as the Washington Post looks at what might be down the road.

In May, Trump predicted the pharmaceutical industry would cut prices in two weeks. It hasn’t happened yet.

President Trump said at the end of May that drug companies were about to make “voluntary, massive drops in prices” in two weeks. Two weeks later, Health and Human Services Secretary Alex Azar backed down from that timeline, testifying to Congress that drug companies “want to execute substantial material reductions in their drug prices” but were facing hurdles.

Industry Trends

Well, it finally happened. Amazon made its move into the pharmacy business with the purchase of PillPack, a small online pharmacy licensed to do business in all 50 states (although not presently shipping to Hawaii). The NY Times article below has the few details that are available. We know the rumored $1 billion purchase price buys Amazon the licenses as well as infrastructure designed to make it easier for patients with multiple medications to be adherent (you can learn more about PillPack in this Forbes article from 2015).

Despite (or because of) what we don’t know, the reaction from Wall Street was swift with many pharmacy stocks taking a beating. CVS closed (on Thursday) down 6.1%, Rite-Aid down 11.9%, Walgreens down 9.9%, McKesson down 6.1% and Express Scripts down 1.4% (you can see their current stock prices on this MarketWatch page). However, Walgreens CEO said he wasn’t worried and announced a stock buyback during a previously scheduled earnings call. 

Where this goes is the subject of much speculation. It seems clear Amazon could be a significant mail-order player if that’s all they wanted – but we’re guessing they want more. Amazon has been working on same day Prime delivery in some cities, will it expand that to drugs? Will Whole Foods locations come into play, but then would they just be another supermarket with a drug store? Will the ABC company, after naming Atul Gawande their CEO last week, be involved? So many questions, so few answers. The one thing I can say with certainty is that we’ll all be watching.

Amazon Buying Online Pharmacy PillPack

Amazon announced Thursday that it would acquire PillPack, an online pharmacy service that delivers medications by the dose to customers’ homes. Terms of the deal were not announced. The move is the latest sign of Amazon’s increasing interest in the pharmacy market, a field that has been roiled by consolidations as drugstore chains have purchased prescription benefit managers.

In case you haven’t seen it yet, ProPublica’s startling (yet not surprising) look at the ramifications of faster approvals that have resulted from a relationship between the FDA and industry best summed up by this quote: “That relationship has tilted the agency away from a public health perspective to an industry-friendly perspective.”

FDA Repays Industry by Rushing Risky Drugs to Market – ProPublica

Nuplazid, a drug for hallucinations and delusions associated with Parkinson’s disease, failed two clinical trials. In a third trial, under a revised standard for measuring its effect, it showed minimal benefit. Overall, more patients died or had serious side effects on Nuplazid than after receiving no treatment.

Kaiser’s monthly tracking poll is out, and as always, there is something of note for us to discuss. This month they ask about pharmaceutical advertising and the President’s plan to require prices. Here is what they found:

“A majority of the public – including eight in ten Democrats – support President Trump’s plan to require drug manufacturers to publish list prices for their prescription drugs in television advertisements. While most have seen or heard advertisements for prescription drugs, about one in seven say they have talked to their doctor as a result of seeing an advertisement for a prescription drug. Yet, among the fourteen percent of the public who have talked to their doctor about a drug they saw advertised – more than half (55 percent, 11 percent of adults) say they were prescribed the drug they asked about and half (48 percent, 10 percent of adults) discussed the price of the drug with their doctor.”

Kaiser Health Tracking Poll – June 2018: Campaigns, Pre-Existing Conditions, and Prescription Drug Ads

Health care continues to be one of the top issues that voters want to hear candidates talk about during their 2018 congressional campaigns. One-fourth of voters say health care is the “most important issue” for 2018 candidates to discuss during their campaigns, which is similar to the share who say the same about the economy and jobs (23 percent).

I don’t have the space to include every deal in this newsletter – but this Endpoints report on AbbVie and Calico stands out. With billions of dollars (between the original and new deal) being spent, we still have no real idea what they are doing…

A monster discovery deal between AbbVie and Google’s Calico gets a new lease on the lab, with $1B more to back aging research

Nearly 4 years after AbbVie and Google’s fledgling Calico stepped up to the altar of drug science and committed themselves to a $1.5 billion partnership on developing a pipeline of anti-aging drugs, they’ve decided to renew their vows. And this time they’re backing it up with a joint $1 billion

The New Republic takes a historical look at how the current pharmaceutical system developed and what it sees as the needed reforms to lower prices.

How Big Pharma Was Captured by the One Percent

Toward the end of the 1960s, new mechanisms hatched out of the National Institutes of Health would transform the industry and drastically expand the opportunities for private profit at the expense of the public interest, ushering in a post-Biddle age of virtually unrestricted industry access to taxpayer-funded science.

There is a good chance that by the end of the year there will be another potential treatment for flu. However, despite the tone of STAT’s article, don’t get too excited. Yes, the drug uses a new mechanism of action and only requires one pill, but its impact is to reduce symptoms by a day – helpful, but not change the world helpful.

Flu drug, taken in single dose, could upend treatment if approved in U.S.

ext winter, there may be a new drug for people who contract influenza – one that appears to be able to shut down infection quickly and, unlike anything else on the market, can be taken as a single dose.

I was saddened last week to learn that Health News Review will be ceasing operations at the end of 2018. Until then they continue to provide a valuable service, as exemplified by this post that looks at how a recent NY Times article did not tell the full story. With a similar goal, Dr. Prasad continues to put the spotlight on hype, as reviewed in this NPR profile of him and his work.

News outlets focus on one dramatic outcome. But did researchers omit data from hundreds in clinical trial?

Last week we reported on ‘One cancer patient’s dramatic response to immunotherapy…’ and highlighted what we thought was a lack of healthy skepticism in the extensive (and mostly fawning) news coverage. Most importantly we wanted to show that by highlighting the dramatic response of a single patient – without cautioning readers that just one dramatic …

Last week we looked at Brainstorm’s plans to profit off of right-to-try access. Turns out, it’s not going to happen.

Brainstorm backs off a controversial plan to sell its experimental ALS med, but this issue is far from over

Brainstorm Cell Therapeutics $BCLI won’t be angling to make any profits off the new ‘Right to Try’ bill after all.

Sometimes, science is amazing as the NY Times reviews a high-resolution picture of the Zika virus.

High-Resolution Snapshot of Zika Virus Reveals Clues to Fighting It

The microscopic distinctions may explain why dengue sometimes develops into a hemorrhagic fever, while Zika manifests as birth defects, for example, said Michael G. Rossmann, a microbiologist at Purdue University and one of the study’s authors. “At a lower resolution, many of these viruses just look like matching spherical balls,” said Madhumati Sevvana, the study’s lead author. 
@mhstein  |

Sign-up to have the Weekly View delivered to your inbox every Friday morning.