ICER Weekly View 08-03-18

From the desk of Mitchell Stein


Good morning. On Twitter – what do you mean you’re not following me (@mhstein) on Twitter – there is a construct that goes something like “two things can be true at the same time” or “these two things are both true” or “it can be hard to focus, but two things can be true at once.” This week saw a focus on the drug rebate structure and PBMs, but as we will see, that does not mean that drug prices are no longer an issue. The idea is that they (rebates and prices) can both need reform; we’ll take a closer look in the Industry Trends section below. Here’s this week’s full line-up:

ICER in the news – Release of potential 2019 topics, topic announcement for treatments of spinal muscular atrophy, draft scoping document on cankinumamb, will ICER assessments be the US standard, industry swipe at budget impact, Regeneron sees issues larger than drug prices, and waste-free formularies

Inside the Beltway – Drug importation, prices in drug advertisements, surrogate endpoints, and Arizona responds to industry influence on Medicaid

Industry Trends – Drug cost system estimates, the relative importance of drug prices vs. PBM profits, NY Times on drug rebates, Pfizer CEO thinks rebates going away, drug company PR successes, report on PBM/Medicaid charges, CVS/Aetna merger objections, PBM old merger review, more reports, Humira patents, Brexit drug issues, and two peeks into the future

Now, on to the news.

ICER In The News

ICER has released its preliminary list of potential assessment topics for 2019. The list is drawn from ICER horizon scans of new and emerging therapies, conversations with stakeholders, and suggestions submitted from the public. ICER’s topic selection criteria – including the projected timing and likelihood of FDA approval, and whether a review of the evidence would suggest specific actions for payers, physicians, patients, and policymakers to improve clinical practice – are applied to produce this preliminary list of potential topics. Click on the title below for the full announcement including the list of topics.

Institute for Clinical and Economic Review Lists Potential Options for Assessments in 2019

ICER will develop a report assessing the comparative clinical effectiveness and value of AVXS-101 (Novartis) and nusinersen (Spinraza, Biogen) for treatment of spinal muscular atrophy. ICER’s report is set to be reviewed during a March 2019 meeting of the New England Comparative Effectiveness Public Advisory Council. The open input period is open until August 17th.

Institute for Clinical and Economic Review to Evaluate Comparative Clinical Effectiveness and Value of AVXS-101 and Nusinersen for Spinal Muscular Atrophy

ICER has posted a Draft Scoping Document outlining a planned review of the comparative clinical effectiveness and value of canakinumab (Novartis) for cardiovascular risk reduction in people with atherosclerosis. The scoping document will be open to public comment until August 22, 2018.

Institute for Clinical and Economic Review Posts Draft Scoping Document on Canakinumab for Atherosclerosis

The Pink Sheet (subscription required) reported on ICER-related comments submitted to HHS regarding the President’s drug pricing plan. The article begins: “The prescription drug cost-effectiveness analyses conducted by the independent Institute for Clinical and Economic Review could serve as the basis for value-based contracting in government-sponsored insurance, organizations representing payers and health care providers suggest in recent comments to HHS.”

The article continues discussing specific supporting comments from some, along with some critical comments submitted by a manufacturer-supported group. Additionally, the article references a recent PhRMA report critical of ICER’s budget impact model (for more on that report, see the next item).

ICER Value Assessments Could Provide US Standard, Payers, Providers Tell HHS

All set! This article has been sent to my@email.address. All fields are required. For multiple recipients, separate email addresses with a semicolon. Please Note: Only individuals with an active subscription will be able to access the full article. All other readers will be directed to the abstract and would need to subscribe.

Politico’s pharmacy newsletter (Prescription Pulse) also covered PhRMA’s latest swipe at ICER including this response from ICER’s David Whitrap: ““What the PhRMA-funded report highlights — i.e., that our budget impact threshold varies based on how many new drugs are approved each year — is exactly the same reason that policymakers find it useful,” he said.”

Lukewarm reception to FDA biosimilar plan

LUKEWARM RECEPTION TO FDA’S BIOSIMILAR PLAN – Reaction to the FDA’s recently released biosimilar plan is coming in – most of it tepid so far. FDA Commissioner Scott Gottlieb unveiled a wide-ranging, 11-point plan to promote biosimilars earlier this month. Yet approving biosimilars is half the battle in the U.S.

In a Forbes piece, Regeneron’s George D. Yancopoulos and Leonard S. Schleifer discuss what they see as a much bigger problem than current drug pricing – the need for greater investment in diseases such as Alzheimer’s. In discussing pricing, they refer to their work with ICER.

Regeneron CEO & CSO: The Real Healthcare Problem Is Bigger Than You Think

We have grown increasingly concerned about the current dialogue on the biopharma industry, which tends to focus on short-term issues such as drug pricing, at the complete exclusion of much bigger issues that threaten the long-term health of our nation and the very sustainability of our way of life.

Managed Care Magazine looks at the Pacific Business Group on Health’s work to create a waste-free formulary. Includes mention of how ICER’s work will be a factor in its creation.

The few. The effective. The cheapest. The waste-free formulary.

By some estimates, about 30% of all health care spending is wasteful. As the senior director of member value for the Pacific Business Group on Health, Lauren Vela knows this statistic well and is working to eliminate the waste built into formularies.

Careers at ICER

ICER is growing! Interested in joining the ICER team? Check out our open positions in research, health economics, program management, and more on ICER’s Careers Page

This week’s job spotlight:

VP Development

The VP of Development will assume leadership in designing, articulating, and implementing a comprehensive fundraising strategy for ICER. This strategy will include individual philanthropy, foundation and corporate giving, and board development.

Pharmaceutical News

Inside the Beltway/State Regulatory Developments

The President’s drug plan has many components to it – this week saw some movement on two of those pieces:

Kaiser reports on the very limited circumstance that might trigger drug importation. 

To Tame Prescription Prices, HHS Dips A Toe Into Drug Importation Stream

It came as something of a surprise when Health and Human Services Secretary Alex Azar announced that the administration was exploring the importation of prescription drugs to fight high domestic prices. Azar and Scott Gottlieb, commissioner of the Food and Drug Administration, who also endorsed the new proposal, had previously opposed the idea.

FiercePharma reports on movement of a bill to require prices in drug advertisements.

Sticker prices in drug ads just got closer with bipartisan backing in Senate

Think President Donald Trump’s proposal to slap price tags on drug advertising is all talk and no action? Think again. Over the past couple of weeks, the idea has gained steam-and bipartisan backing, including from Democrats often critical of the president. So much so, in fact, that a bill containing the provision could see a Senate vote this week.

Gottlieb outlines surrogate endpoints as a means to speed drug development (and as outlined in the Cures Act). However, these actions are not universally popular. As Larry Huston points out in a tweet, the goal is to reduce the use of RCTs, what some still consider the gold standard.

FDA outlines a laundry list of surrogate endpoints with an eye to expanding the roster for drug developers

The FDA on Wednesday published a list of surrogate endpoints to help inform drug developer discussions with relevant Center for Biologics Evaluation and Research (CBER) or Center for Drug Evaluation and Research (CDER) review divisions.

Arizona moves quickly after a report on drug industry influence on Medicaid decision process.

Arizona Governor Takes Steps To Blunt Industry Influence On Medicaid

In response to a joint investigation by the Center for Public Integrity and NPR into the influence of the drug industry on Medicaid, Arizona Gov. Doug Ducey made changes to the state’s Medicaid program Friday, including adding new transparency rules and kicking a doctor off a state committee.

Industry Trends

Health Affairs published prescription drug spending estimates from Nancy L. Yu, Preston Atteberry, and Peter B. Bach. They show gross revenue from all parts of the supply chain. The estimates help put in perspective the relative size of manufacturer ($323 billion)  vs. PBM ($23 billion) revenue and as mentioned above, the need to keep two things in our minds at the same time – rebates needing reform does not negate manufacturers’ pricing needing reform as well. 

Spending On Prescription Drugs In The US: Where Does All The Money Go?

The US pharmaceutical industry is characterized by a complex and often opaque system of distribution and reimbursement, in which the business models of multiple intermediaries rely on revenue from fees, price mark-ups, and after-the-fact rebates.

Regarding the relative importance of focusing on rebates vs. focusing on manufacturer’s prices, David Crow, writing in the Financial Times (subscription required), notes that “even if the profits of the top two PBMs were to go to zero and instead spent on drugs, it would not even foot the bill for Humira” (quote from his tweet). 

Trump is losing the war on drug prices

Why do I feel the need to remind you that two things can be true at once? Sometimes if you just look at the headlines, you might not think that was the case. This week we saw lots of talk about rebates, PBMs, and their pending mergers. 

The NY Times seems to have just discovered drug rebates, or at least this headline writer did, calling them the “new villain.” Criticism of the headline aside, the piece takes a thorough look at how rebates work and what their impact is, and what the chances are of them going away.

Meet the Rebate, the New Villain of High Drug Prices

A growing chorus, including the Trump administration, is calling for a rethinking of after-the-fact drug discounts that some say contribute to rising prices. An increasingly popular culprit in the debate over high drug prices is the pharmaceutical rebate, the after-the-fact discounts that form the heart of the nation’s arcane – many would say broken – market for prescription drugs.

The CEO of Pfizer seems to think drug rebates will be eliminated (he doesn’t sound too upset).

Pfizer CEO: Drug Rebates Will be Eliminated

Posted 31 July 2018 | By Zachary Brennan Pfizer CEO Ian Read told investors in Tuesday’s earnings call that President Donald Trump will eliminate drug rebates, which if true, would be a blow to pharmacy benefit managers like Express Scripts or CVS.

Politico reports this morning that drug manufacturers no longer seem overly concerned by the Administration’s actions, framing their moves in such a way to divert attention from them. They can’t help but be pleased with the attention being focused on PBMs (discussed above). 

How drug companies are beating Trump at his own game

A July tweet from President Donald Trump sent panic through the C-suites of some of the world’s biggest drug companies, prompting Pfizer and nine other companies to roll back or freeze prices. But there’s less to those announcements than meets the eye.

Axios reports new data from 46brooklyn Research showing problems in what Medicaid programs are being charged for certain drugs by PBMs.

The data showing drug pricing games

The details: 46brooklyn’s visualizations use and merge several sources of federal data. The resulting maps and graphics detail what PBMs charge state Medicaid programs for certain drugs and what those drugs cost pharmacies. The spread between those figures essentially is the profit that PBMs and other middlemen collect.

The CVS Health/Aetna merger was back in the news this week with Carl Icahn (Axios)  and the California Insurance Commissioner (Forbes) coming out with objections to the deal.

Carl Icahn wants to block Cigna-Express Scripts merger

The deal already had analysts scratching their heads.

California Insurance Commissioner Asks DOJ To Block CVS-Aetna Merger

The top insurance official in California urged the U.S. Justice Department to block the merger of CVS Health and Aetna, saying it would “have significant anti-competitive impacts on American consumers and health care and health insurance markets.”

Speaking of PBM mergers, Bloomberg reports on a requested review of previous PBM mergers (gated after a quota of free articles).

Mergers That Built Drug Middlemen Need Review, GOP Lawmakers Say

Overall it was a big week for new reports. Zachary Brennan of RAPS discusses three of them, the Health Affairs one referenced above as well as two others: One from Senator McCaskill on potential savings from Medicare negotiations and one from I-MAK on the use of patents to prevent competition.

Patents and Negotiations: Three New Reports Dig in on Drug Prices

Drug prices. Rebates. Middlemen. Gouging. Buzzwords are flying and not only in the pharmacy, but on Capitol Hill, in C-suite executives’ offices and at the White House. However, the story is more complicated than just: Drug prices are too high and need to be lower.

And speaking of preventing competition, RAPS asks if the length of time Humira will keep exclusivity is gaming the system.

‘Gaming the System’: How Many Years Without Competition is Too Many?

Posted 27 July 2018 | By Zachary Brennan AbbVie CEO Richard Gonzalez drew a line in the sand early Friday by declaring that none of the deals to keep US competition for its mega-blockbuster Humira (adalimumab) off the market until 2023 is “gaming the system.” But how does one define “gaming” the system?

While I mostly focus on US developments, sometimes international events break-in (or Brexit-in in this case).  This Reuters article looks at two issues: The first is the loss of staff the EMA is facing as 30% of current employees say they will not make the move from London to Amsterdam. The second is the precautionary stockpiling of drugs in Britain by most major manufacturers to avoid supply disruptions if the transition does not go smoothly.

More drugmakers build Brexit stockpiles as EU agency faces exodus

PARIS/ZURICH/LONDON (Reuters) – Sanofi () and Novartis () said on Wednesday they planned to increase stockpiles of medicines in Britain in preparation for potential disruption if the UK crashes out of the European Union without a deal.

We’ll end this week with two peeks into the future of pharmacology. The first article from Nature looks at constrained peptides and the second from Chemical and Engineering News looks at exosomes.

Constrained peptides’ time to shine?


Meet the exosome, the rising star in drug delivery

Millions of tiny bubbles, released from cells and packaged with molecular mail, are racing through your bloodstream right now. And until recently, only a handful of researchers gave them any thought. Stephen J. Gould is one of those scientists. For more than a decade, Gould has devoted significant time and resources to understanding the curious cellular couriers. 
@mhstein  |

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