Spent last week watching Shaun White win his third gold medal? Finding yourself enthralled by every Curling match on TV? Seriously, we just don’t get that one… Regardless, if you missed last week’s breaking healthcare news, we’ve got you covered.
Oh, and there was a slalom of proposed changes to drug pricing policy. And the FDA is looking to create regulatory flexibility for high-priority neurological therapies that look more like the Super-G than cross-country.
So if you’re obsessed with the medal count, but want to catch up on other news, read on for The Week That Was...
►PRICING UNDER PRESSURE FROM POTUS, PAYERS & PBMS
Just when things were looking calmer for life sciences companies, think again. Last week, the White House introduced changes to how our nation pays for drugs. Introduced as part of the President’s fiscal year 2019 budget proposal, the changes are not the tectonic policy shifts that the industry had feared from the President’s campaign trail rhetoric. For example, absent from the proposal are importation and direct negotiation of drug prices by Medicare. But to be sure, any change to the systems that the government uses to buy medicines is important, given the scale of Medicare and Medicaid. And the news comes amid an Express Scripts trend report that found commercial health insurance plans spent a 1.5% increase on drugs in 2017, which is a record low. This indicates pricing pressures are coming from all sides.
POTUS’s proposed changes include having pharmaceutical companies help pay down the costs of seniors in the so-called Medicare “doughnut hole,” to help address their high out-of-pocket costs. The Administration would move some medicines currently covered under Medicare Part B to Part D - where pharmacy benefit managers would negotiate price. The Administration will enable up to five states to experiment with Medicaid coverage and finance reforms, including direct price negotiations with drug makers. Finally, the plan seeks to change eligibility rules for hospitals in the 340B program, which pays for treatment for low-income and at-risk populations. Under the 340B program, drug makers are required to provide drugs at significantly reduced prices, often pinching their margins.
Given the populist support for reducing drug prices, one would think that the proposals would be well received. But not everyone is cheering. Several members of Congress and Patients for Affordable Drugs pushed back that the most politically-ballyhooed changes, were absent.
We don’t mean to start your week on a gloomy note, but things are not looking so good for a number of life-science companies. Between the Administration’s proposal to rein in doughnut hole costs and Express Script’s predictions that drug spending will grow 1 to 3% over the next three years, pharma cos will be facing intensified pricing pressure on many fronts. And ironically, as certain chronic disease categories (such as diabetes, high cholesterol, pain and inflammation), face significant pricing pressures, developers will be incentivized to innovate in categories where there is greater pricing license.
As drug pricing remains a populist priority, it will be incumbent on medicines makers to communicate the value and rationale behind the price of their medicines and address the concerns of stakeholders ranging from patients to policymakers.
►FDA CREATES BROADER, ALTERNATIVE PATHS FOR ALZHEIMER'S TREATMENTS
Last week, the FDA unveiled new draft guidelines aimed at helping drug makers demonstrate the efficacy of experimental Alzheimer’s treatments, including in patients who have yet to display symptoms. The guidelines would enable developers to potentially receive accelerated review and approval, based upon a change in biomarkers and novel endpoints, as evidence of efficacy in early-stage research. This is an update from the FDA’s prior standard of evidence that required an investigatory drug to show it improved cognition and alleviated disease symptoms. The new policy comes amidst a flurry of high-profile trial failures in Alzheimer’s.
The change in FDA policy is part of a multi-year trend away from a one-size-fits-all approach to drug approvals and regulatory review. It is also likely a response to withering criticism from some patient groups about the slow, rigid approval process for new treatments with a high unmet need. While the changes will be welcomed by manufacturers, the first therapies to hit the market will face their own challenges with skeptical payers and prescribers. The onus will be on these medicine makers to proactively communicate about the ways in which these new pathways actually reveal a drug’s clinical value.
Until next week, that’s all folks.
- the Reputation & Risk Management Practice @ Syneos Health Communications