Well, readers, it is - - amazingly - - the last month of 2018. It’s been a year jam-packed with medical breakthroughs, political changes, and a heavy dose of controversy at every step.
And while D.C. may be thinking ahead to a new Congress and new reforms, there’s still plenty of news (and holiday cheer) left in 2018. This week saw a flurry of pricing activity, regulatory action, and famous genetically-edited babies.
So, as the year winds down and calorie counts tick up, join us in a look back at last week in healthcare and what you need to know…
►WILL VALUE-BASED CONTRACTS SOON SAIL INTO SAFE HARBOR?
The Trump administration announced it would consider modifying the Anti-Kickback Statute to facilitate more coordinated, value-based care, and exempt healthcare providers and drug-makers from being seen as defrauding the government.
The news comes as biopharmas and private insurers are increasingly entering into value-based agreements (VBAs – also known as outcomes-based agreements) to provide greater cost certainties for innovative, often pricier medicines.
Under the current law, the Anti-Kickback Statute prevents Medicare and Medicaid plans -- and the patients enrolled in them -- from participating in such agreements. Similarly, government-insured patients can’t receive copay support that drug-makers frequently offer to commercially-insured patients. This is because as the statute stands today, VBAs and copay support runs afoul of the statute since they constitute financial incentives that, at least in theory, induce government-insured patients to purchase and use a particular medication. Critics blasted this as “a get out of jail free card” for the industry, but most public comments largely embrace reform and reflect the need for regulatory clarity on the legality of VBAs for Medicare and Medicaid plans.
With more gene therapies and CAR-Ts headed toward the marketplace, flexibility around Anti-Kickback regulations will be needed. Government payers face increasing budgetary strain, so value-based agreements can help ensure they pay for medicines that work.
But don’t get too excited yet. Despite the openness from HHS, another side of the Administration, the Department of Justice, has been increasing enforcement on pharmaceuticals under the anti-kickback statute – leaving a very murky environment for pharma compliance officers and legal teams to navigate.
►WHAT THE CRISPR BABY MEANS TO FUTURE GENE THERAPIES
Okay, we know, we know, you’ve already heard a lot about the Chinese CRISPR imbroglio! Chinese scientist He Jiankui edited the DNA of twin fetuses to make the babies resistant to HIV, but seemingly carried out these efforts without the usual approval, reportedly unclear consent by the parents, and “jumping the proverbial shark” of the standard medical journal review process. The result: a rapid firestorm of alarm among the field, the press and bioethicists. Usually tempered scientific organizations and universities said they were “deeply shocked” and the Chinese government said the experiment was “crazy.”
►OUR TAKEGene editing in utero is one of the most complex, ethically controversial issues in medicine. While this is an instance of one scientist “going rogue,” it has implications for other gene therapy developers. Gene therapies indubitably carry tremendous potential to advance human health, but they raise the question, “When is the right time to administer such interventions?”
Proprietary research shows most parents don’t want to conduct gene editing therapies on infants and toddlers until they are clearly symptomatic – even if genetic testing confirms the diagnosis. We believe companies developing transformative medicines will need to hire and elevate bioethicists to levels as prominent as the C-Suite.
►NEW CANCER BREAKTHROUGH, NEW SET OF QUESTIONS
For the first time, the FDA has approved a medicine, Vitrakvi, from Bayer and Loxo, indicated to treat a specific genetic mutation of cancer, rather than the site of the tumor. Of course, a new type of approval sets up a new set of business and payer challenges. For example, patients with the applicable tumor type must be identified through a gene sequencing of the tumor, which isn’t standard practice yet. And the rarity of the tumor type has helped drive a list price that some insurers may challenge. The annual list price of Vitrakvi comes in it at $393,000 a year for adults and $132,000 for the liquid form used in pediatric cases.
►OUR TAKEInsurer reactions to Vitrakvi’s list price were generally positive in the press, in part because the population taking the therapy is small – and the medical breakthrough is unquestionable. In our view, Bayer was effective explaining the rationale behind its pricing, articulating that the lower pediatric price is due to a child’s smaller surface area. Only time will tell, whether payers will pay for costly oncologic therapies and the expensive genetic tests required for their diagnosis. Transformative oncologic developers need to start communicating the value and need of diagnostics + therapies long before development to build support at the time of launch and beyond.
Until next week, this has been The Week That Was.
Who Are We, Anyway?
Syneos Health Communications' Reputation & Risk Management Practice is a team of healthcare communications consultants, policy-shapers and crisis response specialists. Drawing on our professional experiences from Congress, CMS, HHS, hospitals, health technology and biopharmaceuticals—we provide unique solutions to the evolving communications challenges in today’s healthcare industry. We support trade associations, biopharmaceutical and consumer goods companies’ in evidence-based approaches to successfully navigate the most sensitive of situations facing their industries. In our spare time, we drink too much coffee, geek out on healthcare news, and obsess over Sunday morning political TV.