Jill Wechsler

As policymakers continue to scrutinize and criticize high drug prices, manufacturers are eager to shift some of the blame to pharmacy benefit managers (PBMs), hitting them for demanding high rebates and discounts that boost consumer costs. PBMs, in turn, insist that their efforts save money for health plans and patients by keeping outlays for medicines under control.

Now Congress is stepping in with a range of legislative proposals to further manage PBMs and the pharma market. Pharmaceutical companies, meanwhile, aim to sideline measures that would ratchet down certain drug prices, limit patents, and revise tax policy. In what has been a busy week on Capitol Hill, the legislators also discussed bills to advance generic drug competition, to revise corporate tax policy, and to lower prices on diabetes therapies for all patients.

Vermont independent Bernie Sanders led the charge at a hearing before the Senate Health, Labor, Education, and Pensions (HELP) committee Wednesday on the high cost of insulin.

Both Democrats and Republicans appeared receptive to price-lowering promises from leading diabetes drugmakers Eli Lilly, Sanofi, and Novo Nordisk, and ready to criticize executives from leading PBMs—CVS, Express Scripts, and Optum Rx—for huge profits and limited transparency. A telling issue was unfavorable PBM coverage of new biosimilars and charges that the middlemen serve their insurance corporate interests—and not patients. An ongoing complaint of too-low reimbursement from community pharmacists fueled Republican support for curbing PBM operations that appear to shift business to their own mail-order pharmacy operations and away from local retailers.

As a result, the HELP committee approved an extensive PBM reform bill along with three other measures involving FDA and drug policies. Two support generic drug development by curbing citizen petitions to FDA designed to delay competition (S. 1067) and by limiting “parking” strategies that similarly thwart competitive generic drug marketing (S. 1114). The RARE Act (S. 1214) addresses abuses of the seven-year exclusivity period for orphan drugs. And the hefty Pharmacy Benefit Manager Reform Act (S. 1339) swipes at multiple PBM practices, including “spread pricing” and the failure to pass rebates and fees to plans and patients.

These proposals follow similar House and Senate Committee efforts to curb PBM practices. The Senate Finance Committee held a hearing on PBM practices in March and issued a framework for legislation to curb abuses that limit access to affordable drugs.

 Similarly, the House Energy and Commerce Health Subcommittee has heard testimony on dozens of legislative proposals to “increase transparency and competition in healthcare,” including measures requiring PBMs to disclose more detailed information on drug costs, coverage, and rebates.

As the legislators have advanced reforms related to PBMs and other drug pricing issues, manufacturers, insurers, and PBMs have escalated their attacks on each other. The Pharmaceutical Research and Manufacturers of America (PhRMA) recently launched a wave of anti-PBM TV ads highlighting how the middlemen limit patient access to needed medicines and fail to pass on discounts to consumers.

 Conversely, America’s Health Insurance Plans (AHIP) has financed a million-dollar campaign blaming pharma companies for high drug costs. And the PBMs’ Pharmaceutical Care Management Association (PCMA) is airing ads to highlight the benefits of their operations and the need for drug patent reform.

At this point, it seems that pharma is winning the policy and rhetoric campaign against PBMs, as support has increased among Republicans and Democrats for legislation requiring these drug middlemen to be more transparent about their operations, particularly rebates negotiated with manufacturers and how they set payments to retail pharmacists. And more is slated to come from the Federal Trade Commission, which continues an investigation into whether PBM practices limit competition.

https://www.help.senate.gov/hearings/the-need-to-make-insulin-affordable-for-all-americans

https://www.finance.senate.gov/chairmans-news/wyden-crapo-release-legislative-framework-to-address-pbms-prescription-drug-supply-chain

https://catalyst.phrma.org/new-phrma-ad-campaign-sheds-light-on-pbm-abuses

Washington Correspondent and can be reached at

Articles

Amid drug pricing blame game, Congress advancing a range of reform efforts to manage and curb pharmacy benefit manager practices. 

Pharma-PBM Battle Escalates on Capitol Hill

The escalating attack on too-high prices for prescription medicines has heightened debate over the government’s authority to revoke licenses for medical products that are developed with support of public funds. The Department of Health and Human Services (HHS) and Department of Commerce (DOC) recently announced a broad review of the “march-in” authority provided in the Bayh-Dole Act of 1980 in the wake of its controversial decision to let stand licensing rights to a widely used cancer drug.

The review will be conducted by a new Interagency Working Group for Bayh-Dole, which is charged with updating the framework for altering march-in provisions spelled out in that legislation. A main issue is whether a high price for a product provides sufficient reason to revoke a manufacturer’s license. HHS will hold a workshop later this year to discuss when it might be appropriate to implement march-in rights, with input from patient groups, industry, academic, nonprofit organizations, and legal and policy experts. And the discussion will be informed by a recent publication from National Institute of Standards and Technology (NIST) that proposes changes to streamline and clarify licensing procedures for federally funded inventions.

This issue hit the headlines recently when the National Institutes of Health (NIH) rejected a petition to initiate march-in proceedings for the prostate cancer drug Xtandi (enzalutamide), marketed by Pfizer and Astellas Pharmaceuticals.

 Public interest groups had filed a petition in 2021 that called on NIH to take ownership of the patents on the drug due to its much higher cost in the US than in Canada and other countries, which limited patient access to the therapy.

At the same time, Congressional leaders highlighted the substantial NIH funding of Moderna’s COVID-19 vaccine in challenging the company’s plan to raise the price of the preventive when federal subsidies end in May. In testimony before the Senate Health, Education, Labor, and Pensions (HELP) Committee Wednesday, Moderna CEO Stephane Bancel emphasized the years of research and billions invested by his company to devise methods for quickly testing and producing such a vaccine].

 Committee Chair Bernie Sanders (I-Vt) highlighted the $1.2 billion invested by the federal government in the project in blasting the company’s plan to boost the price from $26 to $130 per shot with the end of the COVID health emergency.

The Bayh-Dole Act of 1980 provides a pathway to facilitate commercialization of inventions, including biomedical products, that are developed with support from federal agencies such as NIH. The program permits the government to “march in” to rescind licensing rights if it determines that the benefits of such inventions are not available to the public on reasonable terms. Over the years, various organizations have petitioned NIH and other agencies to initiate march-in proceedings when a product’s high cost might be considered a barrier to access. But federal officials have rejected such pleas, as with several petitions related to Xtandi.

In rejecting the latest filing on Xtandi, NIH stated that the aim of Bayh-Dole is to promote commercialization and public availability of government-funded inventions, and not necessarily to ensure a low price for a covered medical product. NIH noted that Xtandi is widely available to patients, and that instituting march-in rights was unlikely to lower the price. Sen. Sanders and patient advocates clearly disagreed with the NIH decision, pointing out that Xtandi can be purchased in Canada for one-fifth the US price. But manufacturers and industry experts counter that without private sector investment and know-how, most government-funded research would never move from the laboratory to the marketplace—at any price.

is Pharmaceutical Commerce's Washington Correspondent and can be reached at jillwechsler7@gmail.com.

https://www.hhs.gov/about/news/2023/03/21/hhs-doc-announce-plan-review-march-in-authority.html

https://www.keionline.org/wp-content/uploads/NIH-rejection-Xtandi-marchin-12march2023.pdf

https://www.help.senate.gov/imo/media/doc/Stéphane%20Bancel%20Written%20Testimony.pdf

https://www.help.senate.gov/chair/newsroom/press/prepared-remarks-help-committee-hearing-on-moderna-covid-19-vaccine-pricing-ceo-to-testify

Amid continued tussling over drug costs, a new working group will review the government’s authority to revoke licenses for medical products.



Feds to Review March-In Authority on Drug Patents

The spotlight on rising prescription drug costs also is focusing more attention on the role of drug plan middlemen in shaping patient access to and outlays for medicines. Congressional leaders are investigating how pharmacy benefit managers (PBMs) determine health plan coverage and charges for medicines, as is the Federal Trade Commission (FTC). Independent pharmacists also are loudly protesting certain PBM practices, and pharma companies readily support the shift in focus toward PBM practices and away from manufacturer launch and list prices.

The Senate Commerce Committee held a hearing in February to examine PBM business practices and their impact on costs and coverage for consumers.

 Healthcare experts testified on the need for more transparency into harmful PBM business practices, including “fail-first” and prior authorization requirements that can delay or deny coverage, limits on copay assistance, and efforts to steer high-cost patients away from plans. Committee Chair Maria Cantwell (D-Wash) and Sen. Chuck Grassley (R-Iowa) have proposed legislation to enhance transparency in PBM practices seen to inflate drug costs and limit patient access.

More recently, the House Committee on Oversight and Accountability announced a probe of the role of PBMs in pharmaceutical markets, an effort begun by Republicans and now revived by the panel’s chairman, Rep. James Comer (R-Ky). Minority Republicans issued a report last year on the role of PBMs in stifling competition in pharma markets

, and now Comer is following up with letters to PBMs and federal health plans on a range of policies and practices. Letters were sent March 1 to the top three PBMs—Express Scripts, CVS Caremark, and Optum Rx—requesting a long list of documents related to formulary design and management, rebates and fees paid to companies and insurers. The Oversight Committee analysts want to better understand whether such PBM policies compel manufacturers to pay hefty fees and to offer steep discounts to the middlemen to gain favorable formulary placement and less restrictive coverage policies for patients.

The House panel also sent letters to the Centers for Medicare and Medicaid Services (CMS), the Office of Personnel Management (OPM), and the Defense Health Agency (DHA) seeking more details on how these federal health programs interact with PBMs related to rebates, fees, and other charges involving government prescription drug coverage programs.

 And in response to retail pharmacists, the investigators seek information on tactics allegedly used by PBMs to steer business to those pharmacies that accept reduced reimbursement and pay retroactive rebates and fees, which shift costs from PBMs to insurers and pharmacies. The National Community Pharmacists Association (NCPA) applauded these efforts by Congress to challenge PBM practices “that are distorting the pharmaceutical market and limiting high quality care for patients.”

The FTC is analyzing similar issues in its investigation of whether a few large PBMs exercise excessive control of the pharmaceutical market. In February 2022, the Commission announced a formal inquiry into the effects of PBM consolidation and vertical integration with large health insurance companies. The resulting volume of comments and criticisms of PBMs sent in prompted the agency to unveil plans in June 2022 for ramping up enforcement against illegal rebate schemes involving drug companies and drug middlemen.

The stated goal for the legislators is to better understand whether PBMs actually reduce drug costs and save money for health plans and consumers by negotiating rebates and discounts with manufacturers—or if the middlemen merely pocket those savings and limit access to important medicines from firms that fail to ante up. Manufacturers support these efforts, insisting that PBM demands for rebates and discounts drive up list prices for all medicines. And while patients in covered health plans may benefit from the lower negotiated prices, higher list prices can boost their insurance premiums and copays.

PBMs are fighting back, as seen in efforts by the industry’s Pharmaceutical Care Management Association (PCMA). The industry maintains that the proposed Senate legislation would raise costs for employers and patients and do little to limit deceptive practices.

Jill Wechsler is Washington Correspondent for MJH Life Sciences’ pharma sciences brands.

 https://www.commerce.senate.gov/2023/2/bringing-transparency-and-accountability-to-pharmacy-benefit-managers

https://oversight.house.gov/wp-content/uploads/2021/12/PBM-Report-12102021.pdf

https://oversight.house.gov/wp-content/uploads/2023/03/Letter-to-CMS.pdf

https://ncpa.org/newsroom/news-releases/2023/03/01/house-committee-investigation-keeps-heat-pbms-ncpa-says

 https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-launches-inquiry-prescription-drug-middlemen-industry

Latest investigation signals more scrutiny of pharmacy benefit managers and their role in treatment cost and coverage. 




Congress Probes PBM Link to Higher Drug Prices

Amid continued bombing, death, and destruction from the Russian invasion of Ukraine, biotech companies and medical product manufacturers have condemned the aggressive tactics of Vladimir Putin, while also looking to maintain supplies of essential medicines to the beleaguered populations. As the invasion of Ukraine has escalated since late February, prompting more than two million citizens to seek safety outside its borders, international energy suppliers, global manufacturers, leading retailers, and major financial institutions halted trade and interactions with Russia. But most international pharma companies have remained in Russia, claiming humanitarian reasons for continuing to supply patient populations with needed therapies and health products, including those dependent on vital new treatments.

Biotech industry leaders, however, have been vocal in calling for a halt to investment in Russian companies and support for research and marketing in that country. In a letter dated Feb. 27, company CEOs acknowledged likely delays in clinical trials in both Ukraine and Russia and difficulties in producing vaccines and drugs needed in those countries. Venture capitalists joined with manufacturers in anticipating supply chain disruptions, but emphasized the importance of condemning Russia’s deliberate “criminal act” for disrupting the global economy and ruining the lives of so many.

Decisions to maintain Russian manufacturing and marketing operations by industry leaders such as Johnson & Johnson, AstraZeneca, Pfizer, Novartis, and Abbott, however, have drawn fire. Many US and European firms have multiple facilities in Russia and sponsor hundreds of clinical studies in the region. Some CEOs say they will not expand investment in Russia, but will continue to produce medicines to meet public health needs.

In an interesting move, a former FDA official and rare disease advocate Tim Cote petitioned the agency to freeze all regulatory requests and actions from firms in Russia or controlled by Russian parties. The aim is to prevent Russian biopharmaceutical companies from building a presence in the US market, one way to emphasize the economic consequences of their nation’s actions.

A major concern is how the invasion threatens to limit or halt clinical trials for drugs and biologics in both Ukraine and Russia, often cutting off research programs that enable patients with critical conditions to access advanced therapies. Ukraine-based drug companies and clinical trial sites have all but collapsed, as the Russian invasion has destroyed hospitals and research facilities. Andbiopharma companies are halting enrollment in many clinical trials in Russia, as the outlook continues to deteriorate.

Analyses by Clinical Trials Arena and others document a sizeable number of research programs had been underway in those nations, many part of global research programs.

San Francisco-based pharma company Tricida, for example, recently acknowledged that the horrifying situation in Ukraine prompted it to delay expectations for clinical trial results for its chronic kidney disease drug candidate veverimer.

 Many clinical trials in the region, though, involve approved drugs seeking broader markets for therapies already available in the US.

Russia’s actions are slated to have a visible impact on pharmaceutical and vaccine production in India, where vaccine makers have extensive contracts to produce Russia’s Sputnik V COVID-19 vaccine for global distribution. India’s Dr. Reddy’s Laboratories, Serum Institute of India, and Hetero are leading distributors for the Sputnik vaccine, according to press reports. But Sputnik production has been slow and far below earlier expectations, even before the Ukraine crisis, as the Russian product gained only limited market acceptance. The situation is unlikely to change, as efforts by Russia to gain approval from the World health Organization (WHO) for its Sputnik vaccine appear to be on hold.

In addition, analysts anticipate supply disruptions and price increases for certain raw materials and supplies imported from Russia. Rising prices in oil and natural gas could boost the cost of certain plastics used in syringes and medical bottles. And the higher cost of transportation may curb access to certain materials over the long term, further heightening efforts to boost US production of medical supplies and products.

https://medium.com/@BusinessLeadersForUkraine/call-for-business-leaders-to-economically-disengage-from-russian-industry-5e0352f89f5a

https://www.clinicaltrialsarena.com/analysis/ukraine-industry-sponsored-clinical-trial-development-at-risk/

From supply-chain and clinical-trial disruptions in Ukraine and Russia, to decisions to halt investment or maintain operations, global implications for industry and pharmaceutical production are immense.

Ukraine Invasion Challenges Biopharma Research and Operations

Despite major challenges and demands created by the coronavirus pandemic, FDA maintained a steady pace in 2021 in approving important new therapies for market entry, including new vaccines and treatments for Covid-19. Last year saw the Center for Drug Evaluation and Research (CDER) approve 50 new molecular entities (NMEs), many benefitting from priority and accelerated review timelines. In addition, the Center for Biologics Evaluation and Research (CBER) approved several vaccines and cellular products to further expand the new medicines list.

 is slightly less than the 53 novel drugs brought to market in 2020 and the 2018 record total of 59 innovative therapies. As in recent years, a majority of the new products received orphan drug status, and 15 had indications to treat cancer. More than half moved forward through expedited procedures, 14 benefitting from accelerated approvals and 32 granted priority reviews. Continued requests for faster vetting requires additional involvement of CDER experts to provide R&D advice and to meet tighter deadlines, which agency officials say cannot be sustained without additional review staff and resources.

 10 biologics license applications (BLAs), notably one granting full approval for Pfizer/BioNTech’s Comirnaty vaccine. Some analysts include only about half of these in combined lists of FDA’s new NMEs, notably new vaccines for hepatitis B virus and for tick-borne encephalitis, and therapies for myeloma and lymphoma.

Probably the most discussed new drug is Biogen’s Aduhelm for Alzheimer’s disease, which CDER okayed for market despite limited evidence of its efficacy and a thumbs-down on approval from its advisory committee. FDA reviewers, however, decided its benefits outweighed risks, as no other treatment is approved for this very serious condition.

Other notable new therapies from CDER include treatments for myasthenia gravis, lupus, Pompe disease, severe asthma, sickle cell disease, to prevent dwarfism in children and to manage very high cholesterol. Lung cancer, endometrial cancer and leukemia gained added treatment options, as did transplant patients.

The lists, moreover, do not include those innovative Covid therapies and vaccines granted emergency use authorizations (EUAs). In December, FDA authorized two notable oral medications to treat early Covid infections—Pfizer’s Paxlovid and Molnupiravir from Merck and Ridgeback Biotherapeutics—providing a more accessible alternative to antivirals that require infusion in a clinic or doctors’ office.

Analysts note that several additional new products failed to gain approval in 2021, due to FDA’s inability to conduct necessary inspections of certain manufacturing sites. That situation is unlikely to change any time soon, as the agency has once again pulled back on inspectional activities due to the spread of the Covid omicron variant.

Last July, FDA revived efforts to ramp up inspections of domestic production facilities, an effort that made a notable dent in the agency’s sizable inspection backlog for medical products. The hope was to visit most of the 3,000 sites in need of oversight in 2022 and also to test a new program to enhance foreign inspection operations.

These goals were put on hold with the agency’s 

 this week that it would continue only mission-critical inspections through Jan. 19, and postpone most other inspectional activities, including foreign site visits. Also delayed is the planning effort set to begin in February for revising foreign inspection assignments in an effort to address challenges in staffing overseas offices and rebuilding the cadre of US-based inspectors willing to travel to foreign drug production sites.

Meanwhile, FDA will continue to use remote tools to maintain oversight of foods, drugs, medical products and tobacco at home and abroad.

— Jill Wechsler, Washington Correspondent for MJH Life Sciences’ pharma sciences brands

Pandemic notwithstanding, the agency maintained a steady pace in 2021 in clearing important new therapies, including new vaccines and drugs for Covid

No slowing of approval train at FDA 

As Congress struggles to reach agreement on major legislation to fund leading administration social and spending initiatives and to raise the debt limit to avoid default on government borrowing, the White House is emphasizing that reduced spending on prescription drugs can help offset some of the steep costs. President Joe Biden highlighted how current proposals for curbing outlays on pharmaceuticals will help protect patients’ health and save the government billions in a 

 yesterday on strategies for controlling drug costs.

Even though Biden applauded the efforts by pharmaceutical companies in developing life-saving vaccines and treatments for fight Covid-19, he criticized industry for jacking up prices on medicines that have been on the market for years. This leaves Americans paying “the highest prescription drug prices of any developed nation in the world,” he stated, lamenting that many patients struggle to afford needed therapies as a result.

Biden pointed to provisions in the Build Back Better (BBB) bill, which is pending before the Senate, that would change the equation. To help all consumers afford medicines, the legislation would set a $35-a-month cap on cost-sharing for insulin for all patients, impose a stiff tax on manufacturers that raise prices faster than inflation and expand access to health insurance and Medicaid.

And to reduce Medicare drug expenditures, the legislation would open the door to government negotiation of prices on certain older drugs, while also capping annual outlays for seniors at $2,000 a year. These provisions were approved by the House following lengthy negotiations with moderates anxious to protect incentives for biopharmaceutical R&D. One result is that the current measure limits Medicare price negotiations to only 20 drugs that have been on the market enough years to have lost exclusivity.

Even so, there’s strong opposition to the drug pricing proposals from Republicans, and the provisions may need to be revised and narrowed to avoid violating Senate budget rules that limit the type of legislative changes eligible for consideration in spending bills. At the same time, a calculation by the Congressional Budget Office (CBO) that the drug pricing provisions would save the government about $160 billion over 10 years has built support for the package from Senate moderates who object to excessive federal spending. Senate majority leader Charles Schumer (D-NY) has set a goal of enacting the $1.7 - $2 trillion BBB social-spending and climate change legislation by Christmas, but there’s a lot of skepticism on Capitol Hill about meeting that time frame. A more immediate deadline is for Congress to authorize an increase in the federal debt ceiling before it expires next week, a situation that continues to muddy the broader negotiations on spending and revenues.

Biden touts provisions administration believes can curb spending on pharmaceuticals