A New Analysis Questions the IRA’s Orphan-Drug Exemption (Without Talking Tradeoffs)

There’s a lot to go through this morning. Let’s get at it.

I’m thinking about rare diseases this morning for a couple of reasons. 

First, there is this JAMA Internal Medicine piece from the folks at Harvard PORTAL (with an assist from some Harvard Business School colleagues) that suggests that exempting orphan drugs with a single orphan designation from IRA price controls will mean billions in additional spending by the government each year

I have no reason to quibble with the math, though it’s worth noting that an analysis that only focuses on the “winners” — the orphan drugs doing more than $200 million in gross Medicare sales — is probably not the best way to get an overall feel for the orphan drug market. 

But let’s be real: the analysis is not really about the question of whether Medicare spends too much on orphan drugs for Medicare patients. Even taking the JAMA IM analysis at face value, we’re talking about something less than a percent of Medicare’s overall drug bill. 

I suspect that the underlying question is whether orphan drugs need any incentives at all, or if we can scrap not only the IRA’s exemption but the whole rare disease edifice without any impact on innovation. That’s certainly the tone of the paper’s “Discussion” section, and that’s the slippery slope that worries me. My suspicion is that, if you look beyond just the “winners,” you’d find that orphan drug development is fraught with risks, but we want to incentivize companies to take those risks. 

Second, we need those incentives because the work is hard and the need is great.

Those ideas are at the center of two must-read pieces on rare-disease innovation. The first is a wonderful and deep USA Today piece about the development of so-called N=1 medicines … drugs developed for a single individual. The other is a Washington Post article about work around SCID (or “Bubble Boy disease”). 

Neither N=1 treatments nor, likely, SCID approaches will be profitable. But what we’re learning from these scientific challenges will be integrated into other approaches, and — indeed — that process works in reverse, too. Today’s commercial successes create the foundation for these small-but-critical efforts. If you mess with the incentive structure, you put the ecosystem at risk. 

I’m probably not the best person to make this case — I’m sure we’ll hear from patients and advocates, loud and clear, on efforts to roll back support for orphan drugs — and I don’t want to imply that this is not something worth discussing. But let’s be honest about the tradeoffs.

I don’t know what to make of this Health Affairs Forefront piece about how CMS should use therapeutic alternatives in its price-control effort. On the one hand, I’m sympathetic toward any calls to make the process more formal and structured. On the other, I’m wary of efforts to import approaches used outside the United States. 

A couple of launch-price announcements to flag: Springworks’ treatment for rare desmoid tumors will list for about $29,000 a month. And Coherus will launch its Chinese-developed PD1 cancer drug at a 20% discount to the class leader, Keytruda. Fierce’s coverage here is worth the read, and it’ll be interesting to see what impact — if any — this kind of “modest” discount (Coherus’ phrasing) will have in the market. 

There were three new IRA-lawsuit filings over Thanksgiving week. I don’t think any of them necessarily advance the narrative, but if you love legalese, here are the briefs from  BMS, Johnson & Johnson, and Novartis. 

On IRA lawsuits, the question is less and less “What are the industry/government arguments?” and more “When are judges going to weigh in?” That’s a process that is about to accelerate: HHS is due to submit its final brief in the Merck case tomorrow, which is a trigger for, presumably, oral argument and a decision. So if you’ve stopped paying attention, it’ll soon be time to re-engage. 

The Maryland prescription drug affordability board will apparently name the drugs eligible to be kneecapped by the state price-setting group next year, according to this report. 

I made a brief note of insulin-related litigation yesterday, and I’ll make another brief note today of a STAT story on the topic. But I still have seen no good analysis of whether any of this is likely to change anything. 

KFF framed the release of some new data cuts around perceptions of insurance as evidence that Medicaid is bad insurance, in the eyes of beneficiaries, anyway. But the whole poll is worth revisiting because it emphasizes that — even if Medicaid patients aren’t particularly harmed — a lot of Americans with insurance think that they’re paying too much for coverage that they don’t understand. 

The Washington Post has a useful editorial out on the crumbling infrastructure of our pharmacy system. The suggested fix is trying to get PBMs under control, particularly at the state level.