AstraZeneca Loses Its IRA Legal Battle, But It’s Making Progress in the War Around Rare Disease

There are two ways of looking at the ruling against AstraZeneca in its IRA lawsuit. (If you want to catch up quick on the basics, Bloomberg Law has you covered.)

The first is as a matter of law, where the company seems to have lost fairly decisively. That doesn’t mean that there isn’t room for appeal, but I’m out of my element here. Former Sidley Austin partner Bill Sarraille has a couple of good posts on LinkedIn for a claim-by-claim take on things. 

The other way of looking at the suit is as a messaging effort. AstraZeneca has done an excellent job of concentrating its attacks on the IRA in a specific way: everything gets broad back to the impact on orphan drugs and the unique way that the IRA harms that kind of innovation. 

That’s literally the headline of the release announcing their lawsuit, back in August: “AstraZeneca urges re-examination of unintended consequences of Inflation Reduction Act on American cancer and rare disease patients.” The original lawsuit, too, has a meaningful focus on those issues. 

It’s not just the lawsuit, either. The company has been out there working for legislative change, too, lobbying for the ORPHAN Cures Act, which would fix the most egregious orphan provisions of the IRA.

AZ didn’t get distracted by overall innovation arguments. They didn’t detour to 9 vs 13 debates or raise their voice about the ways that access could be compromised. They’re laser-focused on the rare disease impact. I respect that from a communications POV. It transforms their objection from a broad, easily dismissed grievance to something clear and tangible.

(In the interest of disclosure: I don’t work with AZ, but I have mad respect for whoever the strategists are here.)

What has that effort generated? Well, last Thursday’s Rare Disease Day congressional hearing gave a glimpse: there’s now a vocal constituency for changes to the IRA around orphan diseases. It might not be broad enough or powerful enough to drive reform in the short term, but the idea that elements of the IRA need a re-think is now part of the political conversation. 

Unfortunately, the specific legal arguments in AZ didn’t end up aligning well with the broader rare-disease messaging. The court case ended up turning, largely, on the status of Farxiga, which is not remotely a rare disease drug (and wasn’t even mentioned in that initial press release). 

So while AZ might have taken an “L” in the courtroom, you can make the argument that the lawsuit contributed to the making progress being made in the long game: reforming the orphan drug elements of the IRA.

By now, you all know my line of obesity-medicine coverage: the medicines are cost-effective — they are a good deal for society — and so the big challenge is figuring out how we ought to pay for them. There needs to be a national debate. There will be tradeoffs. Sacrifices must be considered. 

That’s the adult way to think about it, and that’s the spirit of last week’s WSJ op-ed that implied it is unethical to deny coverage of obesity drugs just because they treat obesity, especially if we, as a society, are willing to spend money on things (in health care and elsewhere) that are less cost-effective. 

The less-adult argument around obesity coverage was published in the New York Times today. The piece is worth a read because it is the perfect encapsulation of how the debate can go off the rails. The guest essay suggests that we could end up spending (“conservatively”) a trillion dollars on weight loss drugs, never recouping that investment. 

It dodges entirely the question of what kind of value the drugs deliver, though it does, weirdly, call for an effort to “bring their costs in line with their social benefits” (as part of an argument for price controls) ignoring entirely the fact that — economically — those costs are already in line with their society benefits. 

The piece also plays games with pricing, suggesting the medicines will cost $15,000 a year. That’s not true on a list price basis (Zepbound, for instance, is just over $1,000 a month), and it’s absolutely not true on a net price basis, where all of the evidence points to rebates of 50% or so … and growing. 

Indeed, the guest essay suggests that obesity meds could be a replay of the hep C market, at enormous scale. But that’s to misunderstand what happened there: competition drove down prices for a massively cost-effective treatment by an enormous amount, but public policy — driven by a lack of a serious conversation about budget impact and tradeoffs — is still struggling to catch up. 

Whether or not you think that anti-obesity medicines will be a trillion-dollar market, we’re still going to need to have a sober conversation about what we’re going to prioritize to pay for them. And the NYT piece makes that conversation harder, not easier.

A brief update on transparency reports. Last week, I featured UCB’s release of some of its annualized drug pricing numbers, including its list-price, net-price, and average-discount figures. The company has updated a couple of those numbers in a revised version of the report, and its net-price change now shows up throughout the report as 0.4%. So for those tracking, please note the update. 

I’m about to drop out, turn on, and tune into the White House’s PBM listening session, which will be livestreamed here at noon ET. 

A big problem with novel ways of paying for advances such a gene therapy is that they’re cooked up by academics and other dreamers and never face the reality of the marketplace. So props to MIT’s Andrew Lo, who has founded a real-world company — Quantile Health — to make his vision of Netflix-type payments for gene therapy a thing. Quantile just raised $6 million, which isn’t a ton of money, but it’s further evidence that Lo is serious. 

I’m not sure why STAT just covered the month-old study about the availability of certain generic drugs at “direct-to-consumer pharmacies” (we talked briefly about it here last month), but the new story highlights a nugget that I missed in my original flag: the numbers are all screwed up. “Several of the prices listed are incorrect… They aren’t close,” said Alex Oshmyansky from Mark Cuban’s drug company. A study author basically claims that the inaccuracies are a feature of the paper, not a bug. Hmmm.