This should be the last day of late Curves for the week. Back at you in the morning tomorrow. Probably off Friday for Terrier game day.
My gut on the latest 340B conflict — the one sparked when Johnson & Johnson said it was moving to a rebate model Stelara and Xarelto — is that nothing really matters here unless or until this moves to the legal system. Until then, it’s all just saber-rattling.
Yesterday, it was HHS rattling swords, sending a letter to J&J reiterating that it doesn’t think the company is following the rules and threatening both civil monetary penalties as well as what a 340B Report source called the “nuclear option”: kicking the meds out of government programs.
But 340B Report also provided some historical context: HHS made similar threats the last time there was a standoff, back in 2020 when contract pharmacy restrictions were beginning to become a thing. And those threats have (so far!) been rendered entirely empty by federal courts.
I’m not suggesting that those lawsuits are going to be analogs for the suits we’re almost certainly going to see here. Only pointing out that HHS’ judgments on what the 340B law does and does not allow are not particularly infallible.
There is so much wrong with Bernie Sanders’ claim today that generic companies can make Ozempic for $100 a month. To be clear: the claim itself is not, literally, wrong. I have zero doubt that a generic manufacturer could indeed bring a $100 product to market and profit.
But to say “Hey, people are willing to see this drug for $100” misses a bunch of points, and BIO.new hits on those well here.
I’m frustrated because Bernie keeps raising these drug-price boogeymen in the least constructive possible ways.
For starters, he’s living in this world in which there is no value attached to the innovation, which suggests a very dim view** of the importance of intellectual property as an engine of innovation.
I hate to state the obvious, especially to you all, but nearly all of the available branded medicines could be sold by generics companies for $100 a month or less, and the reason why we don’t allow that is that a country with widespread, immediate, politicized generation would be a country with new incentives to innovate.
Indeed, the force that is going to drive prices down to $100 is not government intervention but competition. There might be 16 new obesity meds on the market within five years. Prices are only going in one direction.
But the real issue here is that Sanders isn’t bothering to define the problem.
If the problem is “patients can’t afford this stuff,” the follow-on question is “Shouldn’t insurance cover it?” And if the answer is insurers can’t afford it, we should talk about why and whether we’re paying for/incentivizing the right kind of health care.
If the problem is “this is straining government budgets,” then — again — there’s an important question of what services governments should be prioritizing.
And maybe price is an element of those discussions. But to assume that the discussion starts and ends with government-dictated prices is not going to get us to a smart system that can deliver both access and innovation.
It’s just going to get us theater. And not even good theater.
** Bernie implicitly takes a pretty dim view of the capital costs associated with this stuff, too. A generic company that wanted to take over Novo’s market would have to spend billions of dollars over years and years on factory construction just to meet today’s demand. These meds don’t just fall out of trees. That’s probably why, even though Sanders claims GLP-1s can be made for $5 a month, generics companies told him they’d have to come in at closer to $100. Manufacturing ain’t easy, even if you don’t have to do R&D!
Ozempic is going to be selected for the next round of price controls. This is as close to a statement of fact as we have in this crazy world. You can imagine unlikely, off-the-wall scenarios in which maybe Wegovy doesn’t end up getting “negotiated,” but Ozempic is in unless the Humphrey Building gets swallowed by a sinkhole. Actually, it’ll still get price-controlled from within the sinkhole. Anyway: Bloomberg has a story in which a Novo exec said this at the Cantor conference, creating a bit of weakness in the stock, and that “scoop” got a lot of additional pickup.
Speaking of things that got a lot of additional pickup: most everyone ran with the story about Evernorth suing the FTC to make its mean report about PBMs go away. Not a lot new in those stories and not a lot of legal handicapping, so I’ll spare you the links. Should be messy, regardless. I’ll keep an eye on the docket.
Look, I get that ICER wants to make a point about gene therapy pricing, but they keep picking really terrible targets. Next up for ICER is Nanoscope Therapeutics, which is developing a vision-related gene therapy. As best I can tell, Nanoscope raised $13 million from investors back in 2020, plus a couple of small grants. In other words, ICER is picking on a company that, statistically, barely exists, developing a therapy in an area that has been a commercial disaster area, no matter the price. I’m not sure what point they could possibly make here.
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