This new white paper from BRG is an incredible resource. It breaks down exactly where the money goes in the pharmaceutical supply chain with a lot of precision, and it ought to be a clip-n-save resource for anyone interested in how much of gross sales of pharmaceuticals end up in the pocket of others in the ecosystem. 10/10 must-read.
This STAT piece on the coming price-control “negotiation” over Ozempic/Wegovy is deeply unsatisfying.
The thesis is that the emergence of a generic GLP-1 could be used as a way to push down the eventual “maximum fair price” for Ozempic. And while that’s possible, it’s not remotely dispositive, and it underscores the hazards in trying to mind-read CMS.
Three quick critiques:
FIRST. The existence of a cheaper, not-quite-as-good “therapeutic alternative” does not mean that CMS is automatically going to use that alternative to drive prices down. I can think of at least a couple of examples where CMS could have used that logic in the first round of negotiations but didn’t. Those counter-examples aren’t aired by STAT.
SECOND. To be clear, CMS could use generic Victoza’s price to seek additional price concessions, but the absolute lack of any sort of prospective standard or after-the-fact explanation for how the first round of prices was determined means that it’s a total crap shoot.
This is one of the fundamental problems with the implementation law: no one knows how CMS operates, even the companies involved. This never arises in the STAT story.
THIRD. STAT talks to some very smart people for its story, but it’s folks who are generally partisans for the idea that we should have aggressively lower “maximum fair prices.” And that’s all well and good, but there’s a fine line between advocating for a specific future and dispassionately predicting that future, and I think STAT may blur that line.
Anyway: we’re going to hear a lot more about “negotiations” in the next two weeks. As a relatively lightweight Axios story makes clear, everything thinks that the next group of meds — 15 of them, which will include Ozempic — will drop in the next two weeks.
For background on which 15 drugs are likely to be included, check out my post from last month.
I’m not going to J.P. Morgan this year because … priorities.
But in the spirit of sour grapes, here are four reasons that I’m making the right decision (tomorrow, I’ll have my list of reasons why I’m making a mistake).
It’s the Annual Triumph of Hope Over Experience. Every year, JPM is shot through with optimism. Some years, it’s warranted, so years it’s not. But everyone shows up in the sunniest possible mood, making it a terrible place to read the “vibes.”
So I won’t miss the rosy groupthink.
When It Comes to Federal Policy, Nobody Knows Anything. This is a dead horse that I’ve beaten before, but it’s relevant to JPM. There will be thousands of conversations, both formal ones in the overpacked St. Francis and informal ones at a hundred overcrowded bars, on what RFK Jr. might think or whether Republicans will prioritize PBM reform.
No one has special insight into those questions, though that won’t stop folks from spinning up answers.
JPM Is Not About Disruption. Health care is in for changes, and they will be catalyzed by unheralded experiments in every possible sector. Many of those experiments will fail, and most will be undertaken without a lot of hoopla. I’m hugely interested in understanding what kind of disruption is cooking, but JPM has never been a platform for unveiling the Next Big Thing.
The Big Policy Question Has Been Answered. For a couple of years now, folks have been wondering about the impact of the IRA, namely: Would price controls leave a mark? And we pretty much have the answer now that CMS has set the first 10 “maximum fair prices.” There is still a lot of room for uncertainty (see “Inflection Point,” above), but there’s not much more than the conference is going to be able to deliver.
This is a helpful overview of what Mike Crapo, the incoming chair of the Senate Finance Committee has, on his agenda. When it comes to health, PBMs are at the top of the list. We’re not doing with this topic, not by a longshot.
Bloomberg is editorializing against the United States’ employer-based system for providing health insurance, suggesting that the tax benefits that prop up the whole system be phased out. If you’re looking for ideas that are radical — but not too radical — this ought to be on your list.
At the top of pretty much every “Everything You Always Wanted to Know About Health Care* (*But Were Afraid to Ask) list is: ”What the h*ck is a specialty drug?” Thanks to a great article in Health Affairs Forefront from Joey Mattingly and one of his students, Dylan Kacerek, we now have a pretty good answer.
Mel Whittingham and her team at Leerink’s Center for Pharmacoeconomics are doing important work pushing out interesting, let’s-start-a-conversation analyses of drug value. Their latest effort looks at Dupixent for COPD and found that “societal benefits for COPD should outweigh its cost even at US market-based pricing over the exclusivity period.”
I’m amplifying this post by Frank David on “Red flags in biotech press releases.” It’s a bit afield from the focus of this newsletter, but it’s just too good not to promote.
Yesterday, I suggested that there might be some hiccups in the early going on the Medicare Prescription Payment Plan. I was at my friendly globo-pharmacy this morning, and I asked them if they had any issues. From the response, it sounds like it’s going smoothly in the land of the vertically integrated behemoths. Make of that what you will.
Cost Curve is produced by Reid Strategic, a consultancy that helps companies and organizations in life sciences communicate more clearly and more loudly about issues of value, access, and pricing. We offer a range of services, from strategic planning to tactical execution, designed to shatter the complexity that hampers constructive conversations.
To learn more about how Reid Strategic can help you, email Brian Reid at brian@reidstrategic.com.
