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I’m of two minds about the first day of #JPM25.
On the one hand, there was very little around the objective state of the industry when it comes to pricing and health policy.
Pfizer remains the only big pharma to break out the impact of Part D redesign, and there was no commentary on how specific price-control elements would affect industry.** There wasn’t much on PBMs, either.
Now, that may change today, with presentations from some of the industry’s more dynamic CEOs (Ricks, Narasimhan, Soriot). But those looking for specifics are probably disappointed.
That doesn’t mean there hasn’t been any chatter. Lilly’s David Ricks told Bloomberg that he’s pushing the Trump administration to hold off on new negotiations until the IRA can be fixed, and that utterance drew a lot of attention. The vehicle by which the Trump CMS can slam the breaks on the IRA is not entirely clear.
Pfizer’s Albert Bourla, too, waded into the topic of Trump 2.0 in his presentation, suggesting that the opportunities over the next four years outweighed the risks. Part of the optimism, Bourla said, was related to Trump’s interest in addressing cancer. That feels a little retconned, but it’ll be notable if industry can change the conversation in that way.
But my favorite Bourla line came around the topic of Trump, Robert Kennedy, Jr., and vaccines. Bourla made an interesting appeal to public health realpolitik: “If we go below a specific threshold [of vaccination], we will start having an epidemic, and that will be detrimental for him and the administration.”
I read that as, “Nice presidency you got here. Shame if a measles outbreak happened to it.”
Which I love.
(To be sure, that wasn’t the tone in which Bourla delivered the line, but I still love it.)
***
Outside of the bounds of the conference, there was more extended discussion of policy. PhRMA’s Steve Ubl, speaking at an Endpoints event, made clear where his organization would be focused this year, leaning into both PBM and efforts to get rid of the pill penalty.
“That makes little sense to us, for a whole host of reasons,” he said, “not the least of which is, ‘Why are we incentivizing more expensive medicines?’” That’s a really important point, and I hope to drop some data on that this week/next week.
Also catching my ear: Trump 1.0 CMS head Seema Verma, speaking at a STAT event, opined that maybe rebate reform could make a reappearance as part of the PBM attacks. “I would be surprised if we didn’t see some action there.”
** One exception: Merck talked about how it might price a coming subcutaneous version of Keytruda in light of presumed price controls for the infused version of the medicine in 2028.
There is a lot of exposition in this section, so here is the tl;dr: the median launch price of a new drug fell between 2023 and 2024. I don’t think this statistic alone is meaningful, any more than I thought the increase between 2022 and 2023 was meaningful.
***
One of the great truths about drug pricing is that we’re about to move away from an era where everyone cared a lot about price increases. Now, those increases are — by and large — either nonexistent (on a net price basis) or marginal (compared with inflation).
This hasn’t always been true, but it’s the current reality.
Instead, we’re going to be talking more about launch prices of medicines. This switch is going to be fraught for a number of reasons, not the least of which is that the data used to describe this trend is not particularly transparent or clear.
One wrong way of trying to talk broadly about year-over-year changes in launch price is to look at all of the new medicines approved in a given year and calculate the median price of a medicine at launch.
This is an approach that Reuters has jumped on, running a story every year based on its calculation of that single figure. Last year, the outlet noted that the median price of a launch drug rose 35%.
The Reuters number is becoming a big part of the foundation of the launch price story: it cited that year-over-year launch price number in its price-hike story earlier this month, and I’ve seen some other industry voices (who should, perhaps, know better) further amplify it.
It doesn’t require a lot of deep thinking to come up with reasons why the Reuters number is not a very good marker of anything: not all medicines have prices (or have public prices) at approval; the number of medicines approved every year isn’t large enough to draw clear conclusions; the mix of medicines (e.g. a shift to or from orphan drugs) may change, by chance or by trend, carrying implications for launch prices.
You can probably come up with your own skeptical take.
If you can’t — if you think that the Reuters number should be taken seriously — then I’d like to give you some warning: the median launch price of a new drug fell modestly between 2023 and 2024, by my math (which considers launched medicines, including cell and gene therapies). I look forward to seeing how Reuters handles this inconvenient fact.
Does that mean that launch prices are headed down? Of course not.
But it does mean that concentrating on that single figure is probably foolish.
Launch prices are still a legitimate topic for discussion, and I look forward to thoughtful ways of dissecting those prices. This JAMA piece, for instance, includes analysis by drug type. This JAMA Health Forum work makes some international comparisons. Those aren’t flawless analyses, but they’re light-years ahead of what Reuters did.
The PhRMA lawsuit over the IRA has taken some twists. First, a district court tossed the suit because it said that PhRMA and its co-plaintiffs didn’t have standing to sue. Then, an appeals court tossed that decision last September, sending the whole shebang back to the district court to be litigated again.
That process has now officially kicked off, though I don’t expect to see any particularly novel arguments made. PhRMA’s first brief in the resurrected case was filed Friday, and Bloomberg Law has coverage (by Nyah Phengsitthy, natch). The government’s brief is due in early March, and briefing is slated to wrap up by May 13.
ELSEWHERE:
This is just masterclass-level shade-throwing at PBMs by the guy overseeing “pharmacy transformation” at Blue Shield of California in a Fierce op-ed: “The writing is on the wall. The traditional PBM model is doomed to be a shell of itself within the next five years.” Still … is it weird that we don’t have any details on the launch of the reimagined Blue Shield pharmacy benefit program?
This is a nice Real Clear piece by Patrick Plues, a BIO SVP, that outlined some of BIO’s policy priorities, including a focus on PDABs and awareness-raising about the “pill penalty.”
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.
