Radar on Drug Benefits

Policies aimed at slowing price growth in the most expensive drug categories could result in slightly fewer drugs coming to market, according to an analysis of the issue prepared by the Congressional Budget Office (CBO). While the pharmaceutical industry has used the report to back up its longstanding claims that drug development would be irreparably harmed by federal intervention on prices, employer plan sponsors and other payer groups insist that the impact of drug pricing policies on drug development would be marginal at most.

“The model uses estimates of changes in expected future profits or development costs to estimate the percent change in the number of drug candidates entering the various stages of human clinical trials,” the report says. “The paper considers a legislative change that lowers expected returns for the top-earning drugs. A 15 percent to 25 percent reduction in expected returns for drugs in the top quintile of expected returns is associated with a 0.5 percent average annual reduction in the number of new drugs entering the market in the first decade under the policy, increasing to an 8 percent annual average reduction in the third decade.”

A new startup, DiRx, has entered the prescription-drug-delivery fray, and will target un- and underinsured consumers with low-cost, generic maintenance medications. Experts say that the market is worth pursuing, but they observe that more established and better capitalized players such as Amazon.com Inc. and GoodRx have a head start on reaching those consumers.

DiRx launched in late 2020 with a $5 million seed round, and the firm’s CEO, Satish Srinivasan, tells AIS Health that they will close a Series A funding round in coming weeks. Srinivasan says the firm buys drugs directly from manufacturers and wholesalers, then sells directly to consumers. He adds that DiRx does not contract with PBMs and does not accept insurance.

✦ Consulting and actuarial firm Milliman, Inc. said on Sept. 7 that it has acquired SkySail Rx, a pharmacy benefit technology firm. SkySail specializes in leveraging data to support pharmacy benefit pricing and contract management, allowing clients to “dynamically analyze large amounts of pharmacy data to drive efficiency and compliance,” according to a press release from the companies. “By joining with an independent firm like Milliman, SkySail can enhance our unique industry approach and generate natural business synergies that provide clients with an unparalleled blend of valuable objective advice and innovative tools for managing pharmacy benefits,” SkySail Principal Chuck Gamsu said in a statement about the deal. Financial terms of the transaction were not disclosed.

✦ While the U.S. is still planning to widely distribute Pfizer Inc.’s COVID-19 booster shot starting the week of Sept. 20, the booster shot from Moderna, Inc. could lag a bit behind. That’s according to remarks made by White House Chief Medical Advisor Anthon Fauci, M.D. on CBS’s “Face the Nation” on Sept. 5. Fauci explained that only Pfizer may receive FDA approval for its booster in time for the planned end-of-September rollout, but Moderna should follow suit soon after. “So the bottom line is, very likely, at least part of the plan will be implemented, but ultimately the entire plan will be,” Fauci said.

The COVID-19 pandemic has dramatically altered health care delivery patterns. Hospitals have had to exhaust their resources caring for COVID patients, while other important health care services, like cancer screening, have taken a back seat.

While the pandemic is not over, vaccination efforts continue and lockdown orders have eased, allowing experts the chance to look back at how the pandemic has affected the patient journey and what this means for a post-pandemic world. Health care stakeholders, including life sciences companies, are starting to ask about lessons learned and what changes need to be made to provide better patient support.

✦ The FDA approved an additional indication for Jardiance (empagliflozin), allowing the drug to be used to “reduce the risk of cardiovascular death plus hospitalization for heart failure in adults with heart failure with reduced ejection fraction (HFrEF),” according to a press release from Boehringer Ingelheim and Eli Lilly and Co. According to an Aug. 18 press release, the drug was already approved to “lower blood sugar along with diet and exercise in adults with type 2 diabetes, reduce the risk of cardiovascular death in adults with type 2 diabetes who also have known cardiovascular disease, [and] reduce the risk of cardiovascular death and hospitalization for heart failure…in adults with heart failure.”

✦ The National Association of Medicaid Directors (NAMD) called on CMS to approve Aduhelm (aducanumab) for Medicare reimbursement. Jack Rollins, the director of federal policy for NAMD, the national group comprising each state and territory’s most senior Medicaid civil servants, wrote that leaving Medicaid programs to cover the Alzheimer’s drug by themselves could cause serious financial strain. While Medicare can opt not to cover certain drugs, Medicaid is required by law to cover any FDA-approved drug. “NAMD estimates that Aduhelm will cost Medicaid $1 billion in state and federal dollars if Medicare covers the drug. If Medicare doesn’t and Medicaid is forced to do so, then state and federal costs for this unproven product will skyrocket to $2.6 billion — an increase of over 250%,” Rollins wrote.