Morning Briefing
Summaries of health policy coverage from major news organizations
Perspectives: Drug Development Doesn't Come Cheap, But Does It Really Justify Those Sky-High Prices?
Los Angeles Times: Gilead Says Drug Profits Must Stay High To Pay For 'Innovation,' But 100% Of Its Profits Went To Shareholders
In an interview published Friday in the Wall Street Journal, Martin listed a few reasons for the controversial pricing. One is that average Americans overestimate how much drug prices contribute to overall healthcare costs and how much drug manufacturers themselves pocket from list prices. Another is that drug makers need big profits so they can “continue to innovate.” ... To begin with, the evidence that Gilead itself uses its profits to “innovate” is thin at best. (Michael Hiltzik, 10/23)
The Wall Street Journal: The Business Of Saving Lives
‘We don’t apologize for being highly profitable until our patents run out,” says the man seated in the barest office of any corporate leader I’ve visited. There’s almost nothing on the walls, and the occupant, John C. Martin, tells me it’s because he moved into the space only “at the beginning of the summer”—long enough ago, one would think, to find an etching or two. One cannot escape the feeling that Mr. Martin, a 66-year-old chemical engineer who is executive chairman of Gilead Sciences, is not greatly given to adornment. He’s a plainspoken Midwesterner who lights up at the chance to talk about the medicines his company makes. And yes, it also makes money. (Tunku Varadarajan, 10/20)
Stat: Why A California Law To Rein In Drug Prices May Not Make Much Difference
For one, the law does not actually allow the state to control pricing. Instead, the effort is really designed to “shame and blame” companies by publicly calling out those that boost list prices for their drugs more than 16 percent cumulatively over two years. To an extent, this approach makes sense, because drug makers want to avoid scrutiny. As a result, companies “will try, at least initially, to minimize being an outlier,” Leerink analyst Geoffrey Porges wrote investors. But over time, he suggested it might backfire, as some drug makers could raise prices significantly higher than the 16 percent mark, “since if they go above the threshold, they might as well go well above it.” (Ed Silverman, 10/24)
Los Angeles Times: Lower Drug Prices? Trump Has One Idea, But Insurance Giant Anthem Has Another
The sky-high cost of prescription meds was back in the spotlight this week. First, President Trump said drug prices “are out of control” and drug companies are “getting away with murder." Then came news that the country’s second-largest health insurer, Anthem, will partner with CVS to launch its own pharmacy-benefit management business, or PBM — a move that Anthem said could save as much as $4 billion a year, which may be reflected in lower costs for patients. (David Lazarus, 10/20)
Forbes: Actually, Many New Cancer Drugs May Be Helpful And Worth Trying
You might have heard that many new cancer medicines offer little benefit. This month, the BMJ published a review finding that for most cancer drugs approved by the European Medicines Agency between 2009 and 2013, there was neither published evidence that they extend overall survival nor improve patients’ quality of life. In 2015, JAMA reported similar observations for oncology drugs approved by the U.S. FDA between 2008 and 2012. Both papers focused on evidence from randomized clinical trials. (Elaine Schattner, 10/24)
Bloomberg: Biogen Has An MS Meltdown Coming
Biogen Inc.'s third-quarter revenue, profit, and sales of a closely watched new medicine all exceeded analyst expectations. But all is not as rosy as the company's earnings press release Tuesday morning would make it seem. The market for multiple sclerosis drugs -- the source of the vast majority of Biogen's sales -- is heading for a competitive tipping point that the company will have a difficult time weathering. (Max Nisen, 10/24)
Forbes: Why Drug Makers Should Worry About Anthem's New PBM
News that Anthem will launch its own new pharmacy benefit manager in 2020 in partnership with CVS Health should worry the pharmaceutical industry. Insurers are closing ranks around a model that brings the PBM closer to the health plan in hopes of creating a savvier buyer of prescription medicines while seeking more transparency. UnitedHealth Group already owns OptumRx, a fast-growing PBM, and other insurers are looking at new relationships with PBMs. (Bruce Japsen, 10/19)
Forbes: Amazon Is About To Disrupt The Drug Industry, But Not The Way Most Think
It's now a foregone conclusion that Amazon.com will enter the healthcare sector. Every day there is another article on how Amazon is planning to dominate some new corner of the American economy. One day Amazon is taking down Grainger and Home Depot. The next it’s single-handedly taking down not only FedEx, but also UPS and the United States Postal Service. No sector seems safe as Amazon sails its ship into new waters. But those expecting Amazon to cannon ball into healthcare may need to bide their time. (Steve Brozak, 10/20)
Stat: From The C-Suite: Biopharma Execs Open Up On What Tests Them As Leaders
Welcome to the corner office! Each month, we’ll turn to a new panel of biopharma executives for insights about leadership and management — and tips for thriving in a roller-coaster industry. (10/24)
