| | | |   | Good morning, and happy Tuesday, D.C. Diagnosis readers. It’s an honor to be in your inbox at such a momentous moment for drug pricing policy in Washington. I devoted much of the last four years to covering this issue, and I did my best to distill how big a deal this is (and in many ways, how small!), in this sweeping story this weekend. Love it or hate it, the policy is going to reverberate for years to come. If you have questions or story ideas, please reach out to your bleary-eyed author at rachel.cohrs@statnews.com. | | | So who’s this plan actually going to help? 
(adobe) The final drug pricing package the Senate narrowly passed this weekend isn’t going to help everyone struggling with drug costs. So I talked to a few experts to figure out who might actually see lower drug prices at the pharmacy counter.
The direct effects will mostly be for patients on Medicare — particularly those who pay high drug costs now, or who are on the brink of getting extra subsidies for low-income patients, or those who use insulin.
Get the full explanation in my new story here, including the wild card that analysts are having trouble predicting. | Wait... does this plan help patients who don’t have Medicare? The drama with the Senate parliamentarian this weekend ratcheted up a debate that’s new to the pharmaceutical industry — if Medicare pays less for drugs, are drug makers simply going to charge other patients more?
Quick recap: The Senate’s rules referee struck down a policy that would have penalized pharmaceutical companies for price hikes based on what they charge patients who get their insurance through their jobs. It was designed to protect insurers from potential pricing backlash to lost revenues in Medicare.
Now, employer groups (and the Wall Street Journal’s editorial board) argue that drug makers are just going to try to make up the lost money in Medicare by raising prices elsewhere. It’s a debate that is familiar to the hospital industry, which has long justified its high sticker prices by claiming they have to make up for Medicare payments that are too low.
But some experts are arguing that there’s little empirical evidence that cost-shifting happens in the hospital market, and there’s little reason to expect it this time. Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, argued that if drug makers could be squeezing bigger margins out of the private market now, they would.
This debate’s not going away anytime soon, and it’ll be worth watching as time goes on. | Even as the Senate closed in on drug pricing reform, biotech stocks climbed 
Biotech investors and trade groups have been sounding the alarm for weeks that Democrats’ drug pricing plan would devastate investment and innovation among firms that develop cutting-edge medicines.
But the sector’s stock prices apparently haven’t gotten the memo.
The sector has had a strong month — the bellwether XBI index has risen nearly 18% since Aug. 1 — and investors seemed unperturbed by Congress’ pursuit of drug pricing reform. The index closed on Monday about where it opened.
It’s worth noting that the final bill has a provision that specifically goes easier on small biotech firms than large pharmaceutical companies in the Medicare negotiation process.
| How Neurofilament Can Unlock Advances in Neuroscience and the Treatment of Devastating Neurological Diseases Over the last few decades, neuroscience has taken a quantum leap forward, and research is driving new advances. One of the most promising developments has been the discovery of a biomarker prevalent among many devastating neurodegenerative diseases – neurofilament. Biomarkers, such as neurofilaments evaluated through simple blood tests, hold the potential to revolutionize our ability to diagnose, treat and monitor people with devastating diseases such as ALS, MS and SMA. | Would Wall Street’s latest loophole theory actually work? A few Wall Street analysts have floated a theory lately for how drug makers could avoid Medicare negotiation, but the companies who make generics and biosimilars aren’t so sure it would work.
Under the bill, Medicare can only negotiate the prices for drugs that don’t have competitors. So SVB Securities and Evercore ISI analysts have both suggested that drug makers could simply allow limited competition for their brand-name products to make sure they technically don’t qualify as a “single source” drug. Under that logic, drug makers would actually have more incentive to let competitors on the market earlier.
I asked Craig Burton, executive director of the Biosimilars Forum, about that theory, and he said he thinks the legislation could have the opposite effect. Instead, he predicts, the new process could incentivize drug makers to stave off competition until the negotiation kicks in, which could allow them to keep more market share over time.
“All the brand has to do is make sure they have a robust patent estate, and that's one more hurdle that our guys have to have to overcome in order to enter” before the Medicare negotiation process starts, Burton said. | The glaring health equity gap in the drug pricing plan While Democrats’ plan beefs up assistance to help low-income Medicare beneficiaries for their prescription drugs, it maintains unequal treatment for poor adults 65 or older living in Puerto Rico.
Residents of Puerto Rico pay the same Medicare taxes as other Americans, but they’re eligible for less help than other older adults when it comes to paying for their pharmacy drug premiums and their prescription drug costs. The difference is one microcosm of the inequitable treatment of residents of the U.S. territories that has deep ties to a racist set of Supreme Court decisions from the early 1900s.
Read more about what advocates for equal access call a “huge blind spot” in Washington’s drug pricing debate in my recent story. | What we're reading - Health care industry swarms Washington as surprise billing rules get ironed out, STAT
- Tim Kaine has long Covid. That’s not moving Congress to act, Politico
- At pioneering center for gene therapy, Jim Wilson presided over toxic, abusive workplace, staffers say, STAT
- The secret history of the U.S. government’s family-separation policy, The Atlantic
- The Senate’s drug pricing bill is an inevitable solution. It will still have plenty of unintended consequences, STAT
| Thanks for reading! More Thursday,  | | | |
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