Biden administration is handing out fines for price hikes

In the first major effect of a sweeping new drug pricing law, the Biden administration will fine manufacturers who hiked prices faster than the rate of inflation on 27 medications administered in physicians' offices, the White House said today.

As STAT's Rachel Cohrs reports, Pfizer had the most drugs on the list of any company, with five. That number would increase by one if the company completes its $43 billion acquisition of Seagen, maker of the cancer medicine Pacdev.

The fines mark some of the first major changes to the U.S. drug pricing landscape since Democrats' passed a series of major reforms in the Inflation Reduction Act last August. The law's biggest change, empowering Medicare to negotiate drug prices, will not take effect for several years.

Regulatory

What happens if Amylyx has to keep its promise?

Last year, Amylyx Pharmaceuticals made a dramatic promise: If its treatment for ALS, then up for an accelerated FDA approval, failed in a Phase 3 study, the company would pull it off the market. Now, with the drug outperforming commercial expectations in the early days of its availability, it might be more complicated — if not impossible — to keep that promise if the larger trial turns out not to work.

As STAT's Adam Feuerstein writes, about 1,300 ALS patients were on Amylyx's drug, called Relyvrio, at the end of December, and the company expects that number to at least double by the end of this quarter. Those numbers were better than what most of Wall Street had anticipated. The company is well on the way to meeting its goal of having 10,000 ALS patients in the U.S. on Relyvrio, possibly faster than expected.

That's good news for Amylyx, but it could magnify the company's problems if that Phase 3 study, slated to read out in 2024, turns out to be negative. Amylyx might walk back its promise and argue that Relyvrio should stay on the market until data showing its effects on patients' survival are available in 2025. That would leave the FDA, which said it would revoke Relyvrio's accelerated approval if the Phase 3 trial fails, in a difficult position.

Read more.

Drug prices

Selling insulin is copycat business

For years, the major manufacturers of insulin had the uncanny habit of increasing their prices in lock step with one another. Now they're following a similar pattern as those prices come down.

As STAT's Ed Silverman reports, Novo Nordisk plans to cut U.S. list prices for several insulin products by up to 75%. The move comes two weeks after Eli Lilly announced plans to lower list prices for its most commonly prescribed insulin products by 70%. Starting May 1, Lilly will also cut the list price of an unbranded version of insulin to $25, down from $82 a vial.

That leaves Sanofi as the last major player in the insulin oligopoly that has yet to revisit its list prices. The companies are responding to searing criticism about the cost of insulin, which has turned the life-saving diabetes treatment into a poster child in the national debate about drug prices.

Read more.

R&D

A plan to fix pharma's broken discovery engine

By now everyone is familiar with the numbers: Drug companies are investing more money to invent fewer medicines that generate worse returns, on and on through the years. Three biotech insiders have come up with a model designed to bend that curve toward R&D efficiency.

Writing in STAT, they lay out a four-point plan for drug developers the world over, starting with an increased focus on getting preclinical development right, paying more attention to product convenience, spending more on early-stage safety testing, and prizing effect sizes over minimal thresholds of success.

"Players in the industry — big pharma, small biotech, and venture capital alike — share a moral obligation to fix the R&D productivity problem so it once again becomes affordable to develop new drugs for diseases other than those afflicting the most affluent sector of society," the authors write. "The end of cheap abundant investment capital also means that the market is standing by to discipline those who cannot meet the challenge, and reward those that do."

Read more.

More around STAT