Novartis is elbowing into a multibillion-dollar market

Promising new data from a Novartis cancer treatment promise to roil an already competitive market, pitting three major drugmakers against one another.

As STAT's Matthew Herper reports, Novartis' breast cancer drug Kisqali met its goals of preventing recurrence for patients whose tumors had been surgically removed. That's something Pfizer's similar Ibrance, a $5 billion drug, failed to do, and the study results suggest Novartis' drug might benefit more than twice as many patients as Eli Lilly's competing medicine.

Kisqali's sales could rise to about $4.1 billion a year, according to Jefferies analyst Peter Welford, which would be a boon to Novartis as it works to persuade Wall Street it meet aggressive sales forecasts.

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Policy

Medicare drug price negotiation could end before it starts

The biggest change to U.S. drug pricing in a generation could run aground before it even begins thanks to a congressional effort to ban an oft-debated measure of a medicine's value.

As STAT's Sarah Owermohle reports, House Republicans are advancing a bill that would bar federal health agencies from using a metric called metric known as quality-adjusted life years, or QALYs, used to calculate a treatment's cost-effectiveness based on patient outcomes. What has spooked some Democrats is the bill's demand that the government avoid not only QALY but also "similar measures," a two-word addition that could legally constrain Medicare's efforts to come up with its own valuation metric for future pricing negotiation.

Concerns about the bill's implications have destroyed the bipartisan support it once had and harkened back to a decade-old federal argument over just how the government should assess the comparative effectiveness of medical treatments.

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SVB

Will biotech forgive its favorite banker?

The financial institution formerly known as Silicon Valley Bank has found a new home thanks to a $72 billion deal brokered by federal regulators. What remains to be seen is whether the resulting bank, shorn of its former name and a fair amount of dignity, will remain the partner of choice for scores of biotech startups.

First Citizens Bank, a North Carolina firm, bought out SVB's loans at a $16.5 billion discount and will take up the bank's $56 billion of outstanding loans, according to statements from the FDIC and First Citizens. The rest of SVB, including its investing arm and brokerage division, are still under federal control and up for sale.

That answers the question of just who will own all the startup debt SVB had on its books, but not whether the bank's collapse will have scared away the many companies that came to rely on it. SVB's decades-long rise was built on doing business with tech and biotech companies whose cash-incinerating balance sheets were too risky for bulge-bracket bankers. That was great right up until it wasn't, and the unpleasant end of SVB might persuade startups to look elsewhere — and First Citizens to think twice about offering such favorable terms to potentially volatile companies.

R&D

Hear Bernie out on this one

More than 90 minutes into last week's patience-testing Senate hearing on the price of Moderna's Covid-19 vaccine, someone said something interesting: What if instead of purchasing medicines after they had been developed at high prices, the government instead paid for companies' research, enough to ensure they make a reasonable profit?

As STAT's Matthew Herper writes, the idea, put forth by Sen. Bernie Sanders, might seem easily dismissible, not least because the odds of the government seizing the means of pharmaceutical production are more than a little long. But some version of government-run drug development could have sweeping benefits for patients, taxpayers, and even the industry itself.

The government could fund more studies to find new uses for generic medicines, an area with no profit motive to attract pharma companies. It could also bankroll the development of so-called me-too treatments that could be launched at lower prices in order to reduce future drug costs.

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