Breaking News

A new kind of drug pricing dilemma, a CDC personnel scoop, and senators sic IRS on hospitals

August 10, 2023
Reporter, D.C. Diagnosis Writer

Hello and happy Thursday, D.C. Diagnosis readers! It's that time of year when lawmakers are on the road talking about legislation, including this interesting Idaho pharmacy visit where Senate Finance ranking Republican Mike Crapo said he is hoping for a vote on PBM legislation "within weeks, not months." Spot any other notable district appearances on health care? Drop me a note at rachel.cohrs@statnews.com.

drug pricing

Genentech weighs slow-walking cancer drug after drug pricing reform

Alexander_Hardy_3991-Photo credit: Genentech

I've been speaking with pharmaceutical industry executives about their perspectives on how the Inflation Reduction Act's drug pricing reform is playing out in the real world, and my latest installment this morning is a conversation with Genentech CEO Alexander Hardy

He discusses a stark reality the company faces in developing an oral cancer therapy — that even though the drug could be developed faster to treat ovarian cancer, it would be more profitable to delay that testing and wait to put it on the market until it could be tested for prostate cancer, which has a bigger patient population. That slow walking, though, could lead to years of delays for patients with a deadly disease. 

Read the full Q&A here, including four other issues he's pushing regulators and lawmakers to change about the drug pricing law.


public health

A CDC leadership overhaul

The new director of the Centers for Disease Control and Prevention, Mandy Cohen, hasn't been in place for long, but she is already overhauling the leadership of the CDC center that led the agency's Covid-19 response, my colleague Helen Branswell scooped.

Demetre Daskalakis, who has spent the past year in Washington as deputy director of the White House's national mpox response team, is headed back to CDC to become acting director of the National Center for Immunization and Respiratory Diseases, Cohen told staff in an announcement.

José Romero, who headed the center for the past 14 months, will be leaving the CDC at the end of August. Read more, including moves for two other high-ranking officials.


personnel

Drug price negotiation advisers depart

This year, Medicare brought on two advisers to help implement its new drug price negotiation program — but they've already departed their roles, according to HHS' employee directory. 

Rena Conti, a health economist and associate professor at Boston University and Joey Mattingly, an associate professor at the University of Utah, had been listed as advisers to Medicare's new negotiation group, but the listings disappeared. Mattingly said the role was "short-term" and "unpaid" to help the early phases of implementation. 

"I just served as an expert they could call on from time to time. I'm no longer working with the team, but am happy to do so again if they need me," Mattingly told STAT. 

Medicare got $3 billion to implement the program, and has so far employed 16 out of the 95 people that officials estimated they would hire for the negotiation and inflation rebate division. Some employees working on implementation are detailed from other divisions of CMS, including its acting director.


oversight

Senators sic the IRS on not-for-profit hospitals

A bipartisan group of influential senators has asked the IRS to probe whether not-for-profit hospitals are complying with community benefit requirements, my co-author Sarah Owermohle scooped.

The heart of the matter is whether not-for-profit health systems are doing enough to justify their tax-exempt status. Advocates have argued that the IRS' definition of what counts as a community benefit is too broad. 

Sens. Elizabeth Warren (D-Mass.), Raphael Warnock (D-Ga.), Bill Cassidy (R-La.), and Chuck Grassley (R-Iowa) sent the letters. Read more about a harbinger of a policy debate that is heating up on Capitol Hill.



from the courtroom

Pharma sues over Louisiana 340B law

Louisiana is the latest state to pass a law to ensure providers in the 340B drug discount program can distribute medications through contract pharmacies, and PhRMA and AstraZeneca are suing to stop it from taking effect.

The issue of contract pharmacy usage has been a hot issue in courts at the federal level, so hospitals have been targeting states to try to get more legal protections passed — the American Hospital Association said that the Louisiana law was "developed by the AHA." 

The lawsuits claim that Louisiana's law counters federal court rulings limiting the use of contract pharmacies, and that 340B is an exclusively federal program that should be regulated by Congress. 


safety net

State Medicaid programs: You've got mail

CMS officials this week are blasting state Medicaid programs over their handling of the redetermination process in the month after the coronavirus' emergency freeze ended. One state it slammed was Alaska, pointing out that 28% of the state's Medicaid removals in May (or 2,108 people) were for procedural reasons rather than eligibility ones, Sarah reports. CMS wrote to state health officials that it "has concerns" about that figure and its 16-minute call time waits, which lead roughly a quarter of people to drop calls that otherwise could have kept them in the program. Alaska says more than 250,000 people are in Medicaid as of July, down from 264,000 earlier in the year. 

The round of letters, which went to all 50 states, comes weeks after Medicaid Director Daniel Tsai told reporters that they'd paused terminations in "half a dozen" states to review potential errors, but declined to say which ones.


influence

Former generics lobby CEO pivots to brand side

Dan Leonard, who was ousted as CEO of the generics lobby the Association for Accessible Medicines in December, has found a landing spot as the executive director of a PhRMA-related group.

The organization, called We Work for Health, highlights how many jobs pharmaceutical manufacturers support in any given state. It also has very explicit ties to PhRMA — the group SevenTwenty Strategies posted a case study to its website showing off its work for PhRMA creating an "integrated advocacy and communications program" called We Work For Health.


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What we're reading

  • 'Underwhelming': NIH trials fail to test meaningful long Covid treatments — after 2.5 years and $1 billion, MuckRock/STAT
  • Seeking Medicare coverage for weight loss drugs, pharma giant courts Black influencers, KFF Health News
  • Nonprofit naloxone maker celebrates FDA approval by donating 200,000 doses, STAT
  • Unstoppable: This doctor has been investigated at every level of government. How is he still practicing?, ProPublica
  • Opinion: What Mark Cuban gets wrong about prescription drugs, STAT

Thanks for reading! More next week,


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