The intricate brokenness of American drug pricing

In the U.S., there are patients who can't get life-saving generic medicines because they're too cheap for manufacturers to want to make them. And there are patients who go without life-saving branded drugs because they're too expensive to obtain.

As STAT's Matthew Herper writes, that polar situation results from decades of policy tweaks that, while well-intentioned, have twisted market incentives to create a system most everyone agrees is broken.

That includes 1984's Hatch-Waxman Act, which created the commoditized market for generics, and stretches into last year's Inflation Reduction Act, which drug companies say incentivizes them to slow-walk the development of certain medicines, despite the needs of patients.

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M&A

Chris Viehbacher isn't wasting time

For years, Biogen existed in a sort of dealmaking stasis, as a fractured board kept the company from following through on any of the high-dollar acquisitions Wall Street desperately urged. Then, in June, four members of that board said they'd step down, and CEO Chris Viehbacher immediately set in motion what would become the biggest transaction in Biogen's history.

According to Reata's recap of the negotiations, Viehbacher first called the company on June 24, less than two weeks after Biogen announced the changes to its board. Reata had already been speaking with an unnamed pharmaceutical company, and Viehbacher's interest led to a bidding war, escalating from $140 a share to Biogen's $172.50 offer, which Reata accepted on July 28.

The speed and size of the acquisition suggests Viehbacher has the will to spend Biogen's enviable cash in hopes of reversing the unenviable decline of its business. But perhaps more importantly, it suggests the company's board, as currently constructed, isn't going to stand in his way.

Chart of the day

The biotech riding a Wegovy roller coaster

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Structure Therapeutics, a small company developing a pill to rival the weight-loss treatment Wegovy, hasn't had much in the way of news in the past four months. And yet Structure has gained and lost more than $1 billion in market value as data from Novo Nordisk and Eli Lilly have roiled expectations for the next generation of obesity treatments.

Later this year, Structure's stock price will get a chance to move on the company's own accord. Its lead drug, GSBR-1290, will have data by the end of the year from a mid-stage study enrolling patients with type 2 diabetes and patients diagnosed with obesity.

It's a short study, involving fewer than 100 patients, and analysts don't expect Structure's drug to meet the high bar set by novel injectable medicines. But encouraging results could have a marked effect on Structure's stock price, Leerink analyst David Risinger wrote in a note to clients yesterday. That's in part because the company's current valuation sits below $1 billion, but it's also worth noting that GSBR-1290 is a simple-to-manufacture small molecule, meaning that if it works, Structure likely wouldn't face the hurdles that have made Wegovy difficult to get.

Research

How NIH could make medicine cheaper

The NIH has little authority over the price of new medicines, regardless of whether they've benefited from government research. But the agency does have the money and power to conduct clinical trials that could significantly reduce how much taxpayers spend on pricey drugs.

As University of Chicago oncologist Mark Ratain writes for STAT, NIH could conduct potentially practice-changing studies, testing, for instance, whether medicines are effective at lower doses or whether they're actually better than low-cost alternatives. The results wouldn't make those drugs cheaper, but they could reduce the overall cost to society, thereby achieving the same goal.

It has happened before. After public outcry over the cost of the first FDA-approved treatment for HIV, NIH funded a series of trials demonstrating that the originally approved dose was excessive, which made lower doses the standard and reduced both costs and side effects.

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