Fight around hospital drug discount program escalates with new lawsuit

The American Hospital Association and several hospital systems have filed a lawsuit against the Trump administration, seeking to halt an upcoming pilot program for a controversial drug discount program.

The conflict centers around the 340B discount program, in which drugmakers offer their medicines at a discount to help hospitals care for low-income and patients.

Right now, drugmakers generally provide discounts at the time of purchase, but the pilot program, which is being introduced after heavy lobbying from the pharma industry, allows drugmakers to collect rebates after a medicine is dispensed. Hospitals argue this rebate system would impose severe financial strain on them.

pharma

U.K. agrees to pay more for drugs to avoid U.S. tariffs

The U.K. said yesterday it reached an agreement with the U.S. to pay more for medicines. In exchange, the country will be spared from pharmaceutical tariffs being considered by the Trump administration.

Under the deal, the U.K.'s National Health Service will increase the net price it pays for new medicines by 25%, and the country will reform the clawback tax that drugmakers have to pay to the government when drug spending increases.

In recent months, pharma companies have been canceling investments in the U.K., complaining that the country doesn't pay enough for drugs and is disincentivizing research.

This agreement is a critical element of President Trump's "most-favored nations" plan to lower U.S. drug prices and to get other rich nations to pay more.

Read more from STAT's Daniel Payne and Drew Joseph.

regulation

FDA gives staff new AI tools to help with reviews

The FDA yesterday said it will offer its employees new AI tools that have "agentic" capabilities to use in pre-market reviews, post-market surveillance, and other tasks.

Agentic AI broadly refers to systems that can complete multistep tasks autonomously.

The FDA's earlier efforts to roll out AI tools, though, was rocky. Last month, it launched an internal large language model-based product that the commissioner said could be used to speed up reviews, but early users described errors and fabrications.

The FDA said that with the new tools, it is employing "guidelines — including human oversight — to ensure reliable outcomes."

biotech

A drug that was 'engineered with AI' enters Phase 3 testing

Generate:Biomedicines, an AI-focused drug developer, said yesterday that it will start late-stage trials of its investigational drug for severe asthma. The company said this is a milestone since this is one of the first molecules, if not the first, designed with AI to enter Phase 3 testing.

This is a notable development, especially since Generate skipped Phase 2 testing to go straight into Phase 3. But my colleague Brittany Trang reminds me that an "AI-designed drug" is not a hard-and-fast designation and there's a broad spectrum of AI usage that could fall under that term.

Generate's drug, she noted, was not created from scratch with AI. Brittany reported earlier this year that the asthma molecule looks to be a tweaked version of an existing, FDA-approved medication.

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