drug pricing
PBMs are facing a multi-front crackdown
The Federal Trade Commission said yesterday that it settled a lawsuit against Express Scripts, one of the largest pharmacy benefit managers in the U.S., over allegations that the company artificially inflated the price of insulin.
As part of the deal, Express Scripts must make several "fundamental changes." For example, out-of-pocket costs — such as deductibles and coinsurance — will now be based on net drug prices, rather than list prices. Express Scripts will also have to end spread pricing, which refers to paying pharmacies less for prescription drugs than they charge health plans or insurers for the same medicines.
Read more about the settlement from STAT's Ed Silverman.
The PBM industry is also facing scrutiny on other fronts. Last week, the Department of Labor published a proposed rule requiring the middlemen to disclose the different ways they profit from formularies. And earlier this week, Congress passed a bill that includes, among several PBM reforms, certain transparency measures in the commercial and Medicare markets.
Read more on that here.
obesity
Novo and Lilly both see price cuts as helpful for long-term gain
Novo Nordisk and Eli Lilly issued starkly different financial outlooks this week. While Novo is expecting sales and profits to decline this year, Lilly is predicting growth at a rate that blew past expectations — and that caused its shares to spike 10% yesterday.
But what both companies had in common was the belief that price reductions for their highly popular obesity drugs — stemming from direct-to-consumer offerings and deals with the White House made last year — will ultimately increase demand and sales in the long run.
On Lilly's earnings call yesterday, CFO Lucas Montarce said "price is expected to be a drag on growth in the low to mid-teens." But, he added, "we believe these price concessions will be more than offset by increased volume over time."
Similarly, on a call with reporters yesterday, Novo CEO Mike Doustdar said lower prices "will translate into more affordability, and more people being able to pick up our products."
Both companies are particularly focused on selling their drugs at a lower price directly to patients outside of insurance.
For Lilly, the cash offering for Zepbound now makes up one-third of all prescriptions for the drug and nearly half of new Zepbound prescriptions in the fourth quarter of last year, Montarce said.
Novo is seeing strong uptake with the cash offering of its newly approved Wegovy pill. Of the 50,000 new prescriptions in the week ending Jan. 23, 45,000 of the patients were going through a self-pay route, Doustdar said.
Novo is selling the pill at up to $299 a month, undercutting the price that Lilly plans to sell its experimental obesity pill at once approved. Doustdar said the pill wouldn't have attracted so many patients if it was priced higher.
Will these price cuts actually lead to more sales, or will they lead to a price war?
Doustdar was asked whether the improved affordability would ultimately return the company back to growth and whether Novo was in crisis. He simply said "no" and moved to the next reporter.
Andrew Joseph contributed reporting.
regulation
New bill aims to address AI biosecurity concerns
From my colleague Brittany Trang: The growing availability of AI tools has raised concerns that bad actors may use artificial intelligence to engineer dangerous molecules that can bypass current biosecurity screening standards. In that vein, a Science paper published by Microsoft researchers last fall highlighted holes in the screening methods of nucleic acid synthesis providers.
Yesterday, Sens. Tom Cotton (R-Ark.) and Amy Klobuchar (D-Minn.) introduced legislation aimed at these concerns. The bipartisan Biosecurity Modernization and Innovation Act of 2026 would implement screening standards for gene synthesis providers and companies that sell benchtop synthesizers. The bill would require these companies to screen orders for sequences of concern, verify customers' identities, and ensure that materials of concern are not being split over multiple orders.
Prominent scientists David Baker and George Church have also proposed that all synthesized sequences should be logged, whether ordered or made on benchtop sequencers, creating an audit trail should a troublesome pathogen arise.
pharma
It's not a Super Bowl without drug ads
Camille MacMillin/STAT
Even though FDA Commissioner Marty Makary has vowed to crack down on pharmaceutical ads, the drug industry, as well as telehealth firms, are proceeding as usual with a flood of Super Bowl disease-awareness ads.
Novartis, which sells Pluvicto for prostate cancer, has already posted its minute-long ad titled "Relax your tight end." Employing a group of NFL tight ends, the ad explains that patients can opt for blood-based screenings for prostate cancer over a traditional rectal exam.
Meanwhile, Novo Nordisk has been secretive about its ad, so far only releasing social media teasers saying something for the "big game" is coming.
Read more from STAT's Damian Garde. And check out this video conversation between Damian and our colleague Alex Hogan in the newest episode of STATus Report.
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