National

The Food and Drug Administration on Tuesday approved a gene therapy for hemophilia — the latest in a series of decisions to advance pricey, personalized treatments that bring new hope to patients, along with cost concerns to the health system.

Why it matters: With a list price of $3.5 million, Hemgenix from CSL Behring LLC will become the most expensive therapy in the world.

As Axios' Caitlin Owens reported in September, while the expected number of patients who'll receive such treatments is relatively low, employers, insurers, and public payers like state Medicaid programs may absorb large costs all at once. 

The Institute for Clinical and Economic Review this month suggested the highest price that should be charged for the treatment is about $2.9 million.

Details: Hemgenix is used to treat Hemophilia B, an inherited disorder affecting about one in 40,000 people that stems from missing or insufficient levels of a protein that's required to produce clots to stop bleeding.

The treatment is given as a single dose by IV and contains a viral vector carrying a gene for the clotting factor.

Its effectiveness was established based on decreases in the annualized bleeding rate of subjects in two studies.

“Gene therapy for hemophilia has been on the horizon for more than two decades," said Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, adding Tuesday's decision "represents important progress in the development of innovative therapies for those experiencing a high burden of disease associated with this form of hemophilia.”

Catch up quick: The FDA recently approved two other multi-million-dollar gene therapies: Bluebird bio's Zynteglo for a blood disorder called beta-thalassemia and Skysona for a rare neurological disorder called cerebral adrenoleukodystrophy.

FDA approves gene therapy for hemophilia

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Drug prices

Health care costs

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

More than a year after one of the most controversial drug approvals in FDA history, seniors and their loved ones may be on the cusp of having a new drug on the market that slows the progression of Alzheimer's disease.

Why it matters: Seniors desperate for relief from the debilitating disease were the real losers in the debacle over Biogen's Alzheimer's drug — which was approved through a fast-tracked process over the objection of prominent scientists.

Now, many — including scientists — are placing more faith in a drug from Eisai and Biogen, though experts warn it's important to keep pursuing a broad array of treatment approaches.

Driving the news: Of the billions of dollars spent on Alzheimer's treatment research, the largest focus has been on targeting brain amyloid plaques under the theory that they're major contributors to the disease.

That research got a boost in September when Eisai and Biogen announced positive clinical trial results for lecanemab, an anti-amyloid drug.

Yes, but: Skepticism over anti-amyloid therapies still lingers after last year's approval of Biogen's drug Aduhelm, which also targets amyloid plaques but was highly criticized as having poorly executed clinical trials.

Medicare subsequently opted to severely limit coverage of the treatment, despite the drug's FDA approval. 

Plus, Roche-owned company Genentech announced on Monday disappointing results from the trials of gantenerumab — another anti-amyloid drug  — which the company said did not slow cognitive decline enough to be statistically significant. 

What they're saying: The Roche data doesn't disprove the amyloid theory, said Jason Karlawish, a medical professor at the University of Pennsylvania. This particular drug may have just been ineffective at clearing amyloid.

But he added that, at best, this class of drugs appears to potentially slow cognitive decline, not cure Alzheimer's.

"Overall what we're seeing are effects that are somewhat small as opposed to halting the disease," he said. "Simply clearing amyloid doesn't seem to halt the disease, but it may have an effect on slowing the rate of progression."

What we're watching: Despite the disappointment over Aduhelm and, now,  gantenerumab, many are still hopeful when it comes to Eisai and Biogen's lecanemab.

If that drug's data matches the results described via press release this fall, the question will then become how quickly the FDA moves to approve it.

Eisai has said that the drug could cost between $9,249 and $35,605 a year, which would inevitably lead to huge policy discussions about how to pay for it.

A promising Eli Lilly drug that also targets amyloid is also in the near-term pipeline.

The bottom line: It's been a roller coaster journey in the search for an effective Alzheimer's treatment for the estimated 6.5 million Americans 65 and older living with the disease. 

Ultimately, Karlawish said that "anti-amyloid monoclonal antibodies very well may be the class of the first drugs that affect the natural trajectory of Alzheimer's disease."

But "we should view them as a start," he said, and continue seeking drugs that take different approaches to the disease — and ones that could potentially be curative.

A roller coaster journey in search for Alzheimer's treatments

Recent data suggests an effective drug may be around the corner after a tumultuous year.

Photo illustration of a photograph of an elderly couple overlaid with an MRI scan of a brain.

Photo illustration: Aïda Amer/Axios. Photo: Smith Collection/Gado/Getty Images

Deep Dive - Elder Care

Health Care Policy

Health Care Policy Thought Bubble

An effort to lower the cost of insulin for privately insured patients faces long odds in the lame duck session, Axios' Peter Sullivan reports. 

Why it matters: More than 1 million Americans have to ration insulin because of the cost, according to an October study in the Annals of Internal Medicine. 

Between the lines: Sens. Jeanne Shaheen (D-N.H.) and Susan Collins (R-Maine) have introduced a bipartisan measure to lower insulin costs, but finding nine other Republicans to get to 60 votes has proven difficult. 

There isn't a lot of time on the Senate floor before the end of the year, and congressional scorekeepers concluded the measure would cost about $23 billion over 10 years, adding hurdles. 

"It will be a big lift because it’s an expensive policy and Republicans will have to bring 10 votes, which they weren’t able to do earlier this year," a Senate Democratic aide said. 

Another path would be getting the bill into the year-end government funding package, something that Senate GOP Leader Mitch McConnell isn't likely to agree to. 

Sen. Raphael Warnock has also made capping insulin costs a key issue, adding a political hurdle to getting Republican support, at least before the Dec. 6 runoff election in Georgia. 

How it works: Democrats' Inflation Reduction Act will cap monthly out-of-pocket insulin costs to $35 for Medicare beneficiaries starting next year.

The Shaheen-Collins bill would go further by placing a similar cap on the private market, along with voluntary incentives for drug companies to lower the list price of insulin.

Many Republicans view the policy as interfering in the private market. Only 12 House Republicans voted for a $35 cap earlier this year.  

Some advocates have called for the bill to do more to lower the overall price of insulin, not just cap patient out-of-pocket costs.

"For any meaningful possible health care agenda, you want to get it done now," said Leslie Dach, chair of the Democratic-aligned advocacy group Protect Our Care.  

Yes, but: Senate Finance Committee Chairman Ron Wyden said he is going to go "all in" to push for action on insulin. And Democrats, after keeping their Senate majority, could also seek to pressure the GOP House next year.

This story was published first on Axios Pro. Get breaking news like this by subscribing. Use code POLICYLAUNCH to get $200 off. 

Time running out on insulin cost caps

Illustration of a syringe in a bottle of insulin with a clock face cap

Sens. Bernie Sanders and Rand Paul’s shared interest in expanding drug importation could emerge as a populist sequel to Democrats’ drug pricing bill next year — and rekindle friction between the hill, pharma and the Food and Drug Administration.

The big picture: The lawmakers are in line to be chair and ranking member of the Senate health committee in a session likely to be consumed with investigations and messaging bills.

A coordinated effort between the socialist and libertarian on importing prescription drugs could tap into broader inflationary and economic concerns, even though experts still view the policy as having limited impact.

Why it matters: The real risk to the drug industry isn't really from importation, an idea that's been discussed for nearly two decades. It's Sanders and Paul teaming up on the bully pulpit to question industry practices or the appearance of coziness with regulators.

Flashback: The duo in June unsuccessfully tried to expand importation during debate on a must-pass bill reauthorizing FDA user fees. "This will be a disruptor. The market needs some disruption," Paul said. 

The Biden and Trump administrations already embraced limited importation from Canada as a way to bring prices down. States including Colorado and Florida have laws allowing for a state importation program.

But Canadian drug suppliers have said they won't participate, and the Biden administration itself has argued in court filings that the idea may not work, citing possible safety concerns over imported products and the potential for consumers not seeing significant savings.

The other side: The drug industry argues importation is a dangerous policy that could put consumers in harm's way.

"Rather than rehashing old, flawed ideas that expose Americans to unapproved and potentially dangerous medicines, the next Congress should consider policies that support medical innovation and ensure Americans have access to the best and safest treatments available,” said Gabby Migliara, a spokesperson for PhRMA, the big Washington industry trade group.

The intrigue: It's not clear how a Sanders-Paul combination would actually reduce costs, since existing laws already allow some drug importation but have largely not been used for the purpose of lowering prices, said Rachel Sachs, a law professor at Washington University in St. Louis.

There's also skepticism about whether importing drugs from countries with price controls would, in essence, import those price controls.

Yes, but: Sanders and Paul could use importation to press broader concerns about the drug industry and its influence over the FDA, said Cowen analyst Rick Weissenstein.

Both lawmakers relish their roles as renegades and are more adept at moving the political conversation than moving legislation, he said.

Sanders and Paul both voted against confirming FDA Commissioner Robert Califf, with Sanders raising concerns about Califf's drug industry ties. 

"The dynamic between Sanders and Paul is likely to make things harder for FDA and brand [drug] companies" and possibly make confirmations more difficult if leadership at the agency or the Department of Health and Human Services turns over, Weissenstein said.

Get ready for a drug importation revival

Sens. Bernie Sanders and Rand Paul’s shared interest in expanding drug importation could emerge as a populist sequel to Democrats’ drug pricing bill

For the first time in more than a decade, a party without a definable health care agenda is on the cusp of a new congressional majority, all but ensuring that next year's agenda will be driven by real-world events more than campaign promises.

Why it matters: Republicans have been eager to move on from health care for years, but a series of jarring events may draw them back in. The narrower the majority, the worse news that is for the party — and potentially for patients.

State of play: Several House races are still too close to call, but at this point, the most likely outcome is that the GOP ekes out a narrow majority.

Which party has control of the Senate may not be clear for another month if it comes down to who wins the Georgia seat, which is headed for a runoff.

The big picture: The Affordable Care Act — both its passage and Republicans' attempt to scrap it — was a rallying point for both parties until 2018, when the GOP's failed repeal attempt helped cost it control of the House.

Health care remained central to Democrats' agenda over the last four years, culminating under the Biden presidency in enhancements to the ACA and a new law allowing Medicare to negotiate drug prices.

House Republicans' vaguely worded health agenda references price transparency,  telehealth and health savings accounts, hinting that the party's goals are more small-bore than in the past. They're also eyeing steps like eliminating any lingering COVID restrictions.

Reality check: Avoiding health care assumes the issue will largely be background noise to voters. But economic circumstances and policy cliffs will make it hard for a sector accounting for nearly 20% of the economy to just run on autopilot.

Inflation will be increasingly reflected in health care prices, particularly if hospitals successfully pass along rising underlying costs to insurers next year. Those will translate into large premium increases, borne either by patients or employers.

If hospitals and providers can't pass along these rising labor and supply costs, some will experience severe financial challenges and will undoubtedly look to the government for help. 

The lifting of the COVID public health emergency — whenever that happens — will begin a process in which millions of people will get purged from Medicaid rolls and the uninsured rate will spike.

New multi-million dollar drugs are already hitting the market, threatening state Medicaid program and small employers' balance sheets.

The expected recession the U.S. is facing will complicate all of the above, if only because it will make paying for health care even tougher for patients. 

What we're watching: Whether some combination of factors will create enough pain to force Republicans to return to one of their least-favorite subjects.

That would be extremely tough for leadership to maneuver with a narrow majority. Finding consensus on any problem — let alone one as vexing as health care — may be near impossible. 

Democrats, who are increasingly unlikely to keep the House, don't exactly have a unified health care agenda waiting in the wings, either, after picking all of the lowest-hanging fruit this past Congress.

Yes, but: Under a GOP majority of any size, expect plenty of political noise around health care-related investigations and oversight, particularly surrounding the pandemic. 

Republicans will also likely probe Biden administration actions like fixing the Affordable Cart Act's "family glitch" and implementation of Medicare drug negotiations.

The intrigue: Democrats have cast congressional Republicans as intent on making cuts to Medicare and Social Security, but entitlement cuts are far from unifying among Republicans and would be dead on arrival in a majority where every vote counts. 

Go deeper: The second and final pre-launch edition of Health Care Pro will dive into more detail on the GOP health agenda and leadership once we have firmer results. Sign up here. 

Editors note: The headline has been changed to more accurately reflect the story’s characterization of the GOP health agenda.

Republicans poised to take power with limited health care agenda

It'll be the first time in more than a decade that a party takes control of the House without big health ambitions.

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House Republicans

Employers, patients or taxpayers could be on the hook for hundreds of billions of dollars in additional health spending if providers and insurers successfully shift those inflation-driven costs, according to a recent McKinsey analysis.

Why it matters: The health care sector's profits are severely at risk, per the analysis. But key players could yet dodge the bullet coming their way.

By the numbers: The analysis predicts a $370 billion increase in U.S. health expenses by 2027, thanks to rising labor and supply costs.

McKinsey also surveyed health care leaders, who reported an expected drop in margins between 25 and 75%. This "could necessitate drastic responses," per the analysis.

Between the lines: These rising costs will initially be borne by providers. It will likely take years for them to shift costs to commercial insurers or the government through contract negotiations or changes to federal reimbursement.

Insurers will attempt to pass along their increased costs to employers, who will then have to decide whether to pass along the costs to workers.

Yes, but: "Rate increases are unlikely to offer a way out," the authors warn. 

"While they may seem like the easiest path, payers recognize that price increases beyond historical levels are unsustainable; therefore, other actions will be needed. The actual financers of healthcare — employers, government, and consumers — can't afford more than historical levels of increase, if that."

Gaming out the winners and losers of health care inflation

If industry avoids huge drops in profits, that means individuals, employers and taxpayers will pay more.

All signs point to a crushing surge in health care costs for patients and employers next year — and that means health care industry groups are about to brawl over who pays the price.

Why it matters: The surge could build pressure on Congress to stop ignoring the underlying costs that make care increasingly unaffordable for everyday Americans — and make billions for health care companies.

[This special report kicks off a series to introduce our new, Congress-focused Axios Pro: Health Care, coming Nov. 14.]

This year's Democratic legislation allowing Medicare to negotiate drug prices was a rare case of addressing costs amid intense drug industry lobbying against it. Even so, it was a watered down version of the original proposal.

But the drug industry isn't alone in its willingness to fight to maintain the status quo, and that fight frequently pits one industry group against another.

Where it stands: Even insured Americans are struggling to afford their care, the inevitable result of years of cost-shifting by employers and insurers onto patients through higher premiums, deductibles and other out-of-pocket costs.

But employers are now struggling to attract and retain workers, and forcing their employees to shoulder even more costs seems like a less viable option.

Tougher economic times make patients more cost-sensitive, putting families in a bind if they get sick.

Rising medical debt, increased price transparency and questionable debt collection practices have rubbed some of the good-guy sheen off of hospitals and providers.

All of this is coming to a boiling point. The question isn't whether, but when.

Yes, but: Don't underestimate Washington's ability to have a completely underwhelming response to the problem, or one that just kicks the can down the road — or to just not respond at all.

Between the lines: If you look closely, the usual partisan battle lines are changing.

The GOP's criticism of Democrats' drug pricing law is nothing like the party's outcry over the Affordable Care Act, and no one seriously thinks the party will make a real attempt to repeal it. 

One of the most meaningful health reforms passed in recent years was a bipartisan ban on surprise billing, which may provide a more modern template for health care policy fights. 

Surprise medical bills divided lawmakers into two teams, but it wasn't Democrats vs. Republicans; it was those who supported the insurer-backed reform plan vs. the hospital and provider-backed one. This fight continues today — in court.

The bottom line: Someone is going to have to pay for the coming cost surge, whether that's patients, taxpayers, employers or the health care companies profiting off of the system. Each industry group is fighting like hell to make sure it isn't them.

Sign up for Axios Pro Health Care Policy for a special pre-launch edition about which cost battles to watch.

The next health care wars are about costs

If they do, the political fallout will be defined by industry group brawling.

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Health care prices

Hospitals test the goodwill of Congress on Medicare cuts

But experts say hospitals' financial situations vary significantly.

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Hospitals

Axios Vitals

If you want to understand why lowering retail drug prices can be so difficult, look no further than billionaire investor Mark Cuban's online pharmacy.

What's happening: Cost Plus Drugs launched in January in a bid to offer transparent, lower drug prices. Cost Plus' direct-to-consumer model marks up drugs from cost by 15%, plus a $3 pharmacy fee, cutting wholesalers, PBMs, pharmacies and insurers out of the equation.

It's already gained 1.2 million customers and sells more than 1,000 generic drugs, Cuban said.

What he's saying: "I put my name on it because what we're really selling is not medication, what we're selling is trust," Cuban said at the Axios BFD event in New York City on Wednesday.

This can save real money, Cuban said. For example, his NBA basketball team, the Dallas Mavericks, paid $165,000 in employee drug costs for generics that cost $30 or more over the course of three years. 

Had they used Cost Plus Drugs for those same drugs, they would’ve paid $19,000, Cuban said. 

The big picture: The question is whether it can fundamentally change the pricing model.

State of play: Congress and the Biden administration recently have taken their own cut at the drug pricing puzzle, targeting what manufacturers charge Medicare via the Inflation Reduction Act and possible follow-on actions. 

The nonprofit Civica Rx also is trying to reshape the economics of drug development, making generics and partnering with certain pharmacy benefit managers (PBMs) and insurers.

And a growing number of online pharmacy platforms are "opting out" of working with middlemen, seeking to find ways to cut generic prices by essentially running cash-only businesses, NBC News reported.

Yes, but: So far, these efforts haven't extended to brand-name drugs, which accounted for about 84% of U.S. pharmaceutical spending in 2021.

Cuban said breaking into branded drugs is "complicated," but noted he'd been able to secure a purchasing agreement with Roche.

The problem, he said, is a handful of PBMs that dominate the industry. PBMs are go-betweens linking drug manufacturers and insurers, negotiating rebates with drugmakers and securing the details of their plan coverage.

Drug makers have been reluctant to sell to other players including Cost Plus, lest they be cast out of those PBM's enormous networks, Cuban has said. 

Cuban recently struck a deal with the PBM Rightway, and is planning to open a drug manufacturing facility in Dallas by next month. 

What to watch: Whether Cuban or other challengers will be able to break into the branded-drug market in a meaningful way to challenge the incumbents.

Dallas

Dallas Members

Dallas Alerts

A daily look at the most significant and interesting stories affecting Dallas. Written by Michael Mooney and Tasha Tsiperas.

Axios Dallas Thought Bubble

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Mark Cuban's bid to disrupt the drug supply chain

Mark Cuban and Axios' Hope King at the Axios BFD event in New York Wednesday. Photo: Courtesy of Beatrice Moritz

Drug coverage

Average annual health insurance premiums for employer-sponsored coverage

Data: Kaiser Family Foundation; Chart: Erin Davis/Axios Visuals

It cost an average of $22,463 to cover a family through employer-sponsored health insurance in 2022, according to an annual benefits survey from the Kaiser Family Foundation that found premiums remained relatively flat year-to-year while wages and inflation surged. 

Why it matters: Nearly 159 million Americans get health coverage through work, and coverage costs and benefits have become a critical factor in a tight labor market.

While families and individuals paid similar amounts for coverage in 2022 and 2021, premiums have increased by 20% over the past five years, KFF said.

And because many premiums for 2022 were finalized in the fall of 2021, before the effects of inflation were clear, KFF expects a higher increase in average premiums for 2023 than what's been observed in recent years.

A single person paid $7,911 on premiums in a year for their employer health plan in 2022.

Between the lines: Employers are making tough choices in a competitive labor market and in some instances, absorbing rising costs of coverage instead of passing them on to workers. 

An October survey of 1,200 small businesses found that nearly half of them have increased the cost of their goods or services to offset rising costs of health care. Four in 10 businesses surveyed stopped offering health insurance altogether.

The cost of care is expected to continue to increase in the coming years, putting added pressure on employers to offer competitive benefits packages.

Employer-sponsored plans have seen increased demand for mental health services, and 44% of companies surveyed with 200 or more employees offered mental health or self-care apps as benefits, accompanying research in Health Affairs says.

Covered workers are picking up a portion of the cost when they visit in-network physicians: Average copayments were $27 for primary care and $44 for specialty care, and there was even more cost-sharing for hospital admissions or outpatient procedures.

A large majority of firms with 50 or more employees cover some telemedicine in their largest health plan. 

Insurance premiums stayed stable in 2022, study finds

A new survey from the Kaiser Family Foundation found that a family with employer-sponsored coverage paid more than $22,000 on premiums during 2022.

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Health care costs

The big picture

Dems on the brink of sweeping Medicare changes

Post-pandemic Affordable Care Act premium hikes on the horizon

Employers pay hospitals billions more than Medicare

The coronavirus pandemic hasn't stopped drug price increases

The coronavirus is slowing health care spending

Watch: As Medicare for All debate rages on, costs keep going up

All Health care costs stories