Jun 12, 2019

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning! Today's word count is 792 words, ~3 minutes.

1 big thing: Congress lukewarm on helping biosimilars

Illustration: Aïda Amer/Axios

Congress isn't feeling much urgency to help the fledgling market for biosimilars.

Why it matters: Advocates say they need lawmakers' help soon, or else drugmakers will see biosimilars as a lost cause and the system will lose its only check on the cost of biologics.

Where it stands: Congress' ideas to enhance competition among traditional generics wouldn't do much for biosimilars — less than a dozen of which are on the market.

  • "Different things need to be done for biosimilars because it's a new industry," said Juliana Reed, president of the Biosimilars Forum.
  • Lawmakers "don’t seem to appreciate" how many of the drugs have been stymied by intellectual property challenges or backwards commercial incentives, said Chip Davis, president and CEO of the Association for Accessible Medicines.

What they're saying: Both groups want Congress to alter Medicare's financial incentives to help bolster biosimilars. Davis' group also wants it to speed up patent lawsuits.

The other side: "It's unclear that anything actually needs to be done on biosimilars as the law is still in its nascent stages," said a senior GOP aide working on drug prices.

Where it stands: The Senate health committee recently proposed accelerating the biosimilar approval process. Sens. John Barrasso and Sherrod Brown also said they'll have bills coming soon.

Yes, but: "I guess the answer ought to be yes. But I don’t know all of the issues yet," Finance Committee Chairman Chuck Grassley said when asked about increasing biosimilar competition.

Go deeper: How cheaper drugs are kept off the market

2. Who pays for proposed Medicare reform

On a related note, Grassley said last week that he is interested in restructuring Medicare's prescription drug benefit, including putting drug manufacturers on the hook for some of the costs accrued in the "catastrophic phase" of coverage.

A new analysis by the American Action Forum shows the winners and losers: Cheaper drugs would win, and more expensive drugs would end up paying more than they do now.

  • That's kind of the point of the proposal. As drug prices continue to go up, the cost of even one prescription can send a senior straight into the catastrophic phase, where the government picks up 80% of the tab.
  • Experts say that creates bad incentives, and that putting both drugmakers and insurers on the hook for more of these costs will help contain prices.

Details: The maximum rebate for any given drug in 2020 is about $3,700.

  • Reforming these rebates to be a percentage of the drug's cost in the catastrophic phase would mean that there's no limit on how much a drug company would pay.
  • The higher the percentage, the more pharma would have to pay — and the more losers there would be compared to current policy.

My thought bubble: Pharma is going to hate this, especially if it puts the industry as a whole on the hook for greater discounts.

3. Get ready for reg drops

White House officials are finalizing a handful of health care regulations, which means the rules will be released in short order, Axios' Bob Herman reports.

The bottom line: These rules represent some of the biggest changes to the health care industry under the Trump administration. 

What we're watching:

  • Drug rebate rule. Arguably the most important, this regulation would require drug pricing rebates between drugmakers and middlemen in Medicare and Medicaid to go toward patients’ costs at the pharmacy counter. Health insurers and pharmacy benefit managers would be protected from losses for 2 years, and premiums for many drug plans would go up by a lot.
  • Dialysis payments to third parties. The Obama administration first took aim at stopping dialysis companies from donating money to kidney disease charities as a way to pay for patients' private health insurance premiums, shifting those people off lower-paying government programs. After a judge blocked the rule for skipping the normal regulatory process, this rule likely will shoot for the same goal — and dialysis companies will lobby against it.
  • Potential changes to kickback laws. This is less a rule and more an invitation to hospitals and doctors to rewrite "federal fraud and abuse laws so they can join forces and coordinate care, sharing cost reductions and profits in ways that would not otherwise be allowed," the New York Times wrote last November.
4. Controversial clinics still recruiting patients

Remember how I told you yesterday that the FDA is cracking down on stem cell clinics? Well, some of those same exact clinics' studies still appear on clinicaltrials.gov, Stat News reports.

  • Scientists worry not just about the contradiction, but also about companies' use of the database to market therapies that may not be safe.

What they're saying: "You can concoct this bogus appearance of science, call it a clinical study, recruit people to pay to participate in your study, and not only that: You can actually register on clinicaltrials.gov and have the federal government help you promote what you’re doing," University of Minnesota bioethicist Leigh Turner told Stat.

5. Medical marijuana may not help opioid crisis

States that have legalized medical marijuana have seen more opioid overdose deaths, according to a new study reported on by Vox — the opposite of what a 2014 study found.

  • The previous study suggested that when people could use cannabis to treat pain instead of opioids, it led to less overdoses. It was embraced by some state lawmakers.

The bottom line: The researchers who conducted the study say that there's probably no relationship between state marijuana laws and opioid deaths.

Caitlin Owens