Good morning, and welcome back to Vitals. The repeal train moves to the House, President-elect Trump has scared the daylights out of the drug industry, and his Obamacare replacement strategy isn't looking as quick as it used to.
Thanks for all the great feedback, and please keep it coming. Let us know whether we're covering the right stuff, can we make it any easier for you, what should we do better. And once again, please tell the smartest people you know to sign up here.
It's the House's turn to sort of repeal Obamacare
The House is supposed to take up the budget resolution on Friday, now that it squeaked through the Senate in one of those pointlessly late votes last night. (Rand Paul voted no.) Remember, this just starts the repeal process — it's just instructions to the committees. Then, Republicans still have to unite around an actual repeal-and-replace plan.
For now, it looks likely that the vote will succeed in the House, now that a potential holdout — Rep. Mark Meadows, chairman of the conservative Freedom Caucus — is backing away from an earlier push to delay the vote. He wouldn't say how he'd vote, but as long as there are votes on a repeal plan and a replacement within a week of each other, "I think that we're all on the same sheet of music," Meadows told reporters Wednesday, per Caitlin Owens.
Republicans aren't loving Trump's drug prices plan ...
President-elect Trump rattled the nerves of drug company officials Wednesday when he revived his call for "new bidding procedures for the drug industry" — but that doesn't mean Republicans in Congress are about to go along with him. Caitlin's roundup:
- "That's dangerous because if you stifle the innovation, we could lose all kinds of therapies that are very important." — Senate Finance Committee Chairman Orrin Hatch
- "There's got to be some line that elected officials can't cross when it comes to pushing the private sector." — Sen. Lindsey Graham
- Sen. Johnny Isakson, a bit more open to the idea: "We negotiate in the VA already. The VA already does that. So it's meritorious to be considered."
Why it matters: Most Republicans have never wanted to let Medicare negotiate drug prices — they think it's just another form of price controls. But the drug industry would be in trouble if a lot of Republicans decided they need to get on the same page with Trump. Keep your eye out, but so far, there aren't any big signs that that's happening.
... but do you know who likes it?
There was former presidential candidate Bernie Sanders on the Senate floor, within hours of Trump's press conference, agreeing with the president-elect on the most inflammatory thing he said about drug companies.
But it's not the campaign trail anymore, and all Sanders could do was offer an amendment to the budget resolution (with Sen. Amy Klobuchar) allow the importation of cheaper drugs from Canada. Did Trump's comments get the Republicans on board? Not really. They did get 12 Republicans, but they also lost 13 Democrats — so it failed.
Why the drug industry is rattled
Here's a screenshot of what happened to drug industry stocks by the end of the day, courtesy our financial reporter Christopher Matthews. The plunge took place right after Trump's comments, and pharmaceutical stocks ended up down by more than 2 percent.
And: Nine of the 10 biggest losers in the S&P 500 Wednesday were either drug or biotech companies, including Bristol-Myers Squibb, down 5.3%, and Mylan, down 4.3%.
Diplomacy time: How does PhRMA, the main drug industry trade group, handle a situation like that? By not punching back at Trump. "We look forward to working with the new administration and Congress to advance proactive, practical solutions to improve the marketplace and make it more responsive to the needs of patients," PhRMA president and CEO Stephen Ubl said in a statement.
How not to become a target: AbbVie — the maker of the world's biggest selling drug, the rheumatoid arthritis treatment Humira — is now promising to keep its 2017 price increases below 10 percent, the third global drugmaker to make the promise, per Reuters.
Why investors are getting worried
Check out this tweet from my former STAT colleague Rebecca Robbins, who's covering the J.P. Morgan health care conference in San Francisco.
Didn't Trump want quick Obamacare replacement?
He might have subtly moved away from that position Wednesday when he said he'd propose a replacement after Tom Price is confirmed as Health and Human Services secretary. It's going to be a while before that happens.
- The Senate HELP Committee's confirmation hearing is next week, but the Finance Committee, the only one that actually votes on him, hasn't even scheduled one.
- HELP Committee chairman Lamar Alexander figures Price might be confirmed in mid-February.
- That pushes the repeal-and-replace timeline into sometime in March, according to Roll Call's Niels Lesniewski.
Still, Senate GOP leaders are putting on their best "this is fine" faces. "I think eventually we'll all be able to come together and hopefully have a strategy about how to do it," said Sen. John Thune.
The race for FDA chief: Notes on Gottlieb and O'Neill
Our contributor Steve Brill sends in this hint that Scott Gottlieb, Trump's likely choice for Food and Drug Administration commissioner, might side with the drug industry on letting companies promote medications for off-label use:
Meantime, my colleague Dan Primack, who writes our Pro Rata newsletter every morning, had a smart note yesterday about Jim O'Neill, the venture capitalist who wants the FDA let new drugs go to market as soon as they're safe but not proven effective. He said the key question is how insurers would respond — since some might decide to pay only for cheap alternative treatments — and noted that the idea "could seriously change the math for later-stage life sciences VCs." Sign up for Dan's newsletter here.