remicade and like drugs are me hanisticaly incorrect and wrong and expensive and dangerous
short sellers such as bass are quiet in the face of a golden opportunity
think before you act? guns do not kill people, prople kill prople.
it is all a matter of style and target selection or perhaps recharacterization as self defense?
texas loves twin peaks
Trump Policy Change Is a Win for Drugmakers
Intense industry lobbying led to change in Medicare-payment policy for biologic drugs
Biologic drugs are proteins made in living cells, which are sometimes administered via infusion or injection at a doctor’s office or hospital. PHOTO: CHRISTOPHER DILTS/BLOOMBERG NEWS
The Trump administration has issued a policy change that could drive up prices of certain biologic drugs, implementing a new industry-backed measure that overturns existing regulation that promoted lower prices.
The move came after months of intense lobbying last year by pharmaceutical companies to overturn an Obama administration policy, introduced in 2015, that rewarded doctors with larger profits if they used the lowest-priced biosimilars, which are generic-like copies of brand-name biologic drugs. The rationale was that steering doctors to lower-priced products would compel drugmakers to cut prices to capture market share.
Drugmakers argued the old rule would discourage investment in biosimilars.
The Trump administration’s new policy is an industry-backed approach that drugmakers say will help them earn sufficient profit on their investments in biosimilars. In turn, drugmakers say, the policy will attract more competitors to the market and reduce drug costs over the long term. It is an argument industry lobbyists made repeatedly last year in dozens of meetings with members of Congress and federal and White House officials, according to a Wall Street Journal analysis of federal lobbying disclosure records.
Coherus BioSciences Inc., a biosimilar developer that lobbied for the change, has called the new policy a significant victory.
“We view that as very, very positive for our company and our industry because it essentially means that we’re in command of our own pricing strategy,” said Michael A. Fleming, Coherus executive vice president for sales and marketing, on a recent conference call with analysts.
The new payment policy will affect biosimilars paid for under Medicare Part B, which covers outpatient doctor and hospital services for the elderly and disabled. Brand-name biological drugs are among the industry’s most expensive medicines, representing two-thirds of $21 billion in drug spending under Medicare Part B in 2014, according to the Government Accountability Office.
Costly Therapy
Just 10 drugs make up nearly half of total Medicare Part B drug spending.
Note: Only includes drugs paid based on average sales price.
Source: U.S. Government Accountability Office
Opponents of the change included the Medicare Payment Advisory Commission, an independent agency that advises Congress; AARP, the large advocacy group for older adults; and America’s Health Insurance Plans, the health insurer trade group.
“Such a policy would decrease price competition between the biosimilars and result in higher spending for beneficiaries and taxpayers,” MedPac wrote in a September 2017 letter to federal officials.
The change is one example of how the Trump administration’s efforts to make regulations more business-friendly have benefited drugmakers. The administration made cuts to a government program requiring pharmaceutical companies to provide steep discounts to certain hospitals, and proposed limits on Medicare beneficiaries’ annual out-of-pocket costs for drugs, which would make it easier for patients to afford expensive medicines.
“The Trump administration may be talking against [high] drug pricing, but every action they’ve taken so far has been highly supportive of the industry,” said Ronny Gal, a Sanford C. Bernstein & Co. analyst.
A senior official with the White House Office of Management and Budget disputed the idea that the administration seeks to accommodate drugmakers. The OMB official said the administration is grappling with how to lower costs while also promoting innovation.
“The president wants to lower drug prices, but he is sympathetic to the fact we want a robust drug industry that can develop new medicines for the American people,” the official said. The new biosimilar policy is a market-friendly approach that will bring savings, the official said.
Unlike traditional pills made from chemicals, biologic drugs are proteins made in living cells, which are sometimes administered via infusion or injection at a doctor’s office or hospital. Physician practices and hospitals typically purchase these pharmaceuticals upfront and bill Medicare or other insurers.
Biosimilars, which are just starting to come on the U.S. market, are cheaper than their brand-name counterparts. So far, only two products are directly affected by the new policy: Inflectra from Pfizer Inc. and Renflexis from Merck & Co. and Samsung Bioepis. Both drugs are biosimilar versions of Johnson & Johnson ’sRemicade, an anti-inflammatory drug with $4.5 billion in U.S. sales last year.
Under the previous policy, Medicare reimbursed doctors based on the average U.S. sales price of all biosimilars corresponding to a particular brand-name drug, grouped under a single billing code. If doctors used a biosimilar priced lower than the average, they got to keep the difference as profit.
Drugmakers opposed the policy, arguing it would drive biosimilar prices so low that companies would flee the biosimilar market. The industry wanted each drug reimbursed under its own code, at the price negotiated by its maker.
After Mr. Trump’s election last fall, the industry began an intense lobbying effort to have the Department of Health and Human Services change the payment rule, according to federal lobbying reports and congressional aides. The Journal’s analysis of those reports shows 16 drugmakers, industry trade groups and nonprofits lobbied Congress or federal agencies about biosimilar reimbursement in 2017.
In April 2017, lobbyists from Amgen Inc., Pfizer and other companies met with officials from HHS and OMB to discuss the policy, according to OMB filings. At the meeting, drugmakers distributed an 18-page handout stating that biosimilar makers “may leave the marketplace entirely” if the payment rule wasn’t changed, according to the filing.
The document included an economic analysis commissioned by the Biosimilars Forum, a nonprofit funded by drugmakers, saying biosimilar prices would be lower under the old policy, but would create a “‘race to the bottom’ on pricing.”
Having Medicare reimburse companies based on their individual pricing would encourage more companies to enter the market and lead to greater savings than under the Obama policy, the industry-funded analysis said.
Mark E. Miller, who was executive director of MedPac from 2002 until late 2017, says drugmakers presented him with similar projections during previous fights over the payment rule. Mr. Miller deemed the analyses “very speculative.”
On Nov. 2, HHS made its decision, saying in its public notice that its new policy would “allow for market forces to provide a robust and comprehensive selection of choices for patients at a fair price.” The first new billing codes were issued this month.
—Tom McGinty contributed to this article.
Write to Joseph Walker at joseph.walker@wsj.com
