CMS Drug Price Negotiations

Hannah Wolf  0:03  
Welcome to Healthcare Policy Pop. I'm Hannah Wolf. It's Tuesday, September 26 2023. Today's pop topics, the impact of CMS drug price negotiation on innovation, and patients react to an E&C subcommittee hearing on the same subject. Kirsten Axelsen is a senior policy advisor at DLA Piper, a global law firm. She says the fallout from CMS announcing price controls is already happening. 

Kirsten Axelsen  0:35  
I mean, a number of companies have said that they will halt or change programs. I mean, the way the law is designed, you have kind of an inflection point, right. So if you're going to develop another therapeutic indication for an existing drug, if that pushes you into an area where you think you're more likely to be selected for price controls, we don't know how low CMS will take the prices theoretically, the prices could go down to, you know, zero.

Hannah Wolf  1:00  
Axelsen says she thinks some pieces of the puzzle are not yet in the spotlight.

Speaker 2  1:05  
Another aspect of the price setting that hasn't been discussed as much as the effect this will have on generic, complex, generic and biosimilar competition. You know, there's very good evidence including the government's own evidence in a well designed asked me report that larger markets create more generic competition. So again, price control basically reduces the market size. So are we going to see lost development of generic drugs, complex generics and biosimilars?

Hannah Wolf  1:32  
So one way or another, this is going to change the market.

Kirsten Axelsen  1:36  
I think it will definitely influence the type of drugs that are developed. So then question is from the implications of this policy is, do we want drugs to be developed for the reimbursement? Or do we want drugs to be developed for the therapeutic need? In reality, it's both. But this law adds another level of challenge or question there because the reimbursement will change if a drug reaches a certain tipping point of sales.

Hannah Wolf  2:01  
Another issue we've said before here is patient involvement, or lack thereof in this process. Axelsen says we truly won't know how much patient input was taken into account until we see the final result.

Kirsten Axelsen  2:16  
We won't really know until the prices are set. And it's not just the price. It's the level of transparency and the consistency of the methodology and how patient involvement is incorporated.

Hannah Wolf  2:27  
We will hear more from Axelsen on future innovation and CMS negotiations in a future episode.

Hannah Wolf  2:39  
Last week, the ANC oversight and investigation subcommittee held a hearing on the IRAs price setting and how it's affecting medicine options for patients. Members from both parties expressed a desire to continue working to lower health care costs for patients and to do so in a way that looks at health care as a whole. Congressman Scott Peters from California said this about investment.

Scott Peters  3:05  
I'm talking about these smaller outfits. They will not invest in such a risky enterprise, where 90%, 95% of them fail or it costs a billion dollars to get it to market.

Hannah Wolf  3:16  
Peters went on to say he's proud of the IRA but with a bill as big as the IRA. Some cleanup after the fact was inevitable. Finally today, patients rising now reacted with a statement on the E&C IRA hearing. Executive Director McKay Jemison said in part quote, "yesterday's hearing highlighted a dangerous divide in American health policy that pits academics and government bureaucrats against patients, doctors and innovators." He also says that Congress should focus on radical transparency which could make a true difference in patient lives. That's all for today. We're back on Thursday for another health care policy pop, a resource of patients rising now. I'm Hannah Wolf, have a great day.