CMS Codifies Medicare Negotiation, Including P4AD-Supported Changes

CMS published the final rule for the Medicare Drug Price Negotiation program, codifying the program and effectively closed a loophole that pharmaceutical manufacturers could exploit to delay negotiation, as we highlighted in our comments. Previous guidance left the door open for manufacturers to launch slightly changed formulations shortly before their drugs become eligible for negotiation — potentially resetting the clock on negotiation eligibility. Now fixed-combination drugs will be grouped together if they’re determined to be new formulations of existing drugs. Additionally, Medicare Part B and Medicare Advantage drug spending will now be included when calculating which drugs qualify for negotiation, giving a more accurate picture of overall spending that doesn’t overlook these costs. This is a critical step for Medicare negotiation, further solidifying the full force of the law as we look towards expansion efforts. — [CMS] 

Healthcare & Drug Affordability Drove Midterm Voters

As the dust settles on the midterms, voters made it crystal clear at the ballot box that the high cost of healthcare is a top priority — and any substantive solution must include lowering brand-name prescription drug prices. NBC exit polling and CNN voter polls both found that 85% of voters are concerned about the cost of healthcare, while CNN also found that 61% believe the government’s role in helping Americans get healthcare should be larger. As attention turns to end-of-year legislative vehicles and next year’s agenda, there’s overwhelming popular, bipartisan support for reforms that lower drug prices, including measures that boost competition and crack down on pharma’s abuse of the patent system. Policymakers have an urgent responsibility to act; patients cannot wait. — [NBC News, CNN, Semafor, STAT News, Axios, POLITICO, Pink Sheet] 

CVS Health Breaks Up, But the PBM Issues Remains

CVS Health announced Wednesday that it will split into two publicly traded companies by the first half of 2028. Its roughly 9,000 retail pharmacies will become the standalone CVS Pharmacy, while Aetna and the Caremark pharmacy benefit manager (PBM) remain together — unwinding the company’s vertical integration strategy that saw CVS acquire Caremark in 2007 and Aetna in 2018. Vertical integration has been enormously lucrative for CVS, as Rep. Ocasio-Cortez pointed out earlier this year, but it’s far from the only concern with PBMs. Commercial market PBMs continue to negotiate hidden “rebate deals” with drugmakers, forcing patients onto more expensive drugs and pocketing the difference. While Congress has taken a strong first step by delinking PBM compensation from list prices in Medicare Part D earlier this year, real accountability must include fiduciary responsibility and delinking beyond Medicare. It also means addressing drugmakers’ pricing power, and ignoring the finger-pointing that PBMs and drugmakers have used for years to dodge reform. Congress must finish their Section 6(b) study for the FTC, and further examine the impacts of PBM consolidation. — [WSJ, New York Times, POLITICO] 

Keytruda Biosimilars Face Difficulties 

Last month saw the first publicly announced application for a Keytruda biosimilar accepted by the FDA, as the drug approaches its 2028 patent expiration. With a list price of $12,517.44 for every three week dose, Keytruda is the world’s bestselling cancer drug. Its manufacturer Merck has been responding to its upcoming patent cliff with three biotech acquisitions this year alone, likely in an attempt to build a pipeline of new, patent-protected cancer drugs. Yet even with a dozen other biosimilar candidates in the works, problems persist for Keytruda patients looking for lower costs. Some indications could be excluded from a biosimilar’s approval, if Keytruda has unexpired orphan-drug exclusivity or other protections. And while biosimilars have saved patients and taxpayers billions, PBMs often favor higher-rebate brand-name drugs instead. Congress has an urgent need to pass bills that prioritize competition before the year ends. — [BioPharma Dive]