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ABOUT THE AUTHOR
About The AuthorSarah Karlin-Smith is a health care reporter, specializing in covering the policy and politics that affect the drug industry. Before joining Politico she honed her health care coverage at FDAnews and "The Pink Sheet" where she covered all angles of pharmaceutical policy from clinical trials to patent law and pharma social media regulations on the Hill and at FDA. She can now recognize way too many FDA officials just by hearing their voices.

In 2014, Sarah was selected as an Association of Health Care Journalists-National Library of Medicine fellow. She graduated with special honors in journalism and mass communication from The George Washington University where she also dabbled in American studies, guarded the women's club lacrosse team's goal, and fell in love with Washington.

When she isn't reporting, Sarah can be found trying hard to one day touch her toes in a yoga class, defending her great homeland of New Jersey and whipping up silly balloon hats or dogs as a volunteer clown. She's working to add more balloon animals to her repertoire.
ABOUT THE AUTHOR
Sarah Owermohle is a reporter for POLITICO Pro Health Care.
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Comments roll in on Trump’s drug pricing plan
By SARAH KARLIN-SMITH and SARAH OWERMOHLE 07/16/2018 12:00 PM EDT
GROUPS FLOOD COMMENT BOX ON TRUMP DRUG PRICE PLAN — The comment period closes today on the plan that President Donald Trump announced two months ago as “the most sweeping effort” in history to lower drug prices. And with the clock ticking, some 2,000 comments had been submitted as of Friday.

The "blueprint," which offers a wide range of ideas for lowering drug costs, drew hundreds of stock replies. Many from independent pharmacists charged that pharmacy benefit managers’ low reimbursements for medicines are putting their businesses in danger.

PBMs are urging the government not to touch the rebate system, which they say is essential to brokering lower prices. In a report released this morning, the Pharmaceutical Care Management Association says rebates paid to the middlemen have saved nearly $35 billion for Medicare Part D programs since 2014. But the industry may be in for a fight: HHS Secretary Alex Azar has repeatedly signaled that changing the rebate system — or even getting rid of it — is high on his agenda.

Instead of messing with rebates, Express Scripts is urging the government to let public programs like Medicare follow commercial markets’ lead. Spokesperson Phil Blando told POLITICO the PBM giant will submit comments recommending more value-based pricing agreements, flexibility on formularies’ drug coverage and increased generic approvals.

Value-based pricing may be one part of the blueprint the wider industry can agree on, Matt Eyles, president and CEO of AHIP, said in a roundtable with journalists last week. Industry outsiders like the Pew Charitable Trusts' Allan Coukell are more skeptical that strategies like tying a drug's ultimate cost to its performance will really lower prices.

Industry groups have a range of reasons to be nervous about what the administration will wind up doing. PhRMA has significant concerns about how the possibility of giving Medicare Part B flexibility to negotiate drug prices could affect patient costs and access to medicines, spokesperson Holly Campbell said, giving a preview of some of the comments the lobby is submitting today.

Other groups getting ahead of the last-minute comment onslaught include the Coalition for Affordable Prescription Drugs and the Campaign for Sustainable Rx Pricing.

What’s next: Once the comments are in, the expectation builds for HHS and the White House to do something — even though there is no official deadline. With lots of talk but little action so far, we'll be watching to see if the administration can make good on Trump's promise to lower drug prices and which initiatives rise to the top of the heap. Be on the lookout for proposed rules or other ways the administration could formally implement its plans.

And ICYMI Friday, new details emerged on Novartis‘ relationship with Trump’s personal lawyer Michael Cohen, including how the drug company may have tried to shape the drug pricing agenda. Read more here.

Happy Monday and welcome back to Prescription PULSE, where we’re thinking of taking a summer jaunt to China to see "Dying to Survive." The film chronicles the experiences of a Chinese man who smuggled generic cancer medications into the country from India to help patients who couldn’t afford drugs. Send your summer movie recommendations and pharma news tips to the new Prescription PULSE partnership: Sarah Karlin-Smith at skarlin-smith@politico.com and @sarahkarlin and Sarah Owermohle at sowermohle@politico.com and @owermohle.

FDA, CMS AND OPIOIDS AT THE POLITICO PRO SUMMIT — Join Prescription PULSE co-author Sarah Karlin-Smith for a conversation with FDA Commissioner Scott Gottlieb at the POLITICO Pro Summit Tuesday morning. And stick around for a panel on the opioid epidemic and an interview with CMS Administrator Seema Verma. Click here for more information, including how to watch online.

CBO: CMS’ LATEST DRUG COST MOVE WOULD YIELD MEAGER SAVINGS — A new CMS proposal to reimburse doctors 3 percent less for physician administered drugs during their first few months on the market is being touted as part of the administration’s efforts to lower drug costs. But the proposal doesn’t directly touch what drug companies charge for their products. And while it would save the government and some patients money on co-pays, the savings are meager, considering Medicare’s total drug bill — $174 billion in 2016. The idea is projected to save taxpayers $152 million over 10 years, according to a CBO score of the idea. CMS did not provide its own estimate, saying it can’t meaningfully speculate because it’s unclear what new drugs will be brought to market or how much they will cost. Pros can read more about the proposal here.

… While another proposed rule could increase government spending on drugs: CMS proposed last week to increase payment for new renal dialysis drugs for the first two years they are on the market, by allowing all new medicines in the category to be paid for outside the dialysis bundle early on. Few new medicines now qualify for special payment outside the bundle. The change would likely increase Medicare dialysis spending — and raise patient co-pays — but CMS doesn’t estimate the extra cost, Rick Weissenstein of Cowen Washington Research group wrote in a note. To help offset some additional spending, CMS would reimburse for these new drugs at the average sales price, rather than the current average sales price plus 6 percent.

WHAT TRUMP'S SCOTUS PICK COULD MEAN FOR FDA — Brett Kavanaugh, Trump’s nominee to replace Anthony Kennedy on the Supreme Court, could have a hand in shaping FDA and drug law if confirmed by the Senate. One area to watch will be decisions on free speech, particularly as it affects corporations.

"A lot of what FDA does is require people to speak in certain ways," said Howard Sklamberg a partner at Akin Gump and former deputy commissioner at FDA. This includes everything from mandating drug companies to put safety warnings on medicines, to determining whether a food product can be marketed with certain words like “fresh” and how tobacco products are labeled. “A lot of that gets into a balance between a person’s right not to have their speech compelled versus the government’s interest in making sure consumers and patients have information about products,” Sklamberg said. “If there’s a court with a strong commercial speech majority, that could have a big effect on FDA’s regulation of these areas,” he said. “Justice Kennedy was generally a very strong commercial speech advocate, so the question will be whether Kavanaugh has the same positions as Kennedy and it’s a wash, which many people think, or if Kavanaugh is a little bit more on the regulator side as opposed to the commercial side.”

FDA’s regulation of off-label promotion of drugs is likely to end up before the high court “in the not too distant future,” Sklambeg predicted, and court rulings on this topic could dramatically shape FDA’s entire drug approval regime.

Legal experts emphasized that Kavanaugh’s imprint on the agency may be different than on other parts of the federal government, because so many FDA decisions are scientific in nature and require a great degree of expertise.

“We know two things generally from Judge Kavanaugh's statements during confirmation [for the D.C. Circuit Court of Appeals] and from his rulings. First, he is likely to be a notably pro-business judge. Second, he is likely to support a current and growing movement in the federal judiciary to give less deference to agency rulemaking and enforcement,” said Sam Halabi, a law professor at University of Missouri.

But even justices that tend to give less deference to federal agencies still typically defer to defer to FDA when those decisions are scientific, said Chad Landmon, who chairs Axinn's Intellectual Property and Food and Drug Administration practice.

“FDA decisions are more difficult for pro-business, agency-skeptical judges than those from SEC, FTC, and CFPB, which often just involve money,” Halabi explained pointing to a Kavanaugh decision in a D.C. Circuit case pitting FDA against a medical device company. In that case, Cytori Therapetuics Inc. v. FDA, “Judge Kavanaugh noted that ‘A court is ill-equipped to second-guess that kind of agency scientific judgment,’ so when it comes to matters of safety and efficacy of drugs and devices, my guess is that Judge Kavanaugh will be more deferential than for other agency determinations,” Halabi said.

Halabi also said it would be worth keeping an eye on drug law issues that state legislatures have been working on, such as pricing transparency and opioid regulations — “matters that touch and concern federal regulation especially by FDA ... I’d expect a federalism case to hit the Supreme Court soon,” he said.

GENERIC DRUGMAKERS DROP LOW-PROFIT PRODUCTS — Generic drug companies are feeling the heat as more competitors hit the market, leading some of the biggest to pull the plug on low-margin products.

While beleaguered Teva Pharmaceuticals has shut down facilities, sold units and discussed shifting strategies in the face of sliding profits, rival Mylan — headed by Heather Bresch, daughter of Sen. Joe Manchin (D-W.Va.) — has discontinued 54 product lines so far this year compared to just 15 by Teva.

Both companies, along with Novartis’ generics unit Sandoz, have ramped up discontinuations this year compared to last, according to an analysis of FDA notices by Evercore ISI's Umer Raffat.

** A message from the Pharmaceutical Care Management Association (PCMA): A recent Medicare Part D report by debunks the myth that because of the discounts and rebates they negotiate with health plans and PBMs. **

STEM CELL COMPANY LOOKING TO USE RIGHT-TO-TRY — Creative Medical Technologies, a biotech focusing on stem cell treatments, is looking to offer its experimental treatment AmnioStem to cancer patients once Phase I clinical trials are complete. The company “will be well positioned to allow access to end stage cancer patients under the Right-to-Try law,” Chief Scientific Officer Thomas Ichim said in a statement. It’s testing AmnioStem to treat cancer-associated wasting, or cachexia. If the product turns out to be successful, CEO Timothy Warrington said it could buy cancer patients time to wait for new therapies to become available.

The company didn’t respond to requests for more information on how it would implement its program, such as how if it would be able to afford to help all patients who request the treatment or whether and how much it would charge. But it will be interesting to watch how this company — or any biotech — navigates the new law S. 204 (115), which lets patients skirt the FDA when requesting access to experimental medicines.

Those very issues tripped up BrainStorm Cell Therapeutics last month. The company said it had plans to provide its experimental ALS treatment through Right-to-Try, before backtracking. Due to funding concerns, it said it wouldn’t be able to accommodate all patients who would want the treatment. The company's update followed a Bloomberg report that indicated BrainStorm might seek to profit from providing the experimental treatment. The new law, like the FDA's current compassionate use program, limits companies largely to charging patients for direct costs like materials or shipping.