Dems’ $100B deal reduced further: Medicare drug price negotiations pushed to 13 years for biologics

House Democrats are on the cusp of passing two major pieces of Biden’s agenda Friday, but Medicare drug price negotiations — once the centerpiece of the Build Back Better Act’s revenue stream — has been relegated to only about $100 billion in savings over the next decade. That number fell lower yesterday. Overall, the compromise ended up winning over both Democrat senators receiving PhRMA cash, like Kyrsten Sinema and Bob Menendez, and more liberal senators, like Elizabeth Warren. But on the House side, the battle continued up until yesterday evening.

PhRMA ally Rep. Scott Peters (D-CA) wrangled another year of exclusivity for biologics before Medicare will be able to negotiate prices, meaning negotiations will now begin after 13 years (instead of 12 in the original text). Peters’ office did not confirm the change, but a source working on the negotiations confirmed that it’s 13 years now for biologics.

While one year may seem slight, the move could subtract billions in savings from the deal. And such a shift would likely be music to the ears of Merck and Bristol Myers Squibb.

Merck’s Keytruda and Bristol Myers Squibb’s Opdivo, both checkpoint inhibitors and two of the biggest blockbuster biologic cancer drugs in the world, would now each get an extra year of negotiation-free sales. Medicare Part B spent more than $4 billion on the drugs combined in 2019, which under the new deal wouldn’t see negotiations from Medicare until 2027, as they were first FDA approved in 2014.

According to the Treasury department, the drug pricing provisions will save about $100 billion over 10 years, although the CBO has yet to score the final text of the bill. By comparison, the CBO scored House Speaker Nancy Pelosi’s drug pricing bill, which passed the House twice but never mustered anything in the Senate, as reducing federal spending by $456 billion over 10 years.

The COVID-19 pandemic has made society very aware of the need to be flexible in the approach to daily life. Every part of ‘normal’ day-to-day life has been disrupted. Clinical trials and the traditional way of conducting them has been no different. Flexibility became an immediate need for sponsors, CROs, clinical sites, and patients. Quick adjustments had to be made, along with finding new ways to make sure that patients had the appropriate care, oversight of the clinical sites continued to be managed, and drug supply and accountability were maintained. Many clinical sites found themselves acting as a shipping department, trying to make sure all of their patients received their drug safely and on time. CRAs performed remote oversight visits, virtual site tours, and virtual accountability audits. Sponsors quickly began to rethink their Direct-to-Patient (DTP) approach as patients increasingly requested that their study drugs be shipped to their homes.

For the past 20 years, Novartis and Roche were more than cross-town rivals reigning over towering pharmaceutical dynasties. Novartis also holds a sizable chunk of Roche’s shares — amounting to a nearly one-third voting stake.

Now, Roche is buying that stake back for $20.7 billion.

‘After more than 20 years as a shareholder of Roche, we concluded that now is the right time to monetize our investment,’ Novartis CEO Vas Narasimhan said in a statement, adding that the cash will go toward purposes in line with current capital allocation.