As reported at the end of last week, the Governor’s office is working to amend one of the bills in his prescription drug legislative package, S1615, to incorporate elements of the prior legislation that would establish a prescription drug affordability board, S329.

The inclusion of provisions that mandate advance notice of price prior to launch as well as establish a price-setting body would be concerning and detrimental to New Jersey’s life sciences industry. Please contact Ian McLaughlin, VP of Government Affairs at BioNJ, with questions or concerns: IMcLaughlin@BioNJ.org

An article published in formularywatch highlighted that, in 2022, 12 states have enacted 19 pieces of legislation that apply guardrails to the practices of pharmacy benefit managers (PBMs). While the Federal Trade Commission’s study of PBMs is a welcome development, and federal legislation that would implement some guardrails would be prudent, much of the progress towards addressing the true drivers of Patient costs have emerged within State legislatures. PBMs were historically small operations that focused on claims. However, they have ballooned into a dominant component of health care spending in recent years due to significant vertical integration — with the three largest PBMs being owned by large health care insurance companies.

Given the legislation currently being considered by the New Jersey Legislature, drafted with the goal of achieving greater affordability, we will continue to highlight the progress that can be made by adequately addressing the business practices of PBMs.

On February 16, The Senate Commerce Committee held a hearing focused on transparency and accountability of pharmacy benefit managers (PBMs). The discussion explored several aspects and impacts of PBMs, including the use of clawbacks resulting in the closure of independent pharmacies — as well as the fact that the top three PBMs control 80% of the market and are owned by Cigna, UnitedHealth and CVS Health.

Relevant legislation under consideration includes a bill from Senator Maria Cantwell (D-WA), the Chair of the Senate Commerce, Science and Transportation Committee, which would ban clawbacks among other prohibitions associated with PBM business practices.

While much of the recent legislative and regulatory attention to PBMs has been occurring at the state level, we welcome this increased attention by the federal government to the role that PBMs play in contributing to the rising costs that Patients face and look forward to achieving greater affordability by addressing the true drivers of cost.

On February 14, CMS announced that it is going to test a program that would reimburse manufacturers less for medicines that move through the FDA’s accelerated approval pathway. This is a byproduct of a report in response to President Biden’s Executive Order on lowering prescription drug costs — and the stated goal is to incentivize more rapid completion of confirmatory clinical trials.

While we share the fundamental goal of achieving greater affordability and access for Patients, diminishing the accelerated approval pathway is a misguided strategy to do so. The vast majority of treatments that progress through the accelerated approval pathway achieve traditional approval, and they do so at a median of 3.2 years. Medicaid spending data have demonstrated that the benefits of Patient access to therapeutics through accelerated approval outweigh the costs. By penalizing the accelerated approval pathway, CMS is effectively implying that the FDA is failing to adequately scrutinize therapeutic candidates for safety and efficacy through policy — an accusation for which there is no evidence.

We look forward to engaging policymakers to convey the ramifications of this policy and hope the federal government will protect this important and effective pathway for Patients to access safe and effective medications as rapidly as possible.

To see a statement from BIO on this proposal, click here.

Federal Trade Commission Commissioner, Christine Wilson, published an op-ed in the Wall Street Journal that articulates her rational for leaving the FTC. The consolidation of power within the Office of the Chairman and sacrificing decades of bipartisan precedent, redactions of Wilson’s dissents and legal contradictions of FTC decisions were among Wilson’s rationale for leaving the Commission.

In the U.S. Senate, the Senate Health, Education, Labor and Pensions Committee will be holding a hearing with the subtle title of “Taxpayers Paid Billions for It: So Why Would Moderna Consider Quadrupling the Price of the COVID Vaccine?” The hearing will be held at 10:00 AM on March 22, and Moderna CEO Stéphan Bancel will attend. The announcement of this hearing coincided with the announcement that Moderna’s vaccine will remain available at no cost for insured individuals — and the company’s Patient assistance program will provide the vaccines to uninsured individuals at no cost.

To read Commissioner Wilson’s op-ed in the Wall Street Journal, click here.

To watch the Senate HELP Committee Hearing on March 22, click here.

An article published in RealClear Policy emphasizes the ramifications of the differential treatment of small molecule and biologic therapeutics in the IRA. The distinction between the two fundamentally changes the incentives to develop small molecules, which are often more affordable and easier for Patients’ access. The article notes that a recent survey that found that 63% of biopharmaceutical companies expect to shift R&D investment away from small molecule therapeutics. Additionally, over 80% of companies anticipate substantial impacts on cancer, cardiovascular, mental health, neurology and rare disease therapeutic candidates.

BioNJ is the voice of New Jersey’s life sciences sector in Trenton and Washington. BioNJ’s Public Policy Support Series sponsorship opportunities are now available for 2023. Help ensure BioNJ continues to deliver our message of improved Patient access and enhanced innovation through a Public Policy Support Series Sponsorship.  

Click here for more information.