Lilly’s perfect timing for insulin cost cuts

From: POLITICO's Prescription Pulse - Tuesday Mar 07,2023 05:01 pm

Mar 07, 2023

With Carmen Paun

Driving the Day

In this photo illustration, Taylor Jane Stimmler, whose had type 1 diabetes since she was a teenager, displays her insulin and needles used for injection.

Eli Lilly stands to save millions of dollars as a result of its decision to cap the price of its insulin, Humalog. | Spencer Platt/Getty Images

IT’S ALL ABOUT THE REBATES — Eli Lilly’s decision to lower the list price of its most popular insulin product by 70 percent in the final months of 2023 will save the company millions of dollars it would have paid in rebates to state Medicaid programs starting in 2024, health policy experts say.

State Medicaid programs would have generated about $150 in revenue for every vial of Humalog they purchased had Lilly not capped its prices — about $140 million in revenue nationally — based on calculations by Sean Dickson, a drug-pricing expert at the nonprofit West Health Policy Center.

That number is a fraction of Eli Lilly’s $28.5 billion in revenue last year and does not amount to a large proportion of Medicaid funding. But the announcement garnered Lilly positive headlines and the appearance of being a good corporate citizen.

Lilly has worked for “a long time” toward its price-cut announcement and cap on out-of-pocket costs at $35 or less a month, said Antoinette Forbes, Lilly associate vice president of public affairs.

“A variety of factors, including a changing marketplace and legislative environment, contributed to the decision and timing of reducing list prices,” Forbes said in a statement.

The timing of the price cuts suggests Lilly is trying to avoid paying the Medicaid rebates, said Edwin Park, a Medicaid expert and Georgetown University professor.

“If the Medicaid rule change did contribute to this change, I would argue this is a policy success — the purpose of removing the rebate cap was to penalize drug companies for this type of pricing behavior and the change being made will help more patients afford insulin,” said Benjamin Rome, a doctor and health policy researcher at Harvard Medical School.

Democrats taking credit: “You can draw a direct line from the rebate reforms Democrats passed in the American Rescue Plan to Eli Lilly’s announcement capping the cost of insulin for consumers,” House Energy and Commerce ranking member Frank Pallone (D-N.J.) told POLITICO.

IT'S TUESDAY. WELCOME TO PRESCRIPTION PULSE. DC Health said Friday that it would be closing its Covid testing centers in all eight wards at the end of the month, citing a significant drop in cases and the availability of tests and vaccinations.

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Coronavirus

Healthcare workers administer Moderna COVID-19 vaccinations on April 1, 2021 in Toronto, Canada.

Moderna has ended its patent disputes with the NIH, which were related to the drugmaker's monovalent Covid vaccine. | Cole Burston/Getty Images

MODERNA QUIETLY ABANDONS SOME MRNA PATENTS — Moderna has walked away from some patent applications related to its monovalent Covid-19 vaccine that were in dispute with the National Institutes of Health. Any entities that use the specific technology related to the mRNA sequence in those vaccines will not be required to pay Moderna as a result.

“For years, we tried to reach a resolution, but while the NIH asserts its scientists should be listed as co-inventors on the relevant patent applications, we disagree and believe that our scientists invented the specific mRNA sequence at issue,” Christopher Ridley, a spokesperson for the company, said to POLITICO in a statement.

Ridley emphasized that the choice to abandon the patents came from the company’s desire to maintain a positive relationship with the NIH.

What’s next: In January, FDA advisers recommended that monovalent primary Covid-19 vaccines from Pfizer-BioNTech be phased out as primary vaccinations and replaced with updated bivalent shots authorized as boosters. The agency is expected to heed its advisers’ recommendation and is also prepping for annually updated booster shots.

Moderna is still in the midst of patent disputes around its mRNA technology with other companies, including Pfizer and BioNTech.

In Congress

E&C HEALTH SUBCOMMITTEE TO MARK UP FIVE BILLS — The House Energy and Commerce Health Subcommittee will discuss five pieces of health-related legislation Wednesday. On the docket are bills that would require drug manufacturers and other Drug Enforcement Agency registrants to report suspicious orders, make all fentanyl and related substances a Schedule I drug and eliminate a value measurement that the lawmakers say discounts the importance of certain treatments for terminally ill patients.

COVID ORIGIN UNDER THE SPOTLIGHT — The Select Subcommittee on the Coronavirus Pandemic in the House Oversight and Accountability committee will scrutinize Covid-19’s origins in a hearing Wednesday morning after the Department of Energy and FBI Director Christopher Wray recently backed the hypothesis of the virus originating from a lab leak in China.

Two of the three people testifying — former CDC director Robert Redfield and Jamie Metzl, a former National Security Council official during the Clinton administration — back the lab origin hypothesis.

Science writer and editor Nicholas Wade, who has worked for The New York Times, Science and Nature, will also testify.

BERNIE’S NEW COURSE FOR HELP COMMITTEE — Sen. Bernie Sanders (I-Vt.) is changing how some things are done on the Senate HELP Committee and stepping on Republicans’ toes in the process, POLITICO’s Daniel Payne reports.

Ranking member Bill Cassidy (R-La.) said in a hearing Thursday the minority should be more involved in the committee’s work, and his staff added they are being left out of planning for hearings. Sanders is also communicating directly with Republicans on the committee without always including the ranking member, according to aides on both sides of the aisle.

Eye on the FDA

LEQEMBI UNDER REVIEW — Eisai and Biogen said the FDA has accepted their application to approve Leqembi, an anti-amyloid Alzheimer’s drug, under the traditional pathway. The companies said the agency confirmed it would call its neurological drug advisers, but no date is set yet.

Leqembi has been granted accelerated approval. Medicare will cover anti-amyloid drugs with accelerated approval for only those enrolled in an agency-cleared randomized trial — of which there are none. With traditional approval, Medicare would cover Leqembi for those enrolled in a patient registry.

What’s next: The FDA is expected to make a final decision on Leqembi by July 6.

FDA ADVISERS TO DISCUSS FLU VACCINE COMPOSITION — FDA’s Vaccine and Related Biological Products advisory committee will meet today to talk through the influenza strains it recommends including in the 2023–2024 flu vaccine. Advisers will listen to current global influenza data and surveillance in the U.S. before casting their final votes.

Avian influenza: We’re curious if the expert panel will discuss whether vaccine makers consider vaccines against bird flu, although it’s not on the agenda. According to the Centers for Disease Control and Prevention, the H5N1 flu has sickened birds in every state. Two human cases have been reported in Cambodia this year, but none have been reported in the U.S.

Quick Hits

CNN’s Jen Christensen reports that the albuterol shortage in hospitals and beyond is poised to get worse.

For Kaiser Health News, Phil Galewitz reports that more illicit drug shipments to the U.S. are generic Viagra, not opioids.

Pharmaceutical companies are beginning to think of obesity as a chronic, treatable disease, STAT’s Elaine Chen and Matthew Herper report.

Document Drawer

On Monday, the FDA’s Center for Tobacco Products published a webinar on how vape manufacturers should respond to warning letters.

FDA narrowed the umbrella emergency use authorization for disposable, single-use surgical masks intended for use in health care settings.

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