BIO’s Bernard Fallon continued the conversation on drug pricing proposals with three expert speakers:
Craig Garthwaite, PhD, Professor of Strategy, Herman Smith Research Professor in Hospital and Health Services Management, Director of Healthcare at Kellogg at Northwestern
John A. Murphy III, Vice President and Deputy General Counsel at BIO
Ipsita Smolinski, MBA, Managing Director of Capitol Street and Faculty, Healthcare Finance at Johns Hopkins University Carey Business School
The speakers discussed the Most Favored Nation drug reimbursement proposal, which Garthwaite said was a “poorly written” rule that “doesn’t take into account the way the drugs come into market.”
Learn more about the Most Favored Nation proposal and how we got there.
Does the proposal disappear with the Biden administration?
It doesn’t, says BIO’s Murphy—but there was a “ton of litigation” as a result of the policy, with 3 of 4 judges seeing “so many process fouls” that they said the administration had to go back to the drawing board.
But don’t let down your guard yet. The “concept is not going to go away,” though “this idea of MFN as saddled with the Trump administration moniker may not be the most advantageous avenue to pursue,” Murphy continued.
Something like MFN/IPI is “in the realm of possibility,” said Smolinski—though the Biden administration is likely to want to use more science versus just a pricing mechanism. We might see something happen through Centers for Medicare and Medicaid Services (CMS) in the form of a pilot program or certain classes of drugs. However, because we are talking about reimbursement cuts to hospitals and physicians, we are likely to see significant lobbying activity against it, too.
Garthwaite noted the possibility of legislation like H.R. 3—though this lacks “sophistication about what it means to bring drugs to market”—as well as state-level legislation, as well.
What’s next? The judge in BIO’s lawsuit is expected to release a status report at the end of April—so stay tuned.
If we do end up with a drug pricing proposal, what does this mean for investment?
Revenue has shrunk because of tweeting and Trump administration messaging around drug pricing, said Smolinski.
“Every one of these policies just layers complexity to the system, which adds cost,” said Murphy.