Good Day BIO: Who gets money spent on brand-name drugs?

New data shows that more than half of total spending on brand-name medicines goes to the supply chain and other stakeholders—and brand-name drug prices actually fell last year. We take a closer look, plus review two new studies that show the devastating health impacts of air pollution. (733 words, 3 minutes, 39 seconds)

Who gets the money spent on brand-name drugs?

More than half of total spending on brand-name medicines in 2020 went to “nonmanufacturer stakeholders—including PBMs, health plans, hospitals, the government, pharmacies, and others,” says a new report from Berkeley Research Group (BRG), the latest evidence that drug price controls aren’t the solution for controlling health care costs. 

The numbers: “Brand manufacturers retain just 37% of total spending on all prescription medicines (brand and generic medicines),” and 49.5% on brand medicines, says the study, which was funded by the Pharmaceutical Research and Manufacturers of America (PhRMA). 

So, who got the largest portion of new spending on brand medicines? “Payers—including insurers/plan sponsors, the government, and PBMs,” receiving more than $140 billion, or 35%.

And manufacturers have gotten a lot less over the past decade: “The share of total brand spending retained by manufacturers fell by more than 17 percentage points from 2013 to 2020.”

Similarly, prices of brand-name drugs fell last year,found a recent analysis by Dr. Adam J. Fein of Drug Channels Institute. 

“This decline was no anomaly,”says BIO’s Chief Policy Officer John A. Murphy III. “Last year marked the fourth consecutive year of declines for list prices.” 

Why it matters: “If lawmakers want to make care more affordable and accessible for patients in 2021 then drug price controls are far from the starting point,” concludes John. “These policies will do more harm than good and punish an industry—and the patients it helps—that has been both stable and critical during the fight against COVID-19.” 

Watch and Share: “Follow the Pill” explains drug costs and the prescription drug supply chain—watch here.

More Health Care News:

Bloomberg: Alnylam’s CEO is ready to take over from a biotech legend
“Under [John] Maraganore, Alnylam turned RNA interference—a Nobel Prize-winning technology that silences disease-causing genes—from an idea into four approved drugs. It will be up to [Yvonne] Greenstreet to realize Alnylam’s grander ambitions: developing treatments for more common conditions such as hypertension and diabetes, becoming a top-five biotech and ultimately turning a profit.” 

The New York Times: In a first, man receives a heart from a genetically altered pig
“The breakthrough may lead one day to new supplies of animal organs for transplant into human patients.”

Air pollution led to 1.8 million excess deaths in 2019

Air pollution is causing excess disease and death, according to two recent studies—more evidence of the need to lean into biotech solutions that can reduce carbon emissions. 

The key finding: Air pollution led to an excess of 1.8 million deaths in 2019, with most of the world’s urban population (86%) living in areas with “unhealthy levels” of pollution, says the research from George Washington University. 

And that’s not all: “Nearly 2 million new cases of pediatric asthma every year may be caused by a traffic-related air pollutant”—nitrogen dioxide, which comes primarily “from tailpipe vehicle emissions, power plants and industrial sites,” found another GW study. 

What they’re saying: “Reducing fossil fuel-powered transportation can help children and adults breathe easier and may pay big health dividends, such as fewer cases of pediatric asthma and excess deaths,” said study co-author Susan Anenberg. “At the same time, it would also reduce greenhouse gas emissions, leading to a healthier climate.” 

Hey, we have a solution: low-carbon biofuels. Biofuels from agricultural or municipal waste and dedicated energy crops such as algae, switchgrass, hybrid poplar, and miscanthus have reduced greenhouse gas emissions by as much as 80% versus petroleum. 

Read and watch: World’s first passenger flight with 100% renewable fuel takes off—thanks to biotech 

Other technologies can reduce emissions further—such as biotech crops, which have saved 27.1 billion kg of carbon dioxide, equivalent to taking 16.7 million cars off the road, and adding enzymes to chicken feed to reduce residual nitrogen emissions, to name two examples. 

The best thing we can do right now? Enact policy—like low-carbon fuel standards—to incentivize development of these solutions and help sustainable fuels take off.

President Biden’s Tuesday: Heading to Atlanta, where he’ll participate in a wreath laying at the crypt of Rev. Dr. Martin Luther King, Jr. and Coretta Scott King and visit Historic Ebenezer Baptist Church. He will speak about the urgent need to pass legislation to protect the constitutional right to vote and the integrity of our elections. 

What’s Happening on Capitol Hill: Biden administration health officials will appear before the Senate Health, Education, Labor, and Pensions (HELP) Committee at 10 AM ET to discuss the COVID-19 response and addressing new variants. (We aren’t expecting any surprising news, but we’ll report back.)