What this “market-changing deal” means for patients and cures

January 10, 2020
Thanks for joining us for the GoodDay BIO official launch week! Have feedback or suggestions? Send us a note.Before you start the weekend, we’ve got the details on two interesting new partnerships: one with huge implications for drug manufacturers, pharmacies, and PBMs…

Thanks for joining us for the GoodDay BIO official launch week! Have feedback or suggestions? Send us a note.

Before you start the weekend, we’ve got the details on two interesting new partnerships: one with huge implications for drug manufacturers, pharmacies, and PBMs, and another using pork waste to produce renewable biofuel, in 728 words, or 3 minutes, 39 seconds.

What this “market-changing deal” means for patients and cures

The announcement of a new “collaboration” between two pharmacy benefit managers made headlines in the insurance world—but Dr. Adam J. Fein of Drug Channels Institute says the deal has serious implications for drug manufacturers and pharmacies, too, with the potential to cause major disruption in the industry.

The details: Cigna’s Express Scripts, a pharmacy benefit manager, announced a “collaboration” with Prime Therapeutics, another pharmacy benefit manager, to “deliver more affordable care for clients and their members by enhancing pharmacy networks and pharmaceutical manufacturer value.”

For those in the back: A pharmacy benefit manager, or PBM, is a third-party administrator of prescription drug benefits for a health insurer, responsible for things like contracting with pharmacies, negotiating discounts and rebates with pharmaceutical companies, and processing and paying claims for prescriptions.

What it means: This will essentially be the “biggest PBM ever,” says Dr. Fein—and will help the PBMs retain administrative fees based on the percentage of list prices in response to regulatory and legislative proposals intended to limit them.

How? By sourcing drugs through a “secretive” Switzerland-based purchasing organization (GPO), which wouldn’t be subject to the same regulatory/legislative changes.

Dan’s Deep Dive: All told, patients could pay more for drugs and health insurance premiums and receive less efficacious medical treatments. PBMs’ pursuit of rebates could also spill over into other areas of care, including specialty pharmaceutical products and cancer therapies. Down the road, these powerful conglomerates could effectively control pharmaceutical innovation and direct patients toward high profit margins rather than high-value care. – Dan Durham, BIO’s EVP for Health Policy

Click here for BIO’s detailed analysis of the deal and what it means for the industry, for patients, and for cures.


More Health Care News: 

BioPharma Dive: 5 trends to watch at the FDA in 2020
Expect more approvals for advanced and gene therapies, faster approvals generally, possible action on drug prices, expanded access to experimental therapies, and new leadership.

Wall Street Journal: California looks to launch its own prescription-drug label
“California would become the first state to contract with generic-drug manufacturers to make prescription medicines to sell to residents, under a plan proposed by Gov. Gavin Newsom,” part of the new budget proposal.


Pork power

Go ahead, order the bacon at brunch tomorrow. You might be helping to decrease our reliance on fossil fuels and provide clean energy jobs across the country, as a new partnership will be turning pork processing waste into biofuel, reports Power Engineering

The details: Duke Energy and Smithfield Foods have teamed up to produce renewable natural gas from the wastewater treatment system at Smithfield’s pork processing facility in North Carolina, to help Duke Energy comply with a state law requiring the company to generate .20% of retail sales from swine waste by 2024.

How it works: Using a “gas upgrading and injection system” from bioenergy project developer OptimaBio LLC, Smithfield will collect and clean biogas from the facility, convert the biogas to renewable natural gas, (RNG), then transport the RNG to Duke Energy to be used for electricity for consumers. 

Expect even more pork in your power: It’s just one of many projects being implemented by Smithfield to transform pork plant waste into biofuel; in five other states, they’re converting methane from pork waste into RNG, too.

What they’re saying: “Buying the output from Smithfield’s renewable natural gas project will allow us to expand our diverse generation mix in North Carolina,” said Stephen De May, Duke Energy’s North Carolina president. “This project is creating safe and affordable energy that customers can rely on.” 

Why it matters: As the need to lower carbon emissions and stop the warming of the planet remains one of the biggest global challenges, the biotech industry is a key player in the effort to reduce our reliance on fossil fuels—and this year, BIO will champion the industry's clean energy breakthroughs and policies that drive adoption of sustainable fuels.

BIO Beltway Report
Good Day BIO Beltway News

President Trump’s Friday: Meeting with the Secretary of State then appearing on Fox News later tonight. He's ending the week with his job approval rating down two points from yesterday, says Lunchtime Politics

What’s Happening on Capitol Hill: The House and Senate are in session. House Speaker Nancy Pelosi says she will release the articles of impeachment “soon,” while Senate Majority Leader Mitch McConnell says the Senate trial could begin next week, according to POLITICO. And ICYMI, Bloomberg has more on what to expect in the Senate committees next week on the U.S.-Mexico-Canada Agreement (USMCA).

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