BIO Chair: PBMs and IRA harm generics

It’s all about BIO thought leadership today—explaining the impact of PBMs and price controls on generics, and why we need to pass the Farm Bill to advance needed biotech solutions. (482 words, 2 minutes, 24 seconds)

BIO Chair: PBMs and IRA make drug shortages inevitable

Pharmacy benefit managers (PBMs) and the Inflation Reduction Act negatively impact the generics market, threatening drug supply, writes BIO Chair Dr. Ted W. Love in RealClearHealth.

Why it matters: “Nine in ten prescriptions are filled with generics,” he says. Recent shortages of chemotherapy drugs and other generics are symptoms of market distortions that cannot be fixed without reform of PBMs and the IRA.

Three PBMs, controlling 80% of the market, “demand steep discounts from manufacturers for favorable inclusion of their products on insurance policy formularies,” explains Dr. Love. “[P]roduction of generics migrates toward manufacturers who can deliver the goods at the lowest cost. Those who can’t compete go out of business.”

The IRA’s price controls can reduce the margins of brand-name drugs to the point where “the incentive for a generic company to enter the marketplace is gone,” leaving patients with fewer options.

The result: “The reality of PBM consolidation and IRA price controls is that when coercive power—whether from market position or government fiat—keeps prices down, shortages emerge,” he concludes. “Until this is fixed, more shortages are inevitable.”  

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Spotted at BIO

BIO CEO Rachel King at a BIO Board reception with Sen. Kyrsten Sinema (I-AZ) and Sen. Todd Young (R-IN)

Pass the Farm Bill, enable biotech solutions, says BIO

Delays in passing the Farm Bill mean we’re missing out on vital solutions to hunger and climate change, writes BIO’s VP of Agriculture & Environment Beth Ellikidis in Agri-Pulse.

Why it matters: The Farm Bill, renewed every five years, helps farmers to be more productive, protect natural resources, expand access to new energy markets, and grow biobased product markets.

The problem: Congress still needs to pass the Farm Bill, which expired Sept. 30.

We need to advance biotech solutions—for climate change, waste, and manufacturing—and the Farm Bill contains provisions that could help make this happen. These include:

• The Biorefinery Incentives program, which enables the development of infrastructure needed to transition to more sustainable biofuels, like the aviation fuels made by LanzaJet, for example.
• The Biomass Research and Development Initiative, which supports advances in reusing products currently treated as waste.
• The BioPreferred program, which promotes the uptake of biobased products—like plant-based polymers made by Virent, which provide sustainable alternatives to fossil-fuel-based plastic.
• Streamlining regulations to bring agricultural biotech to feed the growing population—like crops and inputs from Bayer CropScience, Vestaron, and Greenlight Biosciences—to the market faster.

The bottom line: “The pace and promise of agricultural biotechnology are amazing,” Ellikidis writes. “Climate change and hunger won’t wait. Neither should the Farm Bill. Congress must advance a bipartisan farm bill that’s focused on driving innovation forward.” 

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President Biden’s Thursday: No official events scheduled.

What’s Happening on Capitol Hill: A Senate Aging Committee hearing, including testimony from patient advocates, looks at access to therapies for people with rare, progressive, and serious diseases. Axios reviews the health care record of the new Speaker of the House, Mike Johnson (R-LA).