Good Day BIO: State of the Union takeaways

We recap what Biden said (or didn’t say) about biotech in the State of the Union, and Day 2 of the BIO CEO and Investor Conference, where drug price controls put a damper on an otherwise optimistic outlook. (663 words, 3 minutes, 18 seconds)

State of the Union: Ending COVID, defending drug price controls

President Biden used last night’s State of the Union address to hail the end of the COVID-19 emergency, but he neglected to mention biotech’s role—and touted the drug price controls that will harm future innovation.

Here are a few takeaways for biotech:

COVID-19: “Thanks to the resilience of the American people and the ingenuity of medicine, we have broken COVID’s grip on us.” (No mention of the impact of price controls on medical “ingenuity.”)

Drug prices: “Make no mistake, if you try to do anything to raise the cost of prescription drugs, I will veto it,” he said, noting that controlling drug prices “cuts the federal deficit.” He called for a $35 cap on insulin for everyone, saying, “Big Pharma has been unfairly charging people hundreds of dollars—and making record profits.”

Cancer Moonshot, medical research: The federal effort to reduce the cancer death rate by 50% should be as successful as PEPFAR at fighting AIDS. “There’s one reason why we have been able to do all of these things: our democracy itself.” (What about biotech?) He said the launch of ARPA-H will forward medical research.

Addiction: He called for enforcement to shut down fentanyl production—read BIO’s new report calling for more support for pain relief and addiction research.

Climate: “The Inflation Reduction Act is also the most significant investment ever in climate change. Ever.” He mentioned investments in clean energy but mostly discussed infrastructure improvements.

BIO CEOs: We’re already seeing the impact of price controls

Day 2 of the BIO CEO and Investor Conference began with the policy outlook—and a discussion of what BIO’s Chief Policy Officer John Murphy called the “profound impacts” of price controls on patients and innovation.

It’s not negotiation—it’s “enforced genericization with government price fixing,” said OrbiMed Advisors’ Peter Thompson. It’s “much more of a rate-setting approach and not a negotiation,” echoed Bristol Myers Squibb’s Chris Mancill.

We’re already seeing the consequences—and “capital allocation decisions” began to change in the summer before price controls were implemented, said Richard Pops, Chairman & CEO of Alkermes, Inc., which develops drugs in neuroscience and oncology.

Communicating the value of a drug will be key—including explaining the role of pharmacy benefit managers (PBMs) and programs like 340B in the prices patients pay. “340B might be a flashpoint because it’s so egregiously being exploited,” said Pops. It’s a clear example of all the “hands out along the supply chain.”

Why it matters: In 2022, biopharma “conducted over 7,000 clinical programs, including more than 3,000 for cancer, 182 for cardiovascular diseases, 111 for Alzheimer’s, and 57 for Type II diabetes,” writes BIO’s Interim CEO Rachel King in RealClearPolicy. “Without a supportive policy environment, scientists will struggle to make future breakthroughs” and “cut short a golden age of drug development.”

The bottom line: “It’s essential that we foster a strong policy environment that allows drug development to keep up with its potential,” she concludes.

Read and share Rachel King’s op-ed in RealClearPolicy.

What else you missed from the BIO CEO and Investor Conference…

• BIO launched a new report on the pain and addiction pipeline—BIO’s David Thomas told us the key takeaways.
• Trials can be decentralized—but patients must remain at the center.
• The market outlook is strong—but drug price controls and unchecked pharmacy benefit managers could have an impact on future investment and innovation.
• When working with China, collaboration and competition must be mutually exclusive.

President Biden’s Wednesday: Visiting Madison, WI, to promote his economic plan.

What’s Happening on Capitol Hill: Two House Energy and Commerce subcommittees—health and oversight—will discuss the federal response to the COVID-19 pandemic. “With more than one million Americans lost to the pandemic and our government health agencies having lost the American public’s trust due to misguided mandates and lockdowns, it’s critical to thoroughly examine all aspects of the pandemic response,” says a statement from the committee. Witnesses include FDA Commissioner Robert Califf, CDC Director Rochelle Walensky, NIH acting director Lawrence Tabak, and Dawn O’Connell, the Assistant HHS Secretary for Preparedness and Response.