‘Innovations like our vaccine can only happen in America’

A busy week continues with yesterday’s hearings on the price of Moderna’s COVID-19 vaccine, the proposed HHS budget, and important PBM transparency legislation—with lots of discussion on priority issues for BIO members. Highlights below—plus, what we would ask USTR today. (733 words, 3 minutes, 39 seconds)

‘Innovations like our vaccine can only happen in America’ – but that’s at risk

A jam-packed day on Capitol Hill brought Moderna CEO Stéphane Bancel (among other witnesses) before the Senate to discuss the value of lifesaving medicines and how to ensure the U.S. leads the way in future R&D.

What happened: The Senate Health, Education, Labor, and Pensions (HELP) Committee, led by drug price controls advocate Sen. Bernie Sanders (I-VT), held a hearing titled, “Taxpayers Paid Billions For It: So Why Would Moderna Consider Quadrupling the Price of the COVID Vaccine?”

“Now frankly, this presumes guilt in its title before we have learned,”said Ranking Member (and physician) Bill Cassidy (R-LA). “This is more like a show trial and a public shaming than a fact-finding mission.”

“Innovations like our vaccine can only happen in America,” said Bancel, who noted that while the government provided $1.7 billion in funding, Moderna returned more than $2.9 billion—not to mention the $5 trillion in economic value and 3 million American lives saved.

But that’s at risk: Noting the critical role of Operation Warp Speed and private industry in developing and distributing a vaccine in one year, Sen. Cassidy cautioned it “sends a hostile signal” that Moderna is being singled out.

The bottom line: As Senator Cassidy noted, "...this is not the time to discuss eliminating intellectual property rights or destroying the business models of those whom our country will need to respond to the next pandemic or develop the next life-changing cure." 

The next steps: Moderna’s Bancel confirmed that, before next fall, Moderna will increase efforts to advance and advertise their patient access program for low-income and uninsured individuals.

Also happening: Health and Human Services (HHS) Secretary Xavier Becerra appeared before the Senate Finance and Appropriations Committees to discuss the agency’s budget, where topics including the Inflation Reduction Act, Bayh-Dole, the COVID IP waiver, and much more came up. We’ll unpack those hearings tomorrow.

PBM Transparency Act passes Senate Committee

Pharmacy benefit managers (PBMs) would be prohibited from pocketing the rebates they take from drug makers under legislation approved 18-9 by the Senate Commerce Committee yesterday.

What are PBMs? Pharmacy benefit managers, or PBMs, administer and manage drug benefits such as determining the formulary of drugs covered by insurers. Frequently, drug companies pay rebates to PBMs, which should be passed on to payors or patients, but research shows that’s not happening.

The PBM Transparency Act would prohibit “spread pricing”–when PBMs demand big rebates from drug makers, pay pharmacies less, and then charge health play and payers full price. It also requires transparency around rebates PBMs take from manufacturers and what they charge insurers and pay pharmacies. 

The sponsors: Sens. Maria Cantwell (D-WA) and Chuck Grassley (R-IA) with broad bipartisan support, as well as support from BIO.

The opposition: Sen. Ted Cruz (R-TX) proposed an amendment that would have reduced the full bill to a study on PBM behaviors and how “big pharma companies operate in the supply chain,” which he said is “lacking” in the legislation. (The amendment failed.) Republicans also voiced concerns over advancing legislation amidst the current political imbalance at the FTC following the recent resignation of Republican commissioners.

What’s next: The bill heads to the full Senate, so stay tuned.

More Health News: 

Wharton Business Daily: Interview with John Crowley
John Crowley, Executive Chairman of Amicus Therapeutics and BIO Board member, discusses the vital role of the biotech industry and the current landscape.

What we would ask the USTR today

BIO submitted questions we would like addressed when U.S. Trade Representative Ambassador Katherine Tai appears before the Senate Finance Committee today.

While commending her work, BIO requested Senators on the committee ask about the following topics:

On Mexico: Please update us on the dialogue with Mexican officials and the next steps by the administration to ensure Mexico adheres to its U.S.-Mexico-Canada Agreement (USMCA) commitment to a science-based approach to biotech agricultural products.

On China: What is the administration’s strategy with respect to the Phase One agreement, especially as it relates to agricultural biotechnology?

On Korea: What’s being done under the U.S.-Korea Free Trade Agreement to compel South Korea to reform its biotech risk assessment and establish a rational regulatory framework for gene-edited products?

On the TRIPS waiver: The President’s Executive Order on Biomanufacturing recognizes the value of maintaining US global leadership in biotechnology and the importance of guarding against intellectual property theft by our competitors.  How would waiving international IP protections advance these goals?

We’ll report on the hearing tomorrow. 

President Biden’s Thursday: Celebrating the anniversary of the Affordable Care Act before flying to Canada for his first trip there as POTUS. The agenda in Canada includes the war in Ukraine, defense cooperation, climate change, and the opioid crisis, Reuters reports.

What’s Happening on Capitol Hill: Another busy day. The House Ways and Means Health Subcommittee will hold a hearing called “Why Health Care is Unaffordable: The Fallout of Democrats’ Inflation on Patients and Small Businesses.” The House Appropriations Committee will hold a hearing on President Biden’s proposed 2024 budget for the U.S. Forest Service. As mentioned, the Senate Finance Committee will question the USTR on trade.