I’ve resisted commenting on the rapid-fire news reports announced over the last couple of weeks affecting the pharmaceutical industry. Based on the past, who knows which initiative, if any, will be implemented or withdrawn? And do we really know what will develop tomorrow, or the next day, in terms of drug pricing and PBM reform? No, absolutely not.
The first Trump Administration had specific plans, in the form of PBM reform and the Biosimilar Action Plan, to enact changes that would affect the biosimilar industry in a positive way. This Administration? Seemingly no coherent plan at all.
We’ve just heard about the President’s Most Favored Nation’s executive order; though not lacking vision, it is lacking any detail or direction, leaving everything to the imagination. The Most Favored Nation pricing approach is not new. It was something discussed by Trump some 8 years ago.
If the Most Favored Nation’s drug pricing policy is successful, it will result in lower pricing for the US and higher prices elsewhere around the globe for a given pharmaceutical. How would that affect pricing for 340B, Medicaid, and Veterans Affairs programs? Chaos.
The President also indicated that he would encourage drug reimportation, which is a nonstarter in terms of mid- to long-term success. The manufacturers will quickly adapt by sending less supply to countries, such as Canada, which may be the source of the imported, lower-cost drugs. This too, is not a new concept. It is just too easily circumvented.
The underlying issue for biosimilars and biosimilar development is that this initiative would represent yet another negative influence on planning competition for biologics losing exclusivity in the future. That is on top of the IRA’s likely lowering of revenues for late-stage products and the emergence of private-label PBM drug channels, both of which will drop revenue expectations for future biosimilar products. These may be existential issues.
However, the background environment today is one of uncertainty—no, more appropriately described as chaos. Chaos in staffing and scheduling at the FDA, chaos in staffing and policy making at HHS and CDC, and obvious chaos in leadership. And with the RFK Jr hearings in Congress just completed, there is clearly no one in Control.
