Pharma targets Colorado drug affordability board

Mar 29, 2024

Driving The Day

The Amgen logo is displayed outside Amgen headquarters in Thousand Oaks, California.

Drugmaker Amgen is suing Colorado's Prescription Drug Affordability Board after the agency said the state's patients couldn't afford one of its drugs. | Mario Tama/Getty Images

PDAB LAWSUIT BUILDS ON GENERIC FIGHT — The first lawsuit targeting a state agency’s power to cap what it pays insurers for certain expensive brand-name drugs seems to have taken a cue from challenges filed by generic drugmakers and their advocates against price-gouging laws in other states.

Amgen, the maker of autoimmune drug Enbrel, sued Colorado’s Prescription Drug Affordability Board last week after the agency decided the medication is “unaffordable” for the state’s patients. The company’s suit argues that the law underpinning the board’s authority is unconstitutional, preempts federal patent law and undermines interstate commerce.

Background: Some state PDABs have the power to set an upper payment limit for certain pricy drugs — authority that observers say could help the agencies withstand legal scrutiny since the focus is on what insurers in the state pay for medications instead of what manufacturers charge.

“It is a limit on payment, not on drug prices,” Hemi Tewarson, executive director of the National Academy for State Health Policy, said. “That’s just a key distinction.”

In other states: Seven states have established similar boards in recent years to try to contain costs for state-funded entitlement programs and state residents. Some states have also passed price-gouging laws, covering certain generic drugs sold within their borders amid concerns about spiking costs for medications generally expected to be cheaper than their name-brand counterparts.

A federal appeals court in 2018 overturned Maryland’s price-gouging law, and the Association for Accessible Medicines, a trade group for generic and biosimilar drugmakers and distributors, has challenged similar statutes in Illinois and Minnesota, with a judge blocking the latter state from enforcing its law in December.

“Industry is trying to find ways to build on some of the success it’s had,” said Zach Baron, director of Georgetown Law's Health Policy and the Law Initiative.

An Amgen spokesperson said there’s “no legal basis for the Board’s actions or haphazard process throughout the review period” for Enbrel, adding the company is “committed” to helping patients afford the drug.

Lessons learned? Still, the affordability boards take a different approach to mitigating drug costs than the price-gouging laws, and their structure could shield them from the “pitfalls” Maryland experienced, said Robin Feldman, a professor at UC Law San Francisco.

“The states have learned from the Maryland decision,” she said.

IT’S FRIDAY. WELCOME BACK TO PRESCRIPTION PULSE. What are your solar eclipse plans?

Send news and tips to Lauren Gardner (lgardner@politico.com or @Gardner_LM) or David Lim (dlim@politico.com or @davidalim).

Eye on the FDA

President Joe Biden and Vice President Kamala Harris hold an event to highlight their administration's approach to artificial intelligence.

The Biden-Harris administration issued its first set of government-wide artificial intelligence policies, building on the president's AI executive order in October. | Chip Somodevilla/Getty Images

OMB SETS AI POLICY — The Office of Management and Budget debuted the first government-wide artificial intelligence policy Thursday as part of President Joe Biden’s executive order on the burgeoning technology.

The memo to federal department and agency heads outlines guidance for addressing risks and ensuring transparency of AI use across government.

By Dec. 1, federal agencies must implement safeguards when using AI tools that could affect Americans’ health and safety, according to a statement from Vice President Kamala Harris’ office.

“When AI is used in the Federal healthcare system to support critical diagnostics decisions, a human being is overseeing the process to verify the tools’ results and avoids disparities in healthcare access,” Harris’ office said.

The guidance “encourages agencies to responsibly experiment with generative AI with adequate safeguards in place,” Harris’ office said, pointing to CMS’ work using AI “to reduce waste and identify anomalies in drug costs.”

In Congress

SANDERS SEEKS NOVO CEO MEETING — Senate HELP Committee Chair Bernie Sanders (I-Vt.) wants to personally meet with the Novo Nordisk CEO to discuss the price of its blockbuster weight-loss drug Ozempic, Sanders spokesperson Freeland Ellis confirmed.

The request, first reported by Bloomberg on Thursday, follows the lawmaker’s recent blast of the Danish drugmaker for the drug’s cost, which has a list price of more than $900 a month. Sanders cited a Yale study in JAMA Network Open estimating that glucagon-like peptide-1 agonists, a jargony description of Ozempic and other weight-loss drugs, could be produced for as little as $0.75 to $72.49 a month.

Novo Nordisk spokesperson Jamie Bennett said in an email that the company does "not have insight into whether or not Senator Sanders will be meeting our CEO.”

Tobacco

MENTHOL WATCH? March is nearly over and the FDA’s pending final rule to ban menthol cigarettes is still under review at the White House.

The Biden administration’s most recent published agenda targeted the rule’s release for this month. But the Office of Information and Regulatory Affairs is scheduled to meet with public affairs firm Forbes Tate Partners on April 2 to discuss the rule.

The White House did not respond to a request for comment on the status of the pending regulation.

Reshma Ramachandran, chair of the Doctors for America FDA Task Force, met with OIRA last week. She said White House officials asked about European studies at the meeting that explored the impact of menthol bans in countries across the pond.

Pharma Moves

Natasha Phelps joins the FDA’s Center for Tobacco Products as associate director for policy and partnerships. She was director of equity-center policies for advocacy group Center for Black Health & Equity.

Pharma in the States

JUSTICE FOR VACCINES — West Virginia Gov. Jim Justice vetoed legislation this week that would have eliminated vaccine requirements for virtual public schools and allowed private and religious schools to set their own standards.

“ … in this matter, I will defer to our licensed medical professionals who have come forward overwhelmingly to say this bill could and likely would result in reduced immunity and harm to West Virginia’s kids,” said Justice, who is seeking the GOP nomination to fill the Senate seat of retiring Democrat Joe Manchin.

WHAT WE'RE READING

Proponents of site-neutral payment policies to rein in Medicare spending are already lobbying lawmakers to include them in an end-of-year legislative package after they were not included in President Biden’s fiscal 2024 budget, POLITICO’s Megan R. Wilson reports.

Document Drawer

The FDA published over-the-counter monograph drug facility user fee rates for fiscal 2024.

The FDA launched a searchable database Thursday for tobacco products that can be legally sold in the U.S.

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