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2024 starts off with a bang: FDA approves Florida’s drug importation plan

The Food and Drug Administration (FDA) announced it authorized Florida’s Agency for Health Care Administration’s importation program of certain prescription drugs from Canada, representing a massive policy change in the US. 

The FDA has developed a pathway that allows importation of certain prescription drugs from Canada to reduce the cost of these drugs to the American consumer, without imposing additional risk to public health and safety. The pathway allows the agency to approve so-called section 804 importation program (SIP) proposals from states or Indian tribes. According to The New York Times, which broke the story this morning, 8 other states (Colorado, Maine, New Hampshire, New Mexico, North Dakota, Texas, Vermont, and Wisconsin) have laws allowing for a state drug importation program, and many are seeking, or planning to seek, FDA approval.

Though the FDA has approved Florida’s plan, hurdles remain before it can actually start importation, as outlined in The New York Times article:

While importation could be an avenue to lower drug costs, states and Indian tribes face a tortuous road to see it come to fruition. However, should this approach gain momentum, Canada may halt it completely, as its prescription drug continuum is designed to meet the needs of 38 million people — not double or triple that population. And certainly not 330 million people.

CBO outlines its assumptions about IRA’s impact on drug pricing and development

On December 21, the CBO responded to the House Budget Committee members regarding their request for additional information on how the CBO is evaluating the impact of the IRA on new drug development and drug pricing.

The CBO estimated that Medicare drug-price negotiation will reduce the budget deficit by $25 billion in 2031, with drug prices 9% and 8% lower in Part B and Part D, respectively. It also estimated the Medicare inflation rebate will contribute an additional $8 billion deficit reduction in 2031. Using a simulation model, the CBO estimated that IRA’s impact on new drug development over the next 30 years will be 13 fewer new drugs (of 1,300 estimated new drugs) coming to market. CBO noted that, contrary to expectations, venture capital investment toward pharmaceutical companies has increased since 2022. 

The CBO expects the legislation’s impact on drug prices will be minimal as it believes drug manufacturers will increase the list price of their drugs and offer greater rebates to offset the increase. The CBO expected price reductions for drugs that do not have negotiated prices but are competitors of those that are selected. Global drug revenue sales are expected to fall by 1% to 3% based on 3 key factors:

Prompted by the House’s request for information about the evaluation of drug development, the CBO recently opened a formal avenue for independent researchers and experts to submit new research and information on policies that impact patient access to new medicines. This development will help inform CBO’s analysis of future policies and address the tradeoffs of policies when policymakers make decisions on healthcare legislation.

While questions remain about the CBO findings, the office indicated that transparency is its top priority and stated it will continue to refine and improve its simulation model based on feedback from stakeholders.

Information buffet (AKA, other stuff that caught our attention)