This week we explore Medicare’s price negotiations, gene therapies to target hearing restoration and an innovative approach to pharmacy benefits management, or PBM. In addition, we look at a medical device that can be used to detect atrial fibrillation and the acquisition of a contract development and manufacturing organization (CDMO) by an active pharmaceutical ingredient manufacturer.
Each week we highlight five things affecting the life sciences industry. Here’s the latest.
Medicare begins price negotiations for key drugs
According to NBC News, the Biden administration, through the Centers for Medicare and Medicaid Services, has announced a list of 10 prescription drugs for price negotiations under the Inflation Reduction Act. Historically, Medicare, serving 65 million Americans, couldn’t negotiate drug prices. This change allows direct negotiations with pharmaceutical firms for high-cost medications, effective in 2026. The list includes notable drugs like Eliquis and Januvia, which together represented 20% of Medicare Part D spending from June 2022 to May 2023. While this move faces opposition from major drug companies, it aims to reduce out-of-pocket expenses for seniors.
Innovative gene therapy targets hearing restoration
Researchers have developed a novel gene therapy technique that restored hearing in mice by delivering the therapy via the cerebrospinal fluid, as reported by The Scientist. The therapy was designed to address hearing impairment, which affects over a billion people globally, often due to the dysfunction or death of cochlear cells and interacting neurons. The team, led by Maiken Nedergaard from the University of Rochester and the University of Copenhagen, and Barbara Canlon from the Karolinska Institute, used the cerebrospinal fluid to deliver viral vectors to the inner ear of adult mice. This method was found to be potentially safer and less invasive than direct surgical approaches. The therapy specifically targeted mice with a defective vesicular glutamate transporter-3 protein, which is essential for transmitting auditory signals to the brain. Post-treatment, the mice exhibited restored hearing across most sound frequencies. While the results are promising, further research is needed to refine the targeting of the viral vector and assess the safety profile in larger animals.
Blue Shield’s innovative approach to pharmacy benefits management
Per the American Hospital Association, Blue Shield of California (BSC) is introducing a novel pharmacy care model aimed at enhancing transparency and reducing drug costs. This initiative comes after BSC’s challenges with its PBM, CVS Caremark, over covering a more affordable version of a drug. The new plan will transition BSC’s drug supply management from CVS Health’s PBM to a consortium of five companies. This move is projected to save BSC’s 4.8 million members up to $500 million annually, translating to a 10% to 15% reduction in its yearly drug expenditure. The model, set to launch in 2025, will involve companies like Amazon Pharmacy for prescription deliveries and Mark Cuban Cost Plus Drug Company for transparent pricing. While this approach aims to revolutionize the PBM landscape, its effectiveness and potential challenges remain topics of discussion among analysts.
Smart Scale receives FDA clearance for atrial fibrillation detection
Withings has obtained FDA clearance for its Body Scan Health Station, which is designed to detect atrial fibrillation using a 6-lead electrocardiogram, according to Medical Device Network. The device provides data on biomarkers such as heart rate and vascular age. AFib, a common cardiac arrhythmia, leads to over 450,000 hospitalizations annually in the U.S. The Body Scan Health Station aims to offer users a comprehensive view of their heart patterns associated with AFib, which can be shared with health care professionals. The device is expected to be available commercially by the end of September.
EuroAPI set to acquire German CDMO
Active pharmaceutical ingredients manufacturer, EuroAPI, has entered into an agreement to acquire BianoGMP, a German-based CDMO that specializes in oligonucleotides. The acquisition, valued at around €10 million, encompasses both the purchase price and capital expenditure intended to enhance Biano’s capacity for larger and more intricate projects. BianoGMP, established in 2017 in Gera, Germany, primarily focuses on small-scale, early-stage projects and boasts a diverse clientele across Europe and Asia. EuroAPI anticipates that this acquisition will complement its planned expansion in Frankfurt, Germany, in 2025, allowing for larger-scale projects. Karl Rotthier, CEO of EuroAPI, highlighted the strategic move as an effort to bolster EuroAPI’s CDMO offerings and emphasized the synergy between the two companies’ capabilities, according to Chemanager Online.
Due to the Labor Day holiday next week, we’ll be pausing publication of the “5 things” blog. We’ll resume the following week.
For more insights in life sciences, check out RSM’s industry outlook.
