Kaiser Health News

A More Aggressive FTC Is Starting to Target Drug Mergers and Industry Middlemen

Published

12 months ago

May 22, 2023

by Arthur Allen
Mon, 22 May 2023 09:00:00 +0000

Under the leadership of an aggressive opponent of anti-competitive business practices, the Federal Trade Commission is moving against drug companies and industry middlemen as part of the Biden administration's push for lower drug prices at the pharmacy counter.

On May 16, the FTC sued to block the merger of drugmakers Amgen and Horizon Therapeutics, saying the tangled web of drug industry deal-making would enable Amgen to leverage the monopoly power of two top Horizon drugs that have no rivals.

In its lawsuit, the FTC said that if it allowed Amgen's $27.8 billion purchase to go through, Amgen could pressure the companies that manage access to prescription drugs — pharmacy benefit managers, or PBMs — to boost the two extremely expensive Horizon products in a way that would inhibit any competition.

The suit, the first time since 2009 that the FTC has tried to block a drug company merger, reflects Chair Lina Khan's strong interest in antitrust action. In announcing the suit, the agency said that by fighting monopoly powers it aimed to tame prices and improve patients' access to cheaper products.

FTC's action is a “shot across the bow for the pharmaceutical industry,” said Robin Feldman, a professor and drug industry expert at the University of California College of the Law-San Francisco. David Balto, a former FTC official and attorney who fought the 2019 Bristol-Myers Squibb-Celgene and 2020 AbbVie-Allergan mergers, said FTC's action was long overdue.

The Horizon-Amgen merger would “cost consumers in higher prices, less choice, and innovation,” he said. “The merger would have given Amgen even more tools to exploit consumers and harm competition.”

The FTC also announced an expansion of a yearlong investigation of the PBMs, saying it was looking at two giant drug-purchasing companies, Ascent Health Services and Zinc Health Services. Critics claim the PBMs set up these companies to conceal profits.

When Amgen announced its purchase of Horizon in December — the biggest biopharma transaction in 2022 — it showed particular interest in Horizon's drugs for thyroid eye disease (Tepezza) and severe gout (Krystexxa), which the company was charging up to $350,000 and $650,000, respectively, for a year of treatment. The complaint said the merger would disadvantage biotech rivals that have similar products in advanced clinical testing.

Amgen could promote the Horizon drugs through “cross-market bundling,” the FTC said. That means requiring PBMs to promote some of Amgen's less popular drugs — the Horizon products, in this case — in exchange for Amgen offering the PBMs large rebates for its blockbusters. Amgen has nine drugs that each earned more than $1 billion last year, according to the complaint, the most popular being Enbrel, which treats rheumatoid arthritis and other diseases.

The three biggest PBMs negotiate prices and access to 80% of prescription drugs in the U.S., giving them enormous bargaining power. Their ability to influence which drugs Americans can get, and at what price, enables the PBMs to obtain billions in rebates from drug manufacturers.

“The prospect that Amgen could leverage its portfolio of blockbuster drugs to gain advantages over potential rivals is not hypothetical,” the FTC complaint states. “Amgen has deployed this very strategy to extract favorable terms from payers to protect sales of Amgen's struggling drugs.”

The complaint noted that biotech Regeneron last year sued Amgen, alleging that the latter's rebating strategy harmed Regeneron's ability to sell its competing cholesterol drug, Praluent. Amgen's Repatha generated $1.3 billion in global revenue in 2022.

It “may be effectively impossible” for smaller rivals to “match the value of bundled rebates that Amgen would be able to offer” as it leverages placement of the Horizon drugs on health plan formularies, the complaint states.

Business analysts were skeptical that the FTC action would succeed. Until now the commission and the Department of Justice have shied away from challenging pharmaceutical mergers, a precedent that will be hard to overcome.

Research on the impact of mergers has shown that they often benefit shareholders by increasing stock prices, but hurt innovation in drug development by trimming research projects and staffing.

Waves of consolidation shrank the field of leading pharma companies from 60 to 10 from 1995 to 2015. Most of the mergers in recent years have involved “big fish buying up lots of little fish,” such as biotech companies with promising drugs, Feldman said.

The giant Amgen-Horizon merger is an obvious exception, and therefore a good opportunity for the FTC to demonstrate a “theory of harm” around drug industry bundling maneuvers with PBMs, said Aaron Glick, a mergers analyst with Cowen & Co.

But that doesn't mean the FTC will win.

Amgen may or may not engage in anti-competitive practices, but “a separate question is, how does this lawsuit fit under current antitrust laws and precedent?” Glick said. “The way the law is set up today, it seems unlikely it will hold up in court.”

The FTC's argument about Amgen's behavior with Horizon products is hypothetical. The pending Regeneron suit against Amgen, as well as other, successful lawsuits, suggests that rules are in place to suppress this kind of anti-competitive behavior when it occurs, Glick said.

The judge presiding over the case in U.S. District Court in Illinois is John Kness, who was appointed by then-President Donald Trump and is a former member of the Federalist Society, whose membership tends to be skeptical of antitrust efforts. The case is likely to be settled by Dec. 12, the deadline for the merger to go through under current terms.

Amgen sought to undercut the government's case by agreeing not to bundle Horizon products in future negotiations with pharmacy benefit managers. That promise, while hard to enforce, might get a sympathetic hearing in court, Glick said.

Still, even a loss would enable the FTC to shed light on a problem in the industry and what it sees as a deficiency in antitrust laws that it wants Congress to correct, he said.

The day after suing to stop the merger, the FTC announced it was pushing further into an investigation of pharmacy benefit managers that it began last June. The agency demanded information from Ascent and Zinc, the two so-called rebate aggregators — drug purchasing organizations set up by PBMs Express Scripts and CVS Caremark.

At a May 10 hearing, Eli Lilly & Co. CEO Dave Ricks said that most of the $8 billion in rebate checks his company paid last year went to rebate aggregators, rather than to the PBMs directly. A “big chunk” of the $8 billion went overseas, he said. Ascent is based in Switzerland, while Emisar Pharma Services, an aggregator established by PBM OptumRx, is headquartered in Ireland. Zinc Health Services is registered in the U.S.

Critics say the aggregators enable PBMs to obscure the size and destination of rebates and other fees they charge as intermediaries in the drug business.

The PBMs say their efforts reduce prices at the pharmaceutical counter. Testimony in Congress and in FTC hearings over the past year indicate that, at least in some instances, they actually increase them.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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By: Arthur Allen
Title: A More Aggressive FTC Is Starting to Target Drug Mergers and Industry Middlemen
Sourced From: kffhealthnews.org/news/article/a-more-aggressive-ftc-is-starting-to-target-drug-mergers-and-industry-middlemen/
Published Date: Mon, 22 May 2023 09:00:00 +0000

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Kaiser Health News

KFF Health News’ ‘What the Health?’: Abortion Access Changing Again in Florida and Arizona

Published

5 hours ago

May 2, 2024

Staff Editor

Thu, 02 May 2024 19:30:00 +0000

The Host

Julie Rovner
KFF Health News

@jrovner

Read Julie's stories.

Julie Rovner is chief Washington correspondent and host of KFF Health News' weekly health policy news podcast, “What the Health?” A noted expert on health policy issues, Julie is the author of the critically praised reference book “Health Care Politics and Policy A to Z,” now in its third edition.

The national abortion landscape was shaken again this week as Florida's six-week abortion ban took effect. That leaves North Carolina and Virginia as the lone Southern states where abortion remains widely available. Clinics in those states already were overflowing with patients from across the region.

Meanwhile, in a wide-ranging interview with Time magazine, former President Donald Trump took credit for appointing the Supreme Court justices who overturned Roe v. Wade, but he steadfastly refused to say what he might do on the abortion issue if he is returned to office.

This week's panelists are Julie Rovner of KFF Health News, Sarah Karlin-Smith of the Pink Sheet, Alice Miranda Ollstein of Politico, and Rachana Pradhan of KFF Health News.

Panelists

Sarah Karlin-Smith
Pink Sheet

@SarahKarlin

Read Sarah's stories.

Alice Miranda Ollstein
Politico

@AliceOllstein

Read Alice's stories.

Rachana Pradhan
KFF Health News

@rachanadpradhan

Read Rachana's stories.

Among the takeaways from this week's episode:

Florida's new, six-week abortion ban is a big deal for the entire South, as the state had been an abortion haven for patients as other states cut access to the procedure. Some clinics in North Carolina and southern Virginia are considering expansions to their waiting and recovery rooms to accommodate patients who now must travel there for care. This also means, though, that those traveling patients could make waits even longer for local patients, including many who rely on the clinics for non-abortion services.
Passage of a bill to repeal Arizona's near-total abortion ban nonetheless leaves the state's patients and providers with plenty of uncertainty — including whether the ban will temporarily take effect anyway. Plus, voters in Arizona, as well as those in Florida, will have an opportunity in November to weigh in on whether the procedure should be available in their state.
The FDA's decision that laboratory-developed tests must be subject to the same regulatory scrutiny as medical devices comes as the tests have become more prevalent — and as concerns have grown amid high-profile examples of problems occurring because they evaded federal review. (See: Theranos.) There's a reasonable chance the FDA will be sued over whether it has the authority to make these changes without congressional action.
Also, the Biden administration has quietly decided to shelve a potential ban on menthol cigarettes. The issue raised tensions over its links between health and criminal justice, and it ultimately appears to have run into electoral-year headwinds that prompted the administration to put it aside rather than risk alienating Black voters.
In drug news, the Federal Trade Commission is challenging what it sees as “junk” patents that make it tougher for generics to come to market, and another court ruling delivers bad news for the pharmaceutical industry's fight against Medicare drug negotiations.

Plus, for “extra credit” the panelists suggest health policy stories they read this week that they think you should read, too:

Julie Rovner: ProPublica's “A Doctor at Cigna Said Her Bosses Pressured Her To Review Patients' Cases Too Quickly. Cigna Threatened To Fire Her,” by Patrick Rucker, The Capitol Forum, and David Armstrong, ProPublica.

Alice Miranda Ollstein: The Associated Press' “Dozens of Deaths Reveal Risks of Injecting Sedatives Into People Restrained by Police,” by Ryan J. Foley, Carla K. Johnson, and Shelby Lum.

Sarah Karlin-Smith: The Atlantic's “America's Infectious-Disease Barometer Is Off,” by Katherine J. Wu.

Rachana Pradhan: The Wall Street Journal's “Millions of American Kids Are Caregivers Now: ‘The Hardest Part Is That I'm Only 17,” by Clare Ansberry.

Also mentioned on this week's podcast:

Time's “How Far Trump Would Go,” by Eric Cortellessa.
NPR's “Why Is a 6-Week Abortion Ban Nearly a Total Ban? It's About How We Date a Pregnancy,” by Selena Simmons-Duffin.
NPR's “'Sicko's' Peeno Sees Few Gains in Health Insurance,” by Julie Rovner.
CNN's “Walmart Will Close All of Its Health Care Clinics,” by Nathaniel Meyersohn.

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Editor

To hear all our podcasts, click here.

And subscribe to KFF Health News' “What the Health?” on Spotify, Apple Podcasts, Pocket Casts, or wherever you listen to podcasts.

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Title: KFF Health News' ‘What the Health?': Abortion Access Changing Again in Florida and Arizona
Sourced From: kffhealthnews.org/news/podcast/what-the-health-345-abortion-access-florida-arizona-may-2-2024/
Published Date: Thu, 02 May 2024 19:30:00 +0000

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Kaiser Health News

DIY Gel Manicures May Harm Your Health

Published

10 hours ago

May 2, 2024

Staff Editor

Tarena Lofton
Thu, 02 May 2024 09:00:00 +0000

A fresh set from the comfort of your own home? DIY gel nails have been all the rage on social media, but the practice could cause you to develop a life-changing allergy. In a TikTok video, creator @alina.gene describes developing an acrylate allergy from doing gel nails at home. Now, when exposed to acrylates, the creator feels severe pain.

The creator warns viewers not to self-apply nail polish that requires a UV light to cure. In later videos, @alina.gene explains that at-home use differs from in-salon use because salon professionals have access to higher-quality chemicals that are less likely to cause reactions and that they also have proper training on how to safely apply the products.

“I know I sound real dramatic because an allergy to gel nails or even an allergy to acrylates isn't going to kill you, but the thing is, in the wrong situation it could prevent you from getting lifesaving medical care,” said @alina.gene in another video. Common medical products contain acrylates, and developing this allergy can cause major issues in obtaining future medical care.

We asked an allergist to walk us through this viral video.

If you enjoyed this story from the KFF Health News social team, follow us on Instagram @KFFHealthNews.

✍️: KFF Health News Audience Engagement Team

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By: Tarena Lofton
Title: DIY Gel Manicures May Harm Your Health
Sourced From: kffhealthnews.org/news/article/diy-gel-manicures-health-risks/
Published Date: Thu, 02 May 2024 09:00:00 +0000

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https://www.biloxinewsevents.com/robert-f-kennedy-jr-is-wrong-about-a-ban-on-nih-research-about-mass-shootings/

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Kaiser Health News

Robert F. Kennedy Jr. Is Wrong About a Ban on NIH Research About Mass Shootings

Published

12 hours ago

May 2, 2024

Staff Editor

Louis Jacobson, PolitiFact
Thu, 02 May 2024 09:00:00 +0000

“Congress prohibits the NIH from researching the cause of mass shootings.”

Robert F. Kennedy Jr. in an April 21 post on X

The National Institutes of Health is the federal government's main agency for supporting medical research. Is it barred from researching mass shootings? That's what presidential candidate Robert F. Kennedy Jr. said recently.

Kennedy, whose statements about conspiracy theories earned him PolitiFact's 2023 “Lie of the Year,” is running as an independent third-party candidate against President Joe Biden, the presumptive Democratic candidate, and the presumptive Republican nominee, former President Donald Trump.

On April 21 on X, Kennedy flagged his recent interview with conservative commentator Glenn Beck, which touched on gun policy. Kennedy summarized his gun policy views in the post, writing, “The National Institutes of Health refuses to investigate the mystery; in fact, Congress prohibits the NIH from researching the cause of mass shootings. Under my administration, that rule ends — and our kids' safety becomes a top priority.”

But this information is outdated.

In 1996, Congress passed the “Dickey Amendment,” an appropriations bill provision that federal officials widely interpreted as barring federally funded research related to gun violence (though some observers say this was a misinterpretation). Congress in 2018 clarified that the provision didn't bar federally funded gun-related research, and funding for such efforts has been flowing since 2020.

Kennedy's campaign did not provide evidence to support his statement.

What Was the Dickey Amendment?

After criticizing some federally funded research papers on firearms in the mid-1990s, pro-gun advocates, including the National Rifle Association, lobbied to halt federal government funding for gun violence research.

In 1996, Congress approved appropriations bill language saying that “none of the funds made available for injury prevention and control at the Centers for Disease Control and Prevention may be used to advocate or promote gun control.” The language was named for one of its backers, Rep. Jay Dickey (R-Ark).

But the Dickey Amendment, as written, did not ban all gun-related research outright.

“Any honest research that was not rigged to produce results that helped promote gun control could be funded by CDC,” said Gary Kleck, a Florida State University criminologist. But CDC officials, experts said, interpreted the Dickey Amendment as banning all gun-related research funding.

This perception meant the amendment “had a chilling effect on funding for gun research,” said Allen Rostron, a University of Missouri-Kansas City law professor who has written about the amendment. Federal agencies “did not want to take a chance on funding research that might be seen as violating the restriction” and so “essentially were not funding research on gun violence.”

Also, the Dickey Amendment targeted only the CDC, not all other federal agencies. Congress expanded the restriction to cover NIH-funded research in 2011.

Although the Dickey Amendment didn't bar gun-related research, federal decision-makers acted as though it did by not pursuing such research.

Moving Past the Dickey Amendment

Over time, critics of the gun industry made an issue of the Dickey Amendment and gathered congressional support to clarify the amendment.

In 2018, lawmakers approved language that said the amendment wasn't a blanket ban on federally funded gun violence research. By 2020, federal research grants on firearms began to be issued again, starting with $25 million to be split between the CDC and NIH.

By now, the CDC and NIH are funding a “large portfolio” of firearm violence-related research, said Daniel Webster, a professor at the Johns Hopkins Bloomberg School of Public Health.

Also, the Justice Department's National Institute of Justice has funded the largest study of mass shootings to date, Webster said, and is seeking applications for studies of mass shootings.

Our Ruling

Kennedy said, “Congress prohibits the NIH from researching the cause of mass shootings.”

Although the Dickey Amendment, a provision of appropriations law supported by the gun industry, didn't prohibit all federally supported, gun-related research from 1996 to 2018, decision-makers acted as though it did.

However, in 2018, Congress clarified the provision's language. And since 2020, CDC, NIH, and other federal agencies have funded millions of dollars in gun-related research, including studies on mass shootings.

We rate Kennedy's statement False.

Our Sources

Robert F. Kennedy Jr. post on X, April 21, 2024

National Institutes of Health, “NIH Awards Additional Research and Training Grants to Support Firearm Injury and Mortality Prevention Science,” Sept. 20, 2023

National Institute of Justice, “Public Mass Shootings: Database Amasses Details of a Half Century of U.S. Mass Shootings with Firearms, Generating Psychosocial Histories,” Feb. 3, 2022

National Institute of Justice, “NIJ FY24 Research and Evaluation on Firearm Violence and Mass Shootings,” Feb. 5, 2024

Centers for Disease Control and Prevention, “Funded Research,” accessed April 22, 2024

American Psychological Association, “A Thaw in the Freeze on Federal Funding for Gun Violence and Injury Prevention Research,” April 1, 2021

Allen Rostron, “The Dickey Amendment on Federal Funding for Research on Gun Violence: A Legal Dissection” (American Journal of Public Health), July 2018

Email interview with Gary Kleck, a Florida State University criminologist, April 22, 2024

Email interview with Daniel W. Webster, professor at the Johns Hopkins Bloomberg School of Public Health, April 22, 2024

Email interview with Jaclyn Schildkraut, executive director of the Regional Gun Violence Research Consortium at the Rockefeller Institute of Government, April 22, 2024

Email interview with Mike Lawlor, University of New Haven criminologist, April 22, 2024

Email interview with Allen Rostron, University of Missouri-Kansas City law professor, April 22, 2024

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By: Louis Jacobson, PolitiFact
Title: Robert F. Kennedy Jr. Is Wrong About a Ban on NIH Research About Mass Shootings
Sourced From: kffhealthnews.org/news/article/fact-check-rfk-jr-wrong-nih-research-mass-shootings-gun-control-dickey-amendment/
Published Date: Thu, 02 May 2024 09:00:00 +0000

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