Co-Pays, Coupons & Patient Assistance: What a Difference a Year Makes

Posted by on Feb 22, 2016 in Uncategorized | 0 comments

I’m speaking this week at a conference on drug couponing programs. Actually, the Second Annual Summit, if you use the politically-correct terminology. I spoke at last year’s event (the First Annual, I suppose), and it’s amazing how much a topic can change in a year.

The invitation was to describe Washington regulatory concerns in the field of drug copay support. Which might sound rather humdrum  (my father’s word for “boring”) until you dig a bit deeper. Remember all the recent headlines about drugs whose prices went from 0-60 in no-time-flat, often while simultaneously promising patients an out-of-pocket “no more than $10”?

Does the name Valeant mean anything to you? How about Turing? How about patients telling Congress how they’re dying because their drugs are just too expensive. Oh, yeah, THAT topic.

Funny that just a year ago, I spoke to this same conference and predicted “something” was going to happen over the next 2-5 years that would make the feds wake up and start filing charges. Maybe under current law – lots of opportunity there – and maybe under some new law responding to a crisis. (Yes, I think Congress can still pass a patient protection law even in the current gridlock – everyone wants to protect Granny from being thrown under a bus.)

And here we are, a year later. And I’m afraid that when Turing’s CEO  called a Congressional committee a bunch of imbeciles, he should have included himself in that number. Because the goose’s golden eggs might be selling for much lower prices not so far down the road. Even without a patient assistance program.

I’ll check in again after the conference.

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Valeant: Is the Story Over?

Posted by on Feb 19, 2016 in Uncategorized | 0 comments

An investor group asked me to speak about the post-Valeant world in terms of drug price hikes, criminal liability, and other things that go bump in the night. My nondisclosure period is now over (Wall St. might call this a “quiet period” but I’m rarely quiet). So here are some slides for anyone interested. (Click on graphic,  then you’ll get to the browsable slideshow.)


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Turing Pharma and the Pricing Battles – Part II

Posted by on Feb 8, 2016 in Uncategorized | 0 comments

Shkreli at hearingsShkreli tweet(see Part I for the more substantive, if still cynical, point of view on the Turing battles)

Sometimes, things get so bad, they’re good. At least, that’s one possible explanation for the battle for affordable pricing that Turing Pharmaceuticals and its CEO, Martin Shkreli began.

Mr. Shkreli might be crazy, but he can’t be as crazy as the news reports might suggest. Hedge funds wouldn’t have hired anyone straight out of the loony bin. Surely he didn’t want to open a Pandora’s pill bottle of investigations into healthcare economic policy in a monopolistic supply chain. So, I’ve been trying to pull together what he might hear if Dr. Phil were his personal doctor – WHAT WAS HE THINKING?

I’ve got an idea so ridiculous, so far out, so offensive, that it might just be worth pondering.

You might recall “The Producers.” Plot: unsavory Broadway show producer, after several money-losing plays, decides to pit the Broadway capital market against itself. Sell a Ponzi scheme full of ownership rights in the next play, then produce a flop and walk away rich with other people’s money.

The plot almost works. Investors flock to their door, the stars get to work producing the worst flop ever, and wait eagerly for opening night when the show might close after the first reviews arrive and the unspent funds jingle in their pockets all the way to Rio.

Even if you forget the movie itself, you might remember the offensive-to-all-sectors musical number, “Springtime for Hitler and Germany,” complete with a chorus of goose-stepping dancers.

Focus now on that one small moment kept them from outrageous fortune: their play turned out so over-the-top bad that the opening night audience thought it was a farce. In the “play within the plot,” the audience laughed its way to the final curtain, the reviews lauded the comic genius, and each of the dozens of owners demanded a share of the huge profits.

Sometimes, a production can be so bad, it’s good.

So here’s a possible remake of the Mel Brooks “The Producers.” The PHARMA Producers. Perhaps you can imagine…

Some young, cocky Wall Street type starts out in a hedge fund. Likes it enough to create his own, and fails. And again, and fails again (perhaps even with a string of IOUs). Moves out of pharma investing and into the CEO chair of a little drug company, where he fails yet again. At which point the plot can begin.

The star (villain?) makes a partnership, and perhaps even a side bet, with some other hedge fund friends. He’ll get another CEO job at another drug firm. (He only has to hope his Ponzi-like habits from the old job don’t catch up to him, or he could go to jail for reasons unrelated to the pharma industry.) He’ll do the dirty work, and they’ll run the back-end investment operations.

While he mugs for the cameras, his friends will scrape up every penny possible… and SHORT THE PHARMA STOCKS. ESPECIALLY THE BIOTECH STOCKS. Any drug company sure to lose if the pipeline for expensive drugs starts dropping as fast as the pipeline for Brent Crude. Once the investments are in place, simply leave everything to The Producer.

His plan: buy a drug that helps vulnerable but vocal populations like AIDS patients. Jack the price up high enough for nosebleeds. Publicize your efforts. Stay silent about pricing safeguards like Medicaid rebate formulas that claw back any price hikes beyond CPI. Ignore the industry’s discussions of successful innovation saving lives and lowering overall healthcare costs. In short, don’t let any good news out the door. It’s the rank opposite of any normal crisis control plan.

The CEO can make things look very, very evil. And then, all he needs to do is… wait.

Wait.… Wait for industry to disown you. Wait for Congress to subpoena you. (Could you ever muster the contempt to call Congress morons?) Wait enough that you’ve got nothing else to do besides putting your daily life on an online webcam. Act non-repentant and even proud. Spotlight how the whole pharma industry must be unsafe at any speed. If you want a nice plot twist to make the script more believable, let your friends from your old funds bring securities fraud suits against you in the middle of this, while you still show no remorse.

Watch the scene play out, while the CEO becomes the poster child for every bad aspect of our healthcare system. But while the script unfolds, the CEO’s buddies are shorting the strong-pipeline pharmas and making more easy money than Eddie Murphy in Trading Places. Let’s assume that CEO Shkreli is smart enough to demand a nice share of the dough, because he’ll need it to pay for his defense team.

A nice plot premise for a movie, of course.  The product of an over-vivid imagination, obviously. But whether the story is any more plausible than alternative explanations for the Shkreli tale… hard to say. This plot might as well swap out the politically-incorrect “Springtime for Hitler and Germany” for a cover of Billy Joel’s warning, “You may be right, I may be crazy, but it just might be a lunatic you’re looking for.”

I bet his hedge fund buddies would be laughing all the way to the bank. Even after Shkreli’s cut.

This makes a better story than the story as spun through today’s headlines, or at least a more humorous one. It also allows us a moment’s repose in a very busy Washington open season across a range of medical treatments. Grab some popcorn and let’s all see how it unfolds.

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Turing Pharma and the Pricing Battles – Part I

Posted by on Feb 1, 2016 in Uncategorized | 0 comments

Shkreli photo from TVShkreli stocksplunge(See Part II for another side of this story)

Sometimes, things get so bad, they’re good.

Anyone who’s seen the news lately has caught wind of Turing Pharmaceuticals and its CEO Martin Shkreli. Famous for a huge, instant price increase on an off-patent rare-disease drug, Shkreli is infamously non-apologetic in his goal of improving returns to investors. There’s understandable outrage – from the Presidential campaign trail and Congress to patient groups and consumers – but somehow the story just can’t be so black and white.

Or can it?

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Why So Many FDA-regulated Flame-outs?

Posted by on Dec 7, 2015 in Uncategorized | 0 comments

image00We all know about the high cost of getting a product through FDA review. Readers in the pharma world may have experienced this first-hand. The researchers at Tufts, darlings of big Pharma researchers, say an average pioneer drug burns through $1.4 billion on its way to market ($2.06B if you count opportunity costs, 2013 data).


With so many smart people involved in investing so much money, the question has got to cross your mind – why so many post-launch flame-outs? Or put in the perspective of an investor, what are the indicators of those most likely to survive the first year of marketing?

After living through this exercise a few times, I’d like to share a few, simple anecdotes that might serve as an early warning system for when today’s market darling is at risk of becoming tomorrow’s penny stock.

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Biosimilars and FDA’s Reluctant Role in Pricing and Patient Access: How a scientific suffix makes the Agency a kingmaker

Posted by on Sep 7, 2015 in Uncategorized | 0 comments


FDA has announced interim plans for naming biosimilars. One take-away: FDA is willing to move beyond its comfort zone of science to tackle important issues that relate largely to market forces like pricing and patient access. The even-bigger lesson: the fine points in FDA’s rules may define the winners and losers as biosimilars emerge, so pay attention.

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