Trump's Medicaid freeze, Ozempic for kidney disease, and 23andMe for sale: Pharma news roundup
President Donald Trump's move to freeze federal funding for a massive number of government programs impacted Medicaid payment systems across the country, briefly locking 72 million Americans out of their health insurance Tuesday. Novo Nordisk said this week that its diabetes drug Ozempic was approved by the Food and Drug Administration (FDA) as the first GLP-1 treatment for chronic kidney disease. 23andMe (ME), the company that popularized consumer genetic testing, announced this week that it is once again exploring 'strategic alternatives,' which could include a potential sale of the company.
Check out those stories and more pharmaceutical news highlights from this week.
The U.S. Centers for Medicare and Medicaid Services (CMS) said on Wednesday that it would seek 'greater transparency' in drug price negotiations under President Donald Trump's administration. The statement follows criticism from the pharmaceutical industry regarding the program. 'As the second cycle begins under the Trump Administration, CMS is committed to incorporating lessons learned to date from the program and to considering opportunities to bring greater transparency in the Negotiation Program,' the agency said in a statement.
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23andMe, the company that popularized consumer genetic testing, announced Tuesday that it is once again exploring 'strategic alternatives,' which could include a potential sale of the company or a restructuring. In a press release on Tuesday, the company said it needs additional liquidity to fund its operations and that 'management has determined that there is substantial doubt about the Company's ability to continue as a going concern.'
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Novo Nordisk (NVO) announced today that its blockbuster drug Ozempic was approved by the Food and Drug Administration (FDA) as the first GLP-1 treatment for chronic kidney disease among people with type 2 diabetes. The popular diabetes drug can now be used to reduce the risk of kidney disease worsening, kidney failure, and death due to heart disease in adults with type 2 diabetes and chronic kidney disease.
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President Donald Trump's move to freeze federal funding for a massive number of government programs seems to have impacted Medicaid payment systems across the country, potentially locking 72 million Americans out of their health insurance. Several lawmakers took to social media on Tuesday afternoon to confirm that their state's Medicaid payment systems have been shut off. 'The White House is aware of the Medicaid website portal outage. We have confirmed no payments have been affected — they are still being processed and sent,' White House spokesperson Karoline Leavitt wrote in a post on X on Tuesday.
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Robert F. Kennedy Jr., President Donald Trump's nominee for health secretary, reportedly expressed openness to seizing drug patents of high-priced drugs as a way to lower prices. Politico reports that Kennedy indicated during a closed-door meeting with Senate Finance Committee staffers that he would consider adopting a proposal championed by progressive lawmakers like Senators Elizabeth Warren and Bernie Sanders. The outlet cited three unnamed sources familiar with the exchange.
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The millennial-targeted telehealth company Hims & Hers (HIMS) is spending big bucks on its first-ever Super Bowl commercial to hawk its affordable weight-loss treatments. With Super Bowl ads reportedly costing about $7 million for a 30-second spot this year, Hims & Hers likely spent about $14 million for its one-minute commercial.
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Pharmaceutical companies have already raised the price of over 800 brand-name prescription drugs this year. The increases apply to list prices before accounting for insurance, rebates to pharmacy benefit managers, or other discounts. This year's increases reflect a significant increase from Dec. 29 of last year, when drugmakers had shared plans to raise prices on just over 140 brands. More price hikes are also expected to be announced through the end of January, historically the busiest month for drugmakers to make increases.
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LinkedIn (MSFT) co-founder and venture capitalist Reid Hoffman on Monday launched an AI startup aimed at discovering new treatments for cancer. Manas AI will use a proprietary AI-driven platform to help speed up the drug discovery process, from identifying potential drug candidates with 'paradigm-shifting speed and accuracy' all the way to clinical trials, Hoffman said in a press release. The company is initially focusing on treatments for breast cancer, prostate cancer, and lymphoma. Eventually, it intends to target other autoimmune diseases and rare conditions.
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The cheap fat jabs sending big pharma into a frenzy
For many Americans who tuned in to watch the Super Bowl earlier this year, it was a surprise to find themselves fat-shamed during the ad break. 'Obesity is America's deadliest epidemic,' a voiceover said, as images of wobbling bellies, greasy burgers and giant apple pies flashed across TV screens. The Super Bowl's 127m-strong audience, who were tucking into an estimated 1.5bn chicken wings during the event, were warned that 'obesity leads to half a million deaths each year'. But Hims and Hers, the US online medicines company behind the ad, said people should not blame themselves. Instead, its advert claimed that 'the system' was keeping them 'sick and stuck', adding that 'there are medications that work, but they're priced for profits, not patients'. To the relief of viewers, Hims and Hers offered a 'life-changing' solution. Rather than paying hundreds of dollars each month for well-known, branded weight-loss jabs such as Wegovy, households could instead try Hims and Hers' cheaper, replica versions. 'This is the future of healthcare,' it argued. 'Join us in the fight for a healthier America.' However, for the likes of Danish obesity drug maker Novo Nordisk and US pharma rival Eli Lilly, which have claimed the rise of copycat jabs poses potential health risks, such claims have become a serious headache. Over the past few decades, both businesses have poured billions of dollars into obesity drug research – recently yielding blockbuster drugs Wegovy and Mounjaro. The rapid uptake of such drugs has prompted a surge in revenues for big pharma. But bosses are now increasingly worried that demand among American patients has been dented by a cluster of smaller, copycat companies. According to industry estimates from November, around a quarter of the 8m Americans on weight-loss drugs were taking knock-off replica versions. These medicines, known as 'compound' drugs, were priced at around $200 ($148) a month, compared to over $1,300 for some branded versions. Barclays analyst Emily Field says the boom in copycat weight-loss drugs has been a 'unique phenomenon' in the US, sparking an inevitable surge in legal claims that has drawn the attention of regulators. So-called compound drugs are essentially custom-made medicines created by pharmacies using the same active ingredients of patented drugs. Historically, compounding pharmacies create custom versions of medicines if they need to personalise them for patients. For example, if someone is unable to take a standard oral medicine in pill form, or is allergic to an ingredient in an existing medicine. Compounding pharmacies are also typically blocked from mass-producing their drugs. For weight-loss drugs, though, it has been a different story. After the US Food and Drug Administration (FDA) put semaglutide – marketed as the blockbuster obesity drug Wegovy – and tirzepatide – the same for Eli Lilly's Mounjaro – on the shortage list in 2022, compounders were allowed to ramp up production. 'It was almost like these companies found a loophole where they were allowed to do this on a mass scale,' says Field. The impact has been significant. At the start of this year, Novo Nordisk estimated that the copycat drugs accounted for around a third of the entire weight-loss market. That is despite warnings from the FDA about the health risks posed by compounded medicines, which do not have to be approved by the regulator. Beth, from Washington, says she was tempted by online ads for the compound medicines, having struggled with her weight since the pandemic. For her, the drugs helped her at a time when it seemed impossible to lose weight or stick to a diet. She dropped 30lbs over a few months of taking a compound weight-loss medicine. Others say they had little choice but to opt for compound versions, given that the branded medicines were too expensive and not covered by their health insurance. However, the situation is rapidly changing. Last month, the FDA banned mass production of copycat weight-loss treatments that use semaglutide, the ingredient in Novo Nordisk's Wegovy. It also removed tirzepatide from its shortage list last October. Novo Nordisk said the law has now made things clearer. 'Moving forward, any compounder that mass produces or sells knock-off drugs is breaking the law and compromising patient safety,' a spokesman said. Eli Lilly says the products 'pose potentially life-threatening health risks', adding: 'Patients shouldn't be exposed to risky, unapproved products when regulator-approved medicines are available.' Online medicines firms, also known as telehealth businesses, are now racing to find a way to continue getting cheaper, personalised replica drugs out to patients. Noom, a rival to Hims and Hers, has suggested it will still be able to sell compounded weight-loss drugs to patients under an exception set aside for 'personalised' medicines. Hims and Hers, meanwhile, has already struck a new deal with Novo to offer its branded obesity drug to patients. The US firm also said this month it was exploring expansion in the UK, after acquiring European rival Zava. Andrew Dudum, the Hims and Hers chief, suggested there could be 'expansive options in obesity that include that type of personalisation, or similar types', telling the Financial Times that it could sell replica obesity medicines in the UK and Europe. David Meinertz, the boss of Zava, agrees that there are opportunities for the business to grow outside of America. 'There's clearly the experience and expertise that Hims and Hers have built up in the US,' he says. 'But then we have things like the regulatory knowledge here in Zava, and this is where we combine our experiences and spearhead this effort.' Still, the situation in the UK is very different to the US. Here, the compounding pharmacy market is much smaller, with pharmacies able to prepare personalised medicines for patients if it is prescribed by a doctor. Elizabeth Philp, the co-founder of compounding pharmacy Roseway Labs, says there could be a role for more personalisation of medicines. 'The NHS will say wasted medication is one of their top issues – people who try medication, put it in their bathroom cupboard and never use it again because it didn't suit them,' she says. 'We can really help with that.' However, drug insiders argue it would be a 'very bad idea' if the UK started to think about bringing in cheaper compound medicines for weight loss. 'The real drugs are getting very cheap at volumes,' says one senior drug leader. 'Supply is not an issue.' It will be a message that Novo and Eli Lilly will seek to drum home as they seek to prevent smaller rivals from selling cheaper weight-loss medicines to patients. Still, the effects of this debate are already being felt by many in the US battling to lose weight. 'I cannot afford the full price at this time,' says Beth. 'I think it's awful that people are losing access to this medication due to finances or compounded meds going away. 'These drugs are literally life-changing.'
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