Top of the Funnel | Macro Data, Policy Position Monitor, Conference Notes.
PFE. At Wells Fargo this week, PFE focused on both COVID and RSV efforts. Regarding COVID they appear to be committed to the idea that it will be around for years, which is undoubtable true. The subtext, if you will, of their optimism is that governments and their people will remain alarmed enough to purchase more vaccinations.
That seems hard to believe, broadly. As the take-up rate for children under 5 stands at about 3.6% and for 5-11 year old at 8.7% (1st Dose) of the eligible population. There is no one more easily alarmed than a mother and right now they do not seem too concerned.
PFE and MRNA, which held an Investor Day this week, expect commercialization in 2023. The contracts and commitments the USG has made suggests a hand-off in 2Q 2023 when commercial plans are pricing. The revenue cadence will change as a result. Instead of large bulk purchases, orders will be placed early in the year and delivered in the fall.
MRNA is staking a lot on deploying the mRNA technology for other purposes while C-19 acts as a bridge. The technology has challenges as my wonderful discussion with Dr. Aditi Bhargava this week demonstrates. See below for more.
PMI. (HCA (+), THC (+), SGRY (+) (UNH (-), ANTM (-), HUM (-)) The Institute for Supply Management’s Purchasing Manager’s Index reported on Thursday at 53.5%, down 2.6% from July. However, the number remains strong despite COVID’s recession. Case-mix, a nice proxy for margin, increased 6%.
No changes to the position monitor found here.
CONGRESS
Continuing Resolution. (MRNA (-), PFE (-), BNTX (-)) The focus for the rest of the month will be on passage of a CR to keep the government operating past October 1. As we mentioned last week, the White House has requested $22.5B in additional COVID-response funding.
These additional monies would delay commercialization of vaccines and therapeutics. It is probably not likely to pass as proposed as the urgency of the pandemic has waned dramatically.
You can now go mask-less on the New York City subway.
The CR is quickly turning into a Christmas tree as it could be the last thing that happens before the November elections. However, talk of amendments for same sex marriage, Cannabis and a few other things with limited consensus probably argue for a clean CR.
THE WHITE HOUSE.
It Actually is Like the Flu. (PFE (-) MRNA (-), BNTX (-)) In a nicely choreographed moment, the White House’s C19 advisor, Dr. Ashish Jha announced that future iterations of the COVID vaccines would be handled similarly to flu shots. The FDA had been moving toward this point for about three months culminating with their approval of the bivalent version last week without clinical trials.
What it means is that future C19 vaccines, presumably without regard to platform, will be approved without clinical trials. The limited durability of the mRNA vaccines poses a problem for this new approval paradigm. Shots administered in Sept/Oct may become ineffective by January.
It would seem that reimbursement would be more commensurate with a flu shot as a result. The CMS Part B allowed amounts for typical flu shots run between $10-$30 for a normal multi-variant dosage.
MRNA, at their investor day, this week estimated the low end of reimbursement at $64 based on a CMS’s “value.” (the link they provided in support does not mention a rate).
On the other hand, the FDA is likely to accept minimal data for the full approval of the SARS-CoV-19 vaccines. Not that they would necessarily get more. PFE has a post-market requirement for subclinical data they have yet to produce.
Surrogate Policy. ((PFE (-), MRNA (-), BNTX (-)) Former CMS Administrator and Biden White House COVID advisor offered a plan for commercialization of COVID vaccines and therapeutics, published as an op-ed in The Atlantic. His plan calls for a price closer to the $20-$30 the USG has been paying throughout the pandemic and no co-pays.
While Slavitt has been out of the White House for over a year, you should treat his plan as White House policy under serious consideration. There is very likely to be a lot of bipartisan blow back if the government agrees to pay materially more than the current rate. Having a strategy to avoid that is a political priority.
Other Stuff.
The Food and Drug Administration approved Amylyx’s drug to treat ALS despite – and get used to this – poor data on efficacy. The company pledged to withdraw the drug voluntarily if it does not work and the FDA expressly reserved their rights to withdraw approval.
In the words of one observer, the FDA continues to be concerned about the public’s reaction if they do not approve a drug that ends up being effective. (How they would know without ongoing clinical work is a good follow-up question.)
Recent Events
The Failure of (Federal) Science with Dr. Tracy Beth Hoeg.
mRNA Technology: More Downside Than Upside, a Discussion with Dr. Aditi Bhargava.
Searchable calendar of weekly events and notes can be found here.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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