New pharma CEOs in the hot seat

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A road test for fresh pharma CEOs

A lot can change in five years — including the leadership of the three major pharmaceutical companies that will be testifying before Sen. Bernie Sanders’ HELP Committee today.

When the Senate Finance Committee called pharma CEOs to testify back in 2019, Merck was then represented by media darling Ken Frazier and Bristol Myers Squibb by Giovanni Caforio, both of whom have since stepped down. J&J’s CEO didn’t attend the hearing, but former chief Alex Gorsky has since departed the company as well.

Today’s hearing will be a crucial test for a new generation of leaders: Joaquin Duato at J&J, Robert Davis at Merck, and Chris Boerner at BMS. The executives did their very best to avoid testifying, but acquiesced when they were looking down the barrel of a subpoena. The contentious hearing will be a proving ground as to how they handle hostile scrutiny of their companies’ pricing practices — even if they supposedly aren’t drug pricing experts.

Look for Duato to play up his 13 years working for J&J in Europe, and his dual citizenship in Spain, to argue that he well understands the differences in the European and American markets, per advance remarks shared with STAT. Merck’s CEO plans to argue that lowering list prices won’t fix affordability problems. Both companies plan to highlight their spending on research and development.

Boerner didn’t share remarks in advance, but on a recent earnings call, he had surprisingly nice things to say about the law that empowered Medicare to negotiate drug prices, saying its cost-sharing protections could lead more Medicare patients to take BMS medicines. He downplayed concerns about lower prices spilling into the commercial market. We’ll have more this morning, so stay tuned.

Biden administration allows key vaccine advisory panel to atrophy

During the pandemic, the public anxiously awaited advice from the Advisory Committee on Immunization Practices on how Covid-19 vaccines should be administered. Now, it has less than half of its normal number of members, and no chairperson, my colleague Helen Branswell reports. Four of seven remaining members are slated to end their tenure at the end of June.

The snail’s pace of new appointments has some observers worried about whether outgoing members will be replaced before the presidential election, and how an unprecedented level of inexperience could affect the panel.

The CDC said it submitted nominations for new members. Ultimately HHS Secretary Xavier Becerra has to sign off on the nominees. Read Helen’s full findings here.

CMS spells out AI warning to insurers

Medicare officials are making themselves as clear as they can that Medicare Advantage plans have to put individual patient circumstances over algorithms, my colleagues Casey Ross and Bob Herman report.

They got a copy of a memo to MA plans sent this week that spells out that algorithms that determine coverage based on large data sets instead of a patient’s clinical circumstances aren’t compliant with federal rules.

Those standards are at odds with how some insurers have been using AI in recent years (see their investigation here). The Senate Finance Committee is holding a hearing on related issues today at 10 a.m. too, titled: “Artificial Intelligence and Health Care: Promise and Pitfalls.”

The other CEO testifying before Congress

Another CEO in the biopharma world will have a moment to shine in front of Congress next week — but it won’t be on Capitol Hill.

Ginkgo Bioworks CEO Jason Kelly will testify before the House Select Committee on the Chinese Communist Party on Tuesday at a field hearing in Boston, the committee announced yesterday. The topic will be how the bioeconomy is a national security issue, which has been a growing concern for some lawmakers who are trying to restrict the U.S. operations of the Chinese genomic sequencing company BGI Group.

If you’re looking to prep for the hearing, you should read the examination my colleagues Jason Mast and Matt Herper wrote about Kelly’s quest to convince drug makers of the company’s value.

What we’re reading

• House panel passes key PBM reform for sliver of commercial market, STAT
• Eli Lilly, Minnesota reach settlement in insulin price case, Bloomberg Law
• First Opinion: The Philips CPAP nightmare exposes shortcomings in medical device regulation, STAT
• GoFundMe is a health-care utility now, The Atlantic