How President-elect Biden’s Cabinet Nominations May Impact Pharmacy This Year

Pharmacy Times^® interviewed Chad Landmon, the chair of intellectual property and FDA practice groups at Axinn, Veltrop & Harkrider, on the potential impact President-elect Joseph Biden’s cabinet nominations may have on the pharmacy field in 2021, as well as what it means for the rollout of further coronavirus disease 2019 (COVID-19) vaccination efforts.

Alana Hippensteele: So, Chad, Biden has named California Attorney General Xavier Becerra as his nominee for HHS Secretary. What does the nomination of Becerra to this position potentially mean going forward in relation to Becerra’s prior work and experience?

Chad Landmon: Sure, so thanks for having me today. I certainly appreciate it. I wish everybody a happy new year. Hopefully 2021 ends up being a little better than 2020.

Alana Hippensteele: Oh, yeah. Absolutely.

Chad Landmon: So, Attorney General Becerra, assuming he's confirmed as secretary of HHS, has a lot of background in fields relating to pharmacy in the drug field, certainly. So, he was a member of Congress, and he was a big proponent of the Affordable Care Act, and he was often very vocal in his defense of the Affordable Care Act.

When he became the attorney general of California, he both continued that, at times bringing cases against the Trump administration and intervening in cases that were challenging the Affordable Care Act. So, I think on that note, he will certainly continue in his role at HHS firming up his support for the Affordable Care Act, assuming President-elect Biden will continue down that path as well.

But Attorney General Becerra's background goes kind of even further than that as it relates to the drug industry. So, he's been very active as the attorney general going after issues that related to high drug prices, and we saw that in a couple different ways. Certainly, we saw that in certain investigations into murders and being pretty active on that front. But we also saw it in terms of him going after the settlements in the pharmaceutical patent cases that were deemed to be “pay for delay” settlements. What generally happens in these, and why people call them “pay for delay,” is there's essentially a settlement between the brand company who owns a patent and a generic pharmaceutical company who's seeking to get to market. The settlement usually provides some date in the future where the generic can come to the market, and why they call them “pay for delay” in a derogatory way is there are allegations in some of these settlements that there is some sort of payment or benefit that comes from the brand company to the generic company to delay the date where the generic company would otherwise agree to come to market.

So, as the attorney general in California, he was pretty active in investigating some of these settlements where he or his office found that there was some sort of payment made, or some sort of “pay for delay” arrangement. But then also, and you may have heard about this, about a year ago California passed a very aggressive statute relating to these settlement agreements going really beyond, or at least on its face, it purports to go beyond what the law has kind of said is an antitrust violation when you do have these settlement agreements, and really making the settlement agreements very difficult between brand companies and generic companies.

So that statute, after it was passed, lawsuits were filed to challenge that statute, particularly by AAM, which is an organization that represents the generic pharmaceutical industry in general. He was very aggressive in defending that lawsuit, so eventually the state of California has prevailed, [although] there may be further legal challenges in the future. But the reason I bring all that up is because I think what it means is, as the HHS secretary, that he will continue down that path of being aggressive in terms of looking at drug pricing and looking at ways to reduce drug pricing. and I think he'll be pretty active in that area.

Alana Hippensteele: Right, right.

Chad Landmon: And I guess one of the last things I wanted to mention: He's also advocated for or he did advocate for the government to use its marching rights with remdesivir. As you might know, remdesivir is one of the therapies for COVID, and there's this concept that the government at times, when government funding is used for developing certain pharmaceutical products, that the government can “march in,” and essentially take the patent rights from the company who has done the development work. As attorney general, he advocated that the government should do that for remdesivir to increase production and to get it out into the market to a greater extent. It's hard to know if the Biden administration will go down that route for remdesivir or frankly other therapies or the vaccines, but it's one of the issues that certainly the pharmaceutical industry, I know, is very focused on given how important patents are to promote the development of new drug products.

Alana Hippensteele: Yeah, absolutely. Given that Becerra recently co-signed a letter with other state AGs that was sent to outgoing HHS secretary Alex Azar on the need for greater enforcement of 340B drug pricing laws, what may the potential appointment of Xavier Becerra as HHS Secretary mean for the future of the 340B drug pricing enforcement during his tenure?

Chad Landmon: Yeah, I mean, it certainly indicates that he may be very aggressive as the secretary in terms of enforcing the 340B discount pricing and enforcing that upon companies. I mean the letter was with sent, as you mentioned, and actually HHS then actually came out and said that the companies that were trying to not continue to provide this discount pricing—It's kind of a little bit of a unique issue, this relates to discount pricing that's being extended to contract pharmacies for certain hospitals and organizations and what these companies felt like is that it was beyond the intent of 340B for so many contract pharmacies to be out there who are getting the discounted pricing. So, they started pulling out of these relationships with the contract pharmacies. We actually since—I think it was yesterday—saw that these companies filed lawsuits against HHS. Actually there were 3 different lawsuits filed in different states relating to HHS's—it wasn't really a ruling, it was basically a declaration by HHS of its intent in terms of the enforcement. But long story being short, for Attorney General Becerra, assuming he's confirmed as secretary, I think it indicates he will both continue the stated policy of Secretary Azar in the last week or so, and perhaps even be more aggressive in terms of enforcing the 340B pricing on companies. In part, this will flow into the bigger policy directive of the Biden administration. I don't believe that President-elect Biden or anybody from his inner struggle have yet commented on the recent 340B issue, but I do think this indicates that, or the letter, that was sent indicates that a new Secretary Becerra will likely continue to be pretty aggressive on that front.

Alana Hippensteele: Right, right. Are there any other Biden cabinet nominations, forthcoming or otherwise, you see having a significant impact on pharmacy this year?

Chad Landmon: Yeah, so it'll definitely be interesting. So, we do know, on the Attorney General spot, Judge Merrick Garland has been put forward as a nominee. Assuming he's confirmed, Judge Garland had been on the bench for a long time. It's hard to know how he will act in terms of the attorney general, given that he's been on the bench not really in the DAG role or a role like that for a while. But I think his views in terms of particularly on the antitrust side, as we get to mergers between pharmacy groups, payer groups, whatever mergers in terms of how aggressive he's going to be on the antitrust side, will certainly have an impact on pharmacies in the pharmaceutical industry.

Also, how aggressive that he and the office will be in terms of the different investigations that go on into the industry, I mean we've seen a lot of lawsuits over the last down 10 plus years alleging price fixing or collusion in the pharmaceutical industry, and it'll be interesting to see how aggressive he'll be in that spot as the attorney general.

After that, I think there's a number of appointments that aren't cabinet appointments, but that'll be pretty important. Certainly, FDA commissioner will have a huge impact on the future direction of the FDA, and where things are going. We don't yet have a nominee for that. It does appear that a lot of the COVID-related directives will kind of be operated out of the White House instead of through HHS or FDA, at least coordinated through the White House, so as we see how that plays out too, that'll be interesting in terms of its impact on the industry.

Alana Hippensteele: Yeah, yeah. How might Biden’s nominee for HHS Secretary or future nominee for FDA Commissioner be able to support further COVID-19 vaccination plans, and what might that look like? I understand that you're saying that potentially it might be less focused on the HHS, do you see that having kind of a significant impact on how things roll out?

Chad Landmon: So not really except I think there will be an increased involvement from the White House and the inner circle at the White House. I mean frankly, a lot of that had been happening under the Trump administration. Operation Warp Speed was kind of taken outside of the realm of FDA and brought in through the White House. I mean HHS certainly played a large role in that as well, but I do think that the FDA and HHS will continue to play a large role, and I didn't mean to say they hadn't been, certainly they have been. Even though the coordination may come directly out of the White House, ultimately, in terms of getting things approved, getting things authorized, you know a lot of things we know have been done through these emergency use authorizations. I think the new head of FDA will have a big impact on that. I mean the staff at FDA is largely going to be the same, and frankly a lot of those people have been there for quite some time and are very good at what they do, and I think we'll see most of them stay into the new administration, but certainly you can see kind of increased directives coming out from the administration in terms of the rollout of vaccines, and probably increased guidance or even directives to the states in terms of how they get the vaccines into the population.

Alana Hippensteele: Right, right. Do you have any closing thoughts?

Chad Landmon: I guess just in closing, it's always interesting when you have a new presidential administration step in. They're coming into, obviously, very difficult and crazy times. I think, in terms of pharmaceutical industry, I think COVID is going to continue to dominate, certainly the next the and maybe much longer. I think it'll be very interesting to see kind of how the world moves forward, but also how the pharmaceutical industry moves forward, and how the FDA and HHS move forward post-COVID. I think we've learned a lot, I think we've seen how FDA and HHS and the industry, frankly, can coordinate to a much better extent, and it'll be interesting to see how those are brought forward particularly when we have new leadership stepping into a lot of the key roles.

Alana Hippensteele: Yeah, absolutely.