Big Pharma was handed a rare loss as Congressional leaders moved to pass the $1.3 trillion omnibus budget.
But Seattle-based Omeros Corp. (OMER) , a commercial stage biopharmaceutical company, came out fine. Its shares jumped 35% to $15.75 on Thursday after the company gained a victory in the budget process.
The budget also gave a glimpse of the ongoing finger pointing between the pharmaceutical industry and insurers over who bears the blame for higher drug prices.
Lobbyists for the pharmaceutical industry have been camped out on Capitol Hill this past month working legislators to change new policies tied to payment obligations attached to Medicare Part D, the so-called Donut Hole. The changes call for the financial liability covered by insurance carriers for prescription drugs not covered by Medicare to shrink, while that obligation rises for pharmaceutical companies. For drug makers, their share of discount rises from 50% to 70%. Lobbyists had been trying to push those numbers down to 60%.
PhRMA, the lobbying arm of the pharmaceutical industry, has been active in trying to reverse the changes, softening the ground up with this statement as soon as rough sketches of the budget began emerging. "Our industry has long supported efforts to make prescription drug coverage more affordable for Medicare Part D beneficiaries. Rather than prioritizing lowering seniors' out-of-pocket costs, this proposal provides a massive bailout for insurance companies and undermines their incentive to reduce Part D costs, an incentive that has worked well for more than a decade."
Instead PhRMA called for Congress to improve affordability and predictable price structures for seniors by adding an out-of-pocket limit and improving discount access for seniors at pharmacies, a lower cost alternative for the pharma industry.
Democrats are likely to make drug costs a campaign issue in the mid-term election in November, especially since the Trump administration has made a lot of noise about bringing costs down since taking office.
But an analysis from Pharmacy Benefit Consultants show that from January 2017 to this month, 20 drugs jumped 200% and another 39 drugs saw their price increase 100%. In all, 400 drugs had average wholesale price increases between 25% and 50%. Pfizer Inc. had a wealth of drugs increasing between 22% and 43%, according to the Pharmacy Benefit data. Pfizer's (PFE) Viagra erectile dysfunction drug increased 39.5%.
Omeros did well in the budget process. The company managed to get its cataract surgery drug Omidria and an extra two years of Medicare pass-through status, which will allow the company to recoup a higher reimbursement rate. The pass-through status expired last year and revenues in the first quarter reflected uncertainty in the market regarding Medicare payment. The company had been active in lobbying for the reinstatement.
The revenues derived from Omidria are critical for the company as it represents its sole commercial income. In 2016 revenues jumped by $28.2 million or 212.5% compared to 2015. Last year those revenues grew to $64.8 million from $41.4 million.
Omeros saw its shares respond as news of its pass-through status leaked out. The stock closed Wednesday at $11.64. On Thursday Omeros shares closed at $15.75.
Another winner in the budget battle were healthcare providers dealing with opioid abuse. The Trump administration has taken heat over its lack of action regarding opioid abuse. But the Department of Health and Human Services will see $3.6 billion of the $4.65 billion allocated to address the opioid epidemic, and the National Health Institutes for Health will receive $500 million for new research on opioid addiction as well as work on creating alternative non-opioid pain meds.