$50 Billion Pharma Plant Built in Virginia?

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Transcript

SPEAKER_00: 0:00

Hello and welcome to Postscripts, the podcast exploring what happens after the first prescription. We cover the latest innovations in patient access, support, digital tools, HCP engagement, and pharma marketing that drive better outcomes for patients, we hope. This podcast is for informational purposes only and should not constitute any medical advice or influence any clinical decision making. Patients should always consult their health care professionals. Welcome to the podcast. My name is Brian Carr. I'm the Senior Vice President of Marketing at Metasafe. Although any of my opinions expressed here are my own and not necessarily those of Metasafe, its digital solutions, or its partners. So one thing's happening, we're just seeing the U.S. pharmaceutical landscape really on the edge of a massive transformation, potentially. The challenge of the U.S. administration's proposal to tie U.S. drug prices to what they call the most favored nation pricing benchmark really has rattled some boardrooms across the globe. For example, a concept where U.S. drug prices would be pegged to the lowest price paid by all developed countries could slash U.S. pricing power significantly, and when the largest, most profitable pharma market in the world rethinks its pricing standards, there are some ripple effects that could be unavoidable. So today we're delving into this, how this shift in drug pricing regulation could be prompting some pharmaceutical giants to rethink not only their pricing, but also manufacturing, and explore how it could reshape investments in domestic biopharma facilities, supply chain strategy, and patient access programs. So for those of you, the most favored nation rule is a pricing model where the federal policy mandates Medicare, for example, pays no more for drugs than the lowest price charge for that drug and other advanced nations. So in essence, if Germany, the UK, or France gets a better deal, so should the US. While this proposal intends to really alleviate the burden on patients and taxpayers, it also introduces tremendous uncertainty in to pricing forecasts for the pharma companies. Uncertainty that pharma companies, they don't take it lightly, especially when planning billion dollar capital investments and forecasting the efficacies and the financials on medications for, you know, 10, 20, 30 years in the future. So when you look at, you know, for the life of the patent. So according to the Kaiser Foundation, U.S. prescription drug spending, of course, reached about$378 billion a few years back with Medicare Part D really costs represent probably a large portion of that, right? So a RAND Corporation study also found in a few years back that the US prescription drug prices on average are two and a half times higher than those in 32 comparable nations. So there is this natural financial pressure to reduce costs. That's understandable. But the challenge is, will this pressure spur innovation and investment in the US? or send manufacturers searching for escape routes outside the U.S.? Well, we've seen some answers already. Surprisingly, some of the early signs point toward deeper U.S. investment. We're seeing companies like AstraZeneca have already announced they're doing game-changing domestic expansions. They are committing to$50 billion in U.S. operations and new spending, encompassing R&D, manufacturing, and supply chain expansion. So this is one of the larger pharma infrastructure investments in recent history. The CEO said, quote, the policy environment may be changing, but bringing production closer to where care happens also allows us to ensure supply continuity, lower logistic risk, and serve American patients more directly. So they're not alone, AstraZeneca, Pfizer, and Moderna have also announced intentions to expand their biomanufacturing footprint in the U.S. in recent quarters, and about 10 other biopharma firms have pledged over$120 billion in new or expanded U.S. operations since Q2 of last year, and that's according to BiopharmaDive. So why would companies commit to billing here while also facing pricing headwinds? Well, made in the UXA equals some access and agility for them, right? So it's just one variable to be the lowest price and have that most favored nation pricing. It's just one variable in a more strategic equation that can involve tax policy, trade tariffs, supply chain resilience, and patient-centric business models. Think about it. If you've got tariff pressures with an increase in tariff on imported pharma components, it does make sense to produce domestically, could be a tax savings and, you know, a little bit more predictable cost structures, right? If there's no tariff conversations going on that you have very little influence on. Also some supply chain redundancy, right? One thing we did see with COVID-19 was it highlighted how fragile some of those offshore sourcing can be. We sort of remember that with all the car battery challenges and the car electronics. So domestic production ensures faster delivery, especially during any specific health crises, right? And let's be clear, you know, political favor. Companies that invest in the U.S. jobs and infrastructure may gain, you know, goodwill and regulatory goodwill or incentives during policy shifts, right? You could see, theoretically, we see this with tariffs, that each country is doing individual tariff deals. Why not extrapolate that to each pharma company is doing individual pricing deals based on their portfolio and what they're committing to do in the U.S.?

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And what you also see is patient-centric metrics are really going to come to the fore, right? So if there's faster access to the medication, a simplified distribution, and better patient support, where it's easier, you can have supply and demand really co-located, but you're also going to see a lot more, I think, emphasis in how are the outcomes, right, in remote monitoring. And to show proof of impact can certainly have impact on pricing paid for Medicare models, right? All this ladders up to what pharma companies really consider agility and increasingly valuable currency when they look at today's landscape of value-based care price scrutiny, right? So they're looking for safe havens where they know they can control costs the best and they can be forecasted going forward without as much, you know, maybe interference or other variables where they can't control, right? So what's this mean for patient access and affordability? Well, you know, for patient access teams, this is great because the move towards domestic production could create new challenges but also new opportunities right short-term price controls could limit rebate structures that fund company assistance or hub services but longer-term domestic manufacturing could in fact lower some of the overhead streamline some logistics and allow pharma to really reallocate resources to patient support programs so there's some considerations there right so that you might see some evolution in the hub model where faster delivery from domestic production could eliminate some steps in the reimbursement or activation work workflows. Pricing alignment. Most favored nation could prompt a national realignment of pricing that better supports transparent models tied to outcomes. And collaboration with payers. You may see a greater emphasis that access programs that deliver treatment efficacy faster could secure broader coverage, particularly in tighter priced environments. So that's where companies like Medisave Full Disclosure could also play a critical role here with patients getting quicker access to therapies because of the local production. The focus could shift to supporting adherence, behavior change, real-time feedback loops that widen the impact of price-controlled drugs and protect market share, frankly. So what's some of the marketing strategies you're likely to see come out of the most favored nation era? Well, brand markers are going to be strategically challenged, right? How do you position a brand when drug uniformity is becoming the norm, right? If all, Diabetes and insulin medications, right, have to be priced the same. How do you really strategically challenge to position one brand over the other, right? So you may see MFN flattening the market on price, which then shifts brand advantage to experience, trust, patient support services. So if they can show two things. One is, well, with this medication, even though it's maybe the same price, we're seeing better outcome, impact, and our patients feel supported more. That's where you're going to see some of those differentiators come to the market if price is going to be really controlled, basically. So you may see that support pivot to support tools a little bit more, right? You're going to see, you know, digital companions, adherence platforms, proactive CRM campaigns to really not only capture the mind share of HCPs, but also consumer loyalty. You might see greater partnership between the commercial and patient support teams because they're both going to be tied to patient outcomes rather just promotional return on investment. So if you look at this value value-focused landscape. And again, if pricing is pretty much consistent across the board, you're going to look for what's the best value for those prices, which medications are giving you the best outcome, which have the best patient ratings, right? And the patients feel the most supported with other value adds that are put into the equation. So it's just not about the molecule anymore. It's about the journey that exactly the story that, you know, postscript platforms and innovative tools, like Medisafe and others, help bring to life by integrating those medication routines into daily behavior in smarter, personalized ways. So when you look ahead, if there's constraint, how do you innovate? So what's unfolding is not just a political maneuver or price policy. it could be a realignment of the commercial pricing model for pharma, right? So companies used to chase, they might be chasing blockbuster revenues, but they may face a future where, you know what, efficacy, efficiency, trust, and access kind of define the winners, right? So if this becomes a cemented pricing policy, You've got to expect more of manufacturers who want to justify innovation spend with production dividends, right? So improving margins with domestic agility, faster time to therapy, better patient support, and enhanced outcome metrics. So this really does offer brands a little bit of a tipping point. They can enhance collaboration between internal teams, breaking down any of those silos between market access, supply chain, digital brand strategy, committing to deep integration of digital tools, right, into the therapeutic journey so they can measure those ratings and take action on what's happening with, you know, market access and support and adoption by patients and general overall outcomes. And, you know, really align with health systems and government partners to really create that value frameworks that respond to the real world and not just containment directors that have about price, right? So the challenge is going to be, how do we show more value for the same price? And outcomes are going well. Hey, final takeaway, the model is more than just a price reset when it comes to the four. It's kind of a philosophical one. America's pharma companies, they're adjusting to price tables, but they can be rethinking presence, partnerships, proximity to the patient, right? So if we look at AstraZeneca's$50 billion investment that they're working on, it's going to be a production facility in Virginia, I believe. And, you know, other farmer leaders are going to follow. So we may be quietly witnessing the renaissance in U.S.-based manufacturing. Now, that takes time, and it's not just about jobs, but it's about patient agility, supply security, and drug delivery. You know, one of the things that came across in the executive order from the US administration was, yeah, not only would there need to be MFN status on pricing, but another bullet point there that was kind of underreported was the administration's commitment to the pharma companies that if you are setting up a new production facility in the United States, that the administration is committing that their agencies, particularly FDA and EPA, will streamline approvals to get those production facilities online so that could be something really has been reported that much but you know the whole five to ten years to build a plant may actually get down to the two to three years and that's what they were talking about trying to do it Stay tuned. The first deadline for pricing technically was September 29, 2025. As we approach that, obviously we'll be tracking these stories on a daily basis. So thank you so much for joining us on Postscripts. If you found this conversation valuable, please follow and subscribe for more insights at the intersection of pharma technology and patient impact. Until next time, my name is Brian. Keep looking forward. The real work begins after the script is written.