Royalty Pharma pays over $1B for Xtandi future sales

Modern Healthcare

  • New York-based Royalty Pharma has paid $1.14 billion for a portion of the future sales of Xtandi, a prostate cancer drug. University of California at Los Angeles researchers working at the university when the chemical compound was developed there, and the not-for-profit Howard Hughes Medical Institute will receive cash payments and potential additional payments based on future Xtandi sales. Xtandi has market exclusivity until September 2017, and its patents will expire in 2027. Xtandi is Medivation's sole product. The company reported annual revenue last year of $943.3 million.

  • The Medicare Payment Advisory Commission is wrapping up a report that outlines a unified payment system for post-acute-care settings. The new pay policy would change the way Medicare reimburses skilled-nursing facilities, home health agencies, inpatient rehabilitation facilities and long-term-care hospitals. It would establish rates according to specific patient conditions instead of by the type of post-acute-care setting that hosts the beneficiary. By June, MedPAC needs to send a report to the CMS and Congress that recommends the features of a unified payment system and the potential effects of moving to such a system. HHS will have until 2022 to develop an actual pay prototype, and MedPAC will need to weigh in via a report by 2023.

  • As enrollment in Medicare Part D swells, MedPAC is suggesting a suite of cost-cutting measures, including one that would shift more risk to health plans. Another idea would be to drop coverage of some antidepressants and immunosuppressants. MedPAC proposes reducing the individual reinsurance payments to plans from 80% to 20%, while increasing what a plan is paid upfront, and maintaining Medicare's overall 74.5% subsidy of basic benefits. MedPAC believes this would force plans to more diligently track their spending. Those suggestions might not get a warm welcome on Capitol Hill, since they have a history of being panned by advocates, beneficiaries and lawmakers.
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