Happy Monday, readers.
The Congressional Budget Office (CBO)—that scorekeeper of how federal policies will affect business, the government, and the public at large—has a preliminary report out on how House Speaker Nancy Pelosi’s proposed drug pricing legislation may affect the federal budget, public health programs, and the drug industry at large.
It’s a lot to parse through. Here’s one topline takeaway: The CBO estimates the bill (which would allow Medicare to negotiate lower prices with private companies for some of the most expensive drugs) would save the federal program $345 billion between 2023 and 2029.
Now, here’s the rub, and why pharmaceutical companies will be fighting tooth-and-nail agains the legislation—the preliminary analysis also predicts a major hit to drug firms’ bottom lines and innovation in the sector.
“Although CBO has not completed its analysis of the bill’s implications for new-drug development, its preliminary estimate is that a reduction in revenues over the next 10 years of $0.5 trillion to $1 trillion would lead to a reduction of 8 to 15 new drugs coming to market,” according to the preliminary analysis.
It’s election season, and there will likely be all sorts of political messaging around drug price reforms (an issue which, based on the rhetoric at least, should be widely bipartisan). But the question of effects on drug innovation will be a major one—and look for the industry to push back hard on such proposals.
Read on for the day’s news.
Sy Mukherjee, @the_sy_guy, sayak.mukherjee@fortune.com
DIGITAL HEALTH
Omada, Abbott partner up on type 2 diabetes project. Omada Health has teamed up with Abbott Laboratories to connect the former's digitally connected chronic disease platform with Abbott's continuous glucose monitoring devices for type 2 diabetes patients. "Partnering with Abbott to give individuals access to [Abbott's] FreeStyle Libre as part of the Omada program will deliver a unique combination of personalized human coaching and technology-enabled care to support those goals," said Omada CEO Sean Duffy in a statement. The goal here is to link the FreeStyle Libre continuous monitoring tech, which type 2 diabetes patients can use without having to prick their fingers, with Omada's real-time coaching recommendations on how to control blood sugar levels.
THE BIG PICTURE
E-cig related illnesses now have an official name. The 1,000-plus lung-illnesses (and dozens of associated deaths) stemming from vaping products now has a name: The Centers for Disease Control (CDC) is dubbing it "EVALI," which stands for "e-cigarette or vaping product use associate with lung illness." As of October 8, the EVALI count still stands at just about 1,299 lung injury cases and 26 deaths. (CDC)
REQUIRED READING
Meet Esther Duflo, the Second Woman Ever to Win the Nobel Prize in Economics, by Anne Sraders
Meet the Venture Capitalist Whose Childhood in Communist Bulgaria Led Her to Embrace Silicon Valley, by Polina Marinova
Why the Market for Sports Broadcast Deals Is Soaring Despite the NBA-China Standoff, by Eric J. Lyman
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