In this week’s edition of InnovationRx, we look at the havoc of generic drug pricing, companies looking to cash in on the coming peptide bonanza, the ongoing cyclosporiasis epidemic, Tempus’ acquisition of a cancer testing company and more. To get it in your inbox, register here.
PTrump resident he said that it will impose a 100% tariff on all generic drugs from August 2028 – rising to 200% next year.
About 90% of prescriptions are filled by generic drugs, which are largely manufactured overseas, where the cost of producing these cheap drugs is cheaper. India, for example, is a major hub for generics: nearly half of the generics prescribed in the US are made there.
The effort to force the production of low-cost generic drugs back to the US looks likely to fail, cost increase for cash-strapped patients.”Generic drug makers don’t have the operational flexibility of big name pharma companies,” says Rajiv Leventhal, an analyst at Emarketer. Forbes. “Making a two-year shift of manufacturing to the US is a huge, if not impossible, undertaking.”
There were almost no details on the policy as of Wednesday morning. Trump made the announcement on his own social media platform, Truth Social, and did not release any additional details, let alone an official executive order. This makes it hard to say whether the tariffs will actually happen.
As Leventhal says: “The deeper this government gets into its tenure, the less certain it is whether the policy will be implemented as proposed, how it will be enforced, or whether it will ultimately survive.”
Peptides may soon become legal. These companies are ready to cash in
Shaun Noorian, founder and CEO of Empower Pharmacy;
Houston Chronicle via Getty Images
When the FDA table which is considering whether to recommend the legal production of seven peptides meets from Thursday, Shaun Noorian will be on the Maryland campus in person. “I wouldn’t miss it for the world,” says Noorian, founder and CEO of Houston-based Empower Pharmacy, one of the nation’s largest compounding pharmacies. Forbes. “The who’s who of the peptide space will be there.”
Hundreds more are expected to enter the room as well, including composites, telehealth founders and longevity influencers, flying in for the event. “It’s going to be a circus,” says Scott Brunner, CEO of the Alliance for Pharmacy Compounding, the industry’s trade group. “Everyone and their brother is coming.”
While these peptides are not currently legal to produce for anything other than “research purposes,” that hasn’t stopped a thriving gray market from exploiting this loophole. There is little scientific data on their safety and effectiveness, and the many sketchy sellers who distribute them operate unsupervised. However, the illegal market for peptides could be worth around $3 billion.
And that has many in the compounding and telehealth industries salivating—and preparing—for the eventuality. “We’d love to make them and we’re getting ready to,” says Mike Walker, co-founder and president of Strive Pharmacy, another major compounder. “We’re just waiting for the green light from the FDA.”
Read more here.
Identifying the cause of the cyclosporiasis outbreak
Public health officials are scrambling to identify the cause of the cyclosporiasis outbreak, which has sickened thousands of people – including 308 hospitalized – in at least five states. Federal regulators have confirmed more than 4,000 cases, with more than 7,400 more suspected. In Michigan alone, more than 7,000 have contracted the nasty foodborne illness, which causes severe diarrhea and comes from exposure to a pest in contaminated water used for washing or watering crops.
FDA officials suspect iceberg lettuce imported from Mexico by agricultural giant Taylor Farms and supplied to Taco Bell is responsible for the current outbreak. Both companies have voluntarily reminded the lettuce, but confusion ensued as follow-up testing showed it was a false positives. However, the FDA clarified in X that Taylor Farms lettuce is likely the cause. “Don’t eat souvenir lettuce from Taylor Farms de Mexico,” the agency wrote in an update.
Bruce Taylor, a third-generation Salinas, California lettuce grower, founded Taylor Farms in 1995 and built it into $7 billion agricultural behemoth with more than 25,000 employees and 30 processing facilities. Last week, there was an online uproar over his $1 million donation to a pro-Trump super PAC, as well as executive meetings at the White House and with FDA officials on Thursday.
The outbreak is just the latest foodborne illness to hit the US this year. The CDC has tracked several such outbreaks this year, including one E. coli flare up associated with frozen blueberries, a salmonella outbreak who has treated more than 100 people, a case of listeria caused by cheese and infant botulism pouches attached to powdered formula.
The Trump administration has scaled back monitoring of foodborne illnesses, including cyclosporiasis, slowing the government’s response. Overall, the CDC has lost more than a quarter of its total staff by 2025, while the director’s position has been vacant for nearly 11 months.
On Tuesday, HHS Secretary Robert F. Kennedy claimed to have the outbreak “under control” and dismissed criticism of the administration’s funding cuts as “null.”
Offer of the week
Health tech company Tempus ($9 billion market) agreed to buy Cancer test maker Personalis for about $1.5 billion. The Personalis minimal residual disease test detects small amounts of tumor DNA to monitor how well a cancer treatment is working. Eric Levkovsky, the billionaire founder of Groupon, launched Chicago-based Tempus in 2015.
The acquisition expands an existing partnership between the two companies that began in 2023. Personalis’ liquid biopsy is part of a growing market for minimal residual disease testing, which companies have said is a $20 billion opportunity. On a call to discuss the deal, Lewkowski, who is also the company’s CEO, said that once the cancer tests are validated they can scale up quickly. “You go from zero revenue on some of these tests significant revenue“, he said.
Analysts at Jefferies were more cautious, noting that it was a significant shift from executives’ statements in May that there was no advantage to an acquisition over a continued partnership (OK?). “We wonder if the rationale is intended to offset a slowdown in the core diagnostics industry,” they wrote in a research note on Monday. Investors seem to agree: Tempus stock is down 7% since the deal was announced (through Tuesday’s close) and Personalis stock is down 13%.
What We Read
He appears to have been a most wanted fugitive he was secretly working as a biotech executive for years.
Billionaire Sanford Health backer Denny Sanford; died at the age of 90.
Ozempic drugmaker Novo Nordisk sued rival GLP-1 maker Eli Lilly in federal court in New Jersey on Tuesday, accusing the company of using “deliberately selected outdated studies” to mislead consumers.
The Trump administration is withholding of $1 billion on Medicaid funds from California and Minnesota, reporting signs of fraud.
Hospitals are increasingly worried increasing cases of a ‘nightmare’ drug-resistant bacterial infection with a high mortality rate.
