Forbes Healthcare Summit Sparks Conversations About Pricing, Innovation in Pharma
The idea of throwing Big Pharma under the bus in order to protect innovative biotech companies sparked a robust conversation at the seventh annual Forbes Healthcare Summit.
Robert Nelson, a partner with noted venture capital firm Arch Venture Partners, posed the question about separating innovative biotech companies from the big pharmaceuticals in order to protect the finances used in innovative therapies.
Jeffrey Leiden, head of cystic fibrosis drugmaker Vertex Pharmaceuticals, said it’s important to look across the entire “three trillion dollar system” and asking the tough questions about value and dollars. In a video and article posted on the Forbes website, Leiden said it’s important to ask questions about where value is being created, and investing in that. Where there is little value, then that raises the question of whether to invest only a little money, or no money at all, Leiden said.
Alnylam’s John Maranganore pointed to Novartis as a large pharma company that is making strides to become more innovative. Over the last several weeks, Novartis has made significant investments in multiple assets and companies, while culling one-fifth of its research programs. Novartis Chief Executive Officer Vas Narasimhan has been actively reshaping the company to focus on therapies that will drive revenue well into the future, such as gene therapy and radiopharmaceuticals.
“They have to do it. They have no choice… that’s the only way for them to survive,” Maranganore said.
Sarepta Therapeutics CEO Doug Ingram noted that society at large is calling for investments in innovative research largely because healthcare costs have “stressed the system” and have outgrown the gross domestic product of some governments.
“That is a real issue. To ignore it is to be ignorant, myopic or self-interested,” Ingram said during the event.
However, Ingram noted that there is some danger in innovation. Pointing at drugs that serve a small patient population, Ingram said that “going after the next therapy because it looks expensive” can put pressure on innovation.
“Ironically you’re doing exactly what you don’t want to do. You’re putting pressure on innovation. You’re asking investors to go invest in direct-to-consumer advertising and old drugs,” Ingram said.
Another point that was raised during the summit was what the future neighborhood drugstore may look like. Larry Murlow, CEO of CVS, said that the retail space of the neighborhood stores will likely be dedicated to other services in the future as it moves to change the healthcare model. Murlow suggested that the future drugstore won’t necessarily be seen as a retail store where one can buy medication, but as a “healthcare destination,” a place where they can access the resources and services they need to maintain good health.
As could be expected, pricing of drugs also took center stage during the Forbes summit. Billionaire hedge fund manager John D. Arnold, who has become an outspoken critic of drug prices, was also a guest at the summit. During his conversation with Matthew Herper, Forbes healthcare reporter, Arnold pointed to the failures of Congress to act on drug pricing.
“We live in a country where policy and politics are linked. And in healthcare policy, it’s joined at the hip to politics,” Arnold said.
Arnold noted that the pharma industry has spent about $1 billion on lobbying politicians.
Jim Greenwood, head of Biotechnology Innovation Organization (BIO), responded that the industry wants Congress and other lawmakers to focus on the patient’s experience, which could change the reality of what a patient has to pay out of pocket. He said that’s out-of-pocket expense isn’t the only issue surrounding the very complicated pricing formula. Greenwood said no patient should ever do without medicine.
Arnold said the pricing points raised by Greenwood is a sign of market failure.
“I’m looking at this from all of society. And for me, it doesn’t matter if the money is coming from the government, the employer, or the individual—that’s society’s resources. The government is the people. People aren’t getting raises in their jobs because it’s going for benefits,” Arnold said.
Arnold spoke with Herper for about 30 minutes and talked about drug pricing, as well as other things. Arnold has financially backed Civica Rx, a non-profit generic drug company that was announced earlier this year by multiple healthcare systems. As Biospace reported earlier this year, Civica Rx’s first drug could launch in 2019. The new company is promising transparent pricing without rebates common to the industry.