Every few years, commentators say the biotech industry is at a tipping point…that it’s poised for the next inflection. Ron Cohen, president and CEO, Acorda Therapeutics, Inc., and a panelist at Biotech Showcase’s luncheon plenary January 8 in San Francisco, says there’s no such thing as a tipping point.
Instead, he notes that the industry is experiencing an accelerating arc that is punctuated by the description of the double helix in the 1950s, the original sequencing of the human genome in the 1990s and, more recently, the simplification of gene editing with tools like CRISPR/cas9.
With this wealth of resources, “We’re approaching an era of cures rather than chronic treatments, and face exciting possibilities for eliminating diseases,” says moderator Sara Radcliffe, president and CEO at the California Life Sciences Association. “We’ve seen more FDA approvals in 2017 than in many prior years, and mergers and acquisitions are poised to fuel business activity in the wake of the tax reform bill that recently passed Congress.”
The future looks great, panelists agree, but that rosy outlook must be balanced against challenges such as widespread access to new therapies, unsolved reimbursement strategies and a mistrust of the pharmaceutical industry because of drug pricing issues.
“We’re in a race between science and very bad policy,” says Jim Greenwood, president and CEO at Biotechnology Innovation Organization (BIO). “The solutions are simple. We can sit with Congressional staff and identify how to solve these challenges.”
What is more challenging is the political problem. Specifically, there is a disconnect with the public about drug pricing, and it can’t be explained in sound bites. The general population equates out-of-pocket drug costs with drug pricing, which is controlled by their insurance policies. As very expensive therapies—some of which have the potential to cure certain conditions—are commercialized, discontent builds. Patients complain to their Congressional representatives, who then look at the industry unfavorably. “This situation isn’t sustainable."
Even if costs were cut, Greenwood adds, “we can’t price our way out of this dilemma.”
Spark Therapeutics addressed the challenge successfully when it introduced its new gene therapy targeting blindness. Originally, it was positioned as a USD 1 million therapy, so its USD 850,000 cost was seen as an improvement. The main thing, however, is that the company focused on value, contrasting it with a decade of treatment for hemophilia. Offering to refund the price of the drug if treatment failed helped, too. “We should study that and prepare our groundwork in a similar way,” Cohen advises companies with breakthrough therapeutics.
Biotech companies also need to bring commercial concerns back into the clinic. To Paul Mignon, president and global head, selling solutions, Syneos Health, that means “learning from innovations and playing them forward. ‘Slightly better’ won’t cut it, so we need to go back and look at our studies and find ways to benefit patients and be commercially viable.”
The process requires multiple strategies. One is to minimize organizational silos so everyone is focused on the same goal and can access the latest information, thus reducing duplication. Another is to implement a data science approach that uses the wealth of previously inaccessible data. Companies also can leverage the consumerization of healthcare, integrating digital medicine in ways that generate additional data from patients’ lives or that improve communications and, therefore, may improve patient adherence.
Despite the industry’s greedy reputation, there is help in Washington, DC, Greenwood assured the packed ballroom. “President Trump’s rhetoric regarding the pharmaceutical industry is awful, but his appointees understand our industry and won’t recommend policies to thwart it. Nothing has happened in Congress that is detrimental to our industry (except perhaps the change to orphan drug policy).” There also is broad bipartisan support to increase federal research funding because many Members of Congress believe that is the source of innovation, he adds.
BIO is working to broaden the conversation with Congress, putting drug costs in context within the healthcare environment. That means talking with legislators—and meeting new Congressional members—about real value and the role of pharmacy benefit plans and payers. Greenwood also is developing champions. “Just because Congressmen are from Boston or San Francisco doesn’t mean they support our industry. These are blue, liberal regions,” he reminds. He makes it a point to meet with them.
Policy matters, panelists emphasize, and it is affected by perceptions of value. For example, biotech stocks may rise and fall significantly before a single product is on the market. “That’s why trends in the biotech environment are so important,” Rachel King, CEO Glycomimetics, Inc., points out.
Therefore, the industry must focus tightly on the value it delivers to each stakeholder, and express that value in every forum it finds.
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