Over 200 biopharma leaders endorse commitment to patients and the public
Why over 200 biopharma leaders have signed onto a new commitment to patients
Dismayed by their industry’s abysmal reputation, leaders of small and medium-sized biotechs are taking rebuilding public trust into their own hands. Led by six CEOs, executives representing over 150 companies have signed an open letter outlining a commitment to put the interests of patients ahead of profits.
Notably absent from the list of signers are leaders of big biotechs and pharmas, who were given the opportunity but passed. While smaller companies are often the engine of innovation, it is generally the big companies in the driver’s seat for decisions about pricing and access.
The fates of new drugs are no longer always in the hands of big pharma, however. Half of the co-authors of the letter lead small companies that are marketing their own drugs and are in a position to put the commitment into practice.
So far, over 200 individuals -- executives at small- and mid-sized biopharma companies, investors, and academic researchers -- have signed the “New Biotechnology & Pharmaceutical Industry Commitment to Patients & the Public”.
“I really hope that this causes everybody involved in the biopharmaceutical industry to look inward and to think about our business practices and our obligations.”
It is the first explicit, broad public commitment from the leaders of companies developing innovative medicines to price their products responsibly, to ensure patient access, and to facilitate the marketing of generic and biosimilar drugs after exclusivity has expired.
The authors have invited the public to hold them accountable for complying with the commitment. But it remains to be seen if this can move the needle: public trust will not be regained easily; there are few specifics in the commitment; and the most controversial provisions, those related to drug pricing, are broad and subject to interpretation.
Access: a moral obligation
The 2020 letter begins by stating that “we are at the dawn of a golden age of medicine” that will soon bring “the ability to treat and cure diseases which have been untreatable and incurable.” It continues by asserting that the signers acknowledge a “moral obligation to develop the best medicines and ensure that every person who may benefit has access to them.”
The letter outlines commitments to ensure access to medicines and to business practices that reflect integrity and responsibility.
Access commitments include setting launch prices that “reflect innovation and value to patients,” as well as broad patient access.
The co-authors and signers commit to limit price increases to levels that are “reasonable and guided by the need for uninterrupted patient access.”
They vow to collaborate with policymakers, PBMs, payers and providers to limit or eliminate co-pays and deductibles, and to support approvals of generics and biosimilars.
On integrity and responsibility, commitments are broad and non-controversial, ranging from a vow to engage only in “ethical business practices that drive innovation, competition and patient choice” to a promise to “invest only in novel therapies that address unmet patient needs.” There is also a commitment to “patient advocacy in how we build and operate our companies.”
Reflecting the authors’ view that responsible companies are being tarnished by the actions of bad actors, the letter commits its signers to “speak out about and not tolerate companies and other stakeholders who abuse this commitment to patients, and who abuse policies aimed at fairly rewarding innovation.”
BioCentury spoke with each of the co-authors: John Crowley, Chairman and CEO, Amicus Therapeutics Inc. (NASDAQ:FOLD); Paul Hastings, CEO, Nkarta Therapeutics Inc.; Rachel King, CEO, GlycoMimetics, Inc. (NASDAQ:GLYC); Jeremy Levin, Chairman and CEO, Ovid Therapeutics Inc. (NASDAQ:OVID); Ted Love, CEO, Global Blood Therapeutics Inc. (NASDAQ:GBT); and John Maraganore, CEO, Alnylam Pharmaceuticals Inc. (NASDAQ:ALNY).
They realize that by itself a letter isn’t going to change perceptions.
Their hope is that by publicizing the commitment and putting it into practice, the public, politicians and policymakers will start to view the industry as it sees itself -- as a vital contributor to health and the best hope for bringing patients new treatments and cures.
“What we do is really an extension of the practice of medicine,” Crowley told BioCentury.
“If you look at the public perception of the biopharmaceutical industry over the 20 years that I've been involved, it is really bad, and frankly tragic, and it doesn't reflect the great work that we're doing,” Crowley told BioCentury. “I really hope that this causes everybody involved in the biopharmaceutical industry to look inward and to think about our business practices and our obligations.”
“If you want to price what the market will bear, then tell people that’s why you’re pricing it that way and open yourself up to that criticism.”
Maraganore told BioCentury the letter “marks a stake in the ground by the innovators to say we'll make a commitment on our part to deliver innovation, to deliver value, to be responsible players in the system around generics, biosimilars and price increases.”
Given widespread skepticism about drug companies and the political attractiveness of attacking the industry, the biggest challenge associated with the commitment will be persuading the public that the commitment to pricing and access is meaningful.
Companies will need to live up to the promise to “reflect innovation and value to patients” -- a moving target, and one that has proven controversial and hard to define in the cases where it’s now under discussion, such as gene therapies and other potentially curative medicines.
“Each company is going to have to make their case drug-by-drug,” Glycomimetics CEO King told BioCentury.
While there’s no standardized algorithm for setting appropriate prices, failure will be obvious she said. “If the industry brings life-saving drugs to market and people don’t get access to them when they need them, that’s not a sustainable situation.”
Drug companies should be transparent about the rationale for setting launch prices, Hastings told BioCentury. He advocates value-based pricing and said that companies that have other practices should have the courage to tell the public. “If you want to price what the market will bear, then tell people that's why you're pricing it that way and open yourself up to that criticism.”
Love cited the pricing of Global Blood’s first drug, Oxbryta voxelotor for sickle cell disease, as an example of fulfilling the commitment. “We wanted to make the price adequate to reward the investors and others for the innovation, but we also wanted to make sure that the price was something that would be well received by payers and by the community.”
He noted that it is common for treatment for sickle cell patients to cost $280,000 per year. The company decided that if it priced Oxbryta “at a fraction of that number, then that could be well received.”
Global Blood launched Oxbryta in November 2019 at a wholesale acquisition price of $7,071-$9,428 per month. Love is passionate about the letter’s commitment to try to limit or eliminate copays and deductibles.
“When people get sick and they need lifesaving medicines, I think co-pays are stupid,” Love told BioCentury.
Most Medicaid patients have no copay for Oxbryta and the maximum Medicaid copay is $8 per month. The company pays all copays for patients who have private insurance and has tried to minimize copays for Medicare patients.
While they said establishing launch prices is complex, the letter’s authors all said that the issue of price increases is far simpler.
The public is right to demand that drug companies stop taking price increases that are not justified by enhanced value, King said. “I can’t think of any other product that the older it gets, the more expensive it is.”
In part to avoid violating antitrust laws, the letter does not make explicit commitments about price increases. Its authors, however, made it clear that they will limit or avoid price hikes.
Hastings and Crowley have publicly endorsed proposals to restrict price increases to inflation levels, unless there are compelling justifications for larger increases.
“When people get sick and they need lifesaving medicines, I think co-pays are stupid.”
“When we launched Galafold in the summer of 2018 we said we will never raise the price annually more than the Consumer Price Index,” Crowley said. Amicus launched Galafold migalastat, which is approved to treat Fabry disease in adults with amenable mutations, at $315,000 per year.
Global Blood has committed to avoid increasing the price of Oxbryta for three years.
Alnylam has publicly committed to limiting price increases of its products to the consumer price index for urban consumers (CPI-U), “in the absence of significant investment associated with a meaningful label expansion.”
Maraganore told BioCentury that “the practices that we've seen in the past for many companies, double-digit price increases, just cannot be sustained and are not acceptable. We as a group of companies believe that it's important to cry foul when we see those practices.”
Maraganore and his co-authors all vowed to implement the commitment to speak out against companies that “abuse policies aimed at fairly rewarding innovation.”
They also declined to point the finger at companies that are taking actions they oppose, but said they will do so in egregious cases in the future.
Why BIO, big biotechs and pharma haven’t signed
Levin advocated many of the elements in the commitment in a speech marking the start of his two-year term as BIO chairman.
BIO has not, however, formally adopted the commitment. Levin attributed this to legal limits on a trade association’s ability to comment on pricing issues, the difficulty of achieving consensus, and to a decision to make the commitment personal rather than institutional.
“We could do this rapidly, effectively and more efficiently if we simply did it with those who were willing to put their name to a statement of this kind rather than request any industry organization support,” Levin said.
Even if BIO’s board could be convinced to sign, “it is not appropriate for an industry organization to make a personal commitment,” he added.
“Some companies don’t agree with us. They want to continue their practices of frequent and double-digit price increases.”
BIO president and CEO Jim Greenwood issued a statement expressing support for the commitment. “We are proud that so many of our science and business leaders in the biotechnology field chose to sign a statement in support of patients, even though the statement was developed separate from and independent of BIO.”
The co-authors presented the commitment to a large number of executives at big biotechs and pharmas, Maraganore told BioCentury.
If they succeed in creating new medicines, many of the companies that have signed the commitment will rely on large companies to bring their products to market. It will be difficult and often impossible for emerging companies to force big biotech or pharma companies to adhere to commitments about pricing and access.
Maraganore attributed their decisions to avoid endorsing it to three causes: the inability of representatives of larger organizations to act quickly; interference from risk-averse attorneys; and opposition from some CEOs to the ideals espoused in the letter. “Some companies don't agree with us. They want to continue their practices of frequent and double-digit price increases, and they want to increase their practice of using patent thickets to thwart the arrival of biosimilars and generic medicines.”
Those practices, Maraganore charged, will “destroy the innovation cycle that is so important in this is what we do.”
The purpose of the commitment, according to King, is to signal the enthusiasm of hundreds of biopharma leaders to innovate on behalf of patients.
In the end, the industry will be judged on how well it puts the commitment into practice, she said. “No one is going to look at this letter and say now we don’t have to do anything -- the problem is solved. If industry is to regain the respect it once had and that it deserves, it will be as a result of delivering innovation and ensuring people have access to it.”