[Editor’s note: Deputy Biotechnology Editor Ben Fidler co-wrote this story] The week of the annual J.P. Morgan Healthcare Conference in San Francisco kicked off with a rousing, sleeves-rolled-up defense of the drug industry’s pricing policies by Ron Cohen, CEO of the multiple sclerosis drug maker Acorda Therapeutics (NASDAQ: ACOR) and new chair of the industry’s top trade group, the newly named Biotechnology Innovation Organization. Cohen on Monday joined other industry boosters at a lunchtime panel discussion called “The great pricing debate: Navigating through an industry sea change.”
There was little debate. The panelists spent much of the time defending the drug industry’s record and lashing out at critics—the media, the public, government, politicians, insurers, and so on.
To be sure, the industry has its detractors, and many of them are trying to score points. But except for a bit of crowing that BIO, the trade group, excommunicated price gouger Martin Shkreli in September, there was little acknowledgment that the drug business has many of its own problems that need a fix.
We’ll have more on this issue in days to come. But this week it wasn’t hard to find people within the industry who were happy to speak openly about some of these systemic problems. Which brings us to our first roundup item.
—Talking A Different Game About Pricing: Alnylam Pharmaceuticals (NASDAQ: ALNY) CEO John Maraganore is thinking a lot about drug pricing these days. In less than two years, his company could begin selling its first product, and he says Alnylam plans to do something biotech and pharma companies usually don’t do. It’s going to be very open, and talk publicly, about its pricing strategy. “This is not something that we will hold back on,” he told Xconomy.
He wouldn’t say exactly what Alnylam plans to do. But late last year he spoke publicly about a piece former Merck CEO Roy Vagelos wrote for Science two decades ago, in which Vagelos said price increases from a moral drug corporation should be tied to inflation.
Maraganore swore that Alnylam wouldn’t institute a price increase just “because the calendar turned over,” a fairly common practice in healthcare.
“We ought to be more reliant on our productivity to grow our business, not arbitrary price increases—I think that’s going through the minds of many companies,” he says, then adding, specifically regarding Alnylam: “We’re willing to hold ourselves to that.”
Maraganore isn’t specifying exactly how Alnylam will do this just yet—“stay tuned,” he says—but that “many” companies will have to think the same way going forward.
—Where Are the San Francisco Bears? Despite this writer’s meteorologically dire tweet a few days before J.P. Morgan kicked off about a looming monsoon, the only thing falling throughout the week were the biotech indices—until the final day, Thursday. (Which is also when it finally began raining in earnest. Go figure.)
Public investors obviously weren’t in a good mood; you can’t argue against stock prices. But when taking the temperature of private company executives and others—admittedly an unscientific exercise—no skies were falling, literally or figuratively. Selection bias? Possibly. People feeling pessimistic aren’t as likely to agree to talk to reporters.
—The Pfizergan Shadow: The pending $160 billion merger between two of the drug industry’s most deal-hungry companies couldn’t help but be a big topic of conversation this week. As we reported, biotech VCs joined Allergan executives for a private breakfast and came away convinced that CEO Brent Saunders would be driving the bus soon enough after the merger. Saunders also told Xconomy that, unlike most other pharma mega-mergers, this one would not be about cutting costs, but about growth.
Executives from both companies then held court at a joint appearance to say largely the same thing. They spoke glowingly about the prospects for innovative science within the labs of the combined company, once the merger goes through.
With all the talk of an innovative “Pfizergan,” a couple outspoken guys from Queens couldn’t hold their tongues. At the mention of Allergan, Regeneron Pharmaceuticals (NASDAQ: REGN) chief scientific officer George Yancopoulos told Xconomy that … Next Page »