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deal with the future challenges of impending disease”—he cited the tens of millions of people slated to have Alzheimer’s in coming decades—“unless we increase the rate and incentives of innovation. People’s lives are at stake. We could kill the future of mankind.”
Wait a moment, we asked. Aren’t people’s lives at stake now because they can’t afford healthcare, with drug prices being one component of those spiraling costs? “I’m not saying that current costs and access aren’t important,” answered Yancopoulos. “But it’s a rounding error in terms of future challenges that society faces. It’s penny-wise and dollar-foolish.”
INCOMING: DRUG-PRICE TSUNAMI
Elsewhere, a top drug executive surveyed the political scene and said price interventions, like it or not, were inevitable. “The champions in the Republican Party who used to understand the value of innovation and the need to stay away from controlling pricing are being dwarfed by a president who believes that drug prices are too high, because that plays to his base, and he is or will be singing in harmony with the left wing of the Democratic Party, which has a more emboldened approach,” said Bill Newell, CEO of San Francisco, CA-based Sutro Biopharma (NASDAQ: STRO) and chairman of the California Life Sciences Association.
Democrats and Republicans are as polarized as ever, but they can agree that drugs cost too much and that “some sort of pricing mechanism is going to be necessary,” Newell said during a lunchtime discussion at the Biotech Showcase, a separate conference that takes place adjacent to J.P. Morgan. (Disclosure: Xconomy’s parent company Informa owns Biotech Showcase.)
“We’ve held that argument at bay as an industry for a long time, and I’m here to tell you that what I hear is that the wave is going to come in and it’s going to hit the shore,” he said. “The only question is what’s it going to look like? What’s the new normal, how will we adjust to the new normal, and how will the markets adjust to the new normal?”
His advice to biotechs: Furiously save cash, because drug-pricing legislation could hit earnings at big companies, dwindle resources for deals, and scare investors away from the sector.