Healthcare costs can’t keep going up faster than inflation forever. Biotech companies aren’t going to have unlimited pricing power for new drugs and diagnostics forever. Innovators will have to adjust.
This was the theme of our big Xconomy Seattle event this week, “Biotech in the Belt-Tightening Era.” We had a great crowd from around the West Coast come together for a series of moderated talks with established drug and diagnostic companies, as well as a few promising up-and-comers. All of them are clearly thinking hard about how to demonstrate that their products improve patient outcomes, and that they are worth the money.
I think everyone recognizes there will be cost constraints in healthcare of the future, but each company has a different strategy for navigating that new environment. Clay Siegall of Seattle Genetics said his company will keep attempting to make drugs like brentuximab vedotin (Adcetris) that make a big difference in the lives of patients, and that can fetch high prices with little pushback from insurers. Mitch Gold, the founder of Alpine Biosciences, said he’s focusing on a new low-cost technology from the University of New Mexico that can stimulate the immune system to fight cancer, and which should give him future flexibility to make money at a lower price. Kim Popovits, the CEO of Redwood City, CA-based Genomic Health, says there’s going to be increasing demand for technologies like Oncotype Dx that can squeeze expensive overtreatment out of the healthcare system.
Thanks to all the speakers and attendees who brought diverse perspectives to such a tricky issue. Special thanks go out to Northeastern University Seattle, which did a great job hosting this event, and even provided a fabulous parting gift to attendees (a combination beaker/coffee mug). See you at the next Xconomy Seattle event.