LONDON – With pressure on drug pricing on the rise, Jim Greenwood, president of the U.S. Biotechnology Innovation Organization (BIO) was defending the industry's position in the U.K. yesterday, attending the Oxford University Union to debate the motion, "Big pharma prioritizes profit over patients."
Expressing the issue in that way creates a false dichotomy, Greenwood contends. Pharma has to find a balance between the two, because there are two kinds of patients; those who are trying to get access to current drugs and patients of the future who will be treated with the breakthrough products of tomorrow.
Without returns from the former, the latter will face unmet medical needs. "It is the availability of resources in big pharma that pulls through these new therapies," Greenwood said, limbering up for the hothouse of the Oxford Union by speaking to the U.K. Bioindustry Association's autumn forum in London.
As Greenwood noted, the city of Oxford is home to many startup biotechs that will be hoping to attract partnerships and the resources of big pharmas once they get pipeline products into phase II or phase III. "Of 48 products approved by the FDA last year, 41 began their lives in biotech," he said.
That statistic gets to the heart of the opportunities and challenges faced by the biotech sector on both sides of the Atlantic. In the U.S., the free market system has produced "miraculous results," with a strong venture capital community and lots of funds available for the sector.
That has fueled development of important new products, Greenwood said, referencing Gilead Sciences Inc.'s Sovaldi (sofosbuvir) hepatitis C treatment, which can bring about a cure for the chronic infection in 12 weeks.
Similarly, new cancer immunotherapies, gene therapies and the use of CRISPR/cas9 genome editing, offer great opportunities.
"But the challenge is in the high price of Sovaldi and the high price of cancer drugs," Greenwood said.
Not that BIO would defend gouging, said Greenwood, pointing the organization's rapid expulsion of Turing Pharmaceutical AG's Martin Shkreli following his move to bump up the price of Daraprim (pyrimethamine) by 5,000 percent, after acquiring the rights to the toxoplasmosis treatment.
That most egregious case has put the spotlight on drug pricing. "There is more and more intense pressure for price control in the U.S.," said Greenwood, noting that a tweet by Democratic presidential candidate Hilary Clinton saying she would institute controls if elected prompted a crash in stock prices from which member companies are, as yet, to recover. (See BioWorld Insight, Sept. 28, 2015.)
Saying, "I know you think we have lost our minds" in reference to the Republican presidential candidate Donald Trump, Greenwood told the audience he expects Clinton to win, but a balance between the two parties in the Senate means there will not be an overnight change in drug price regulation.
However, Greenwood said, "I fear no matter who wins, there will be price controls."
There is a further threat in the shape of California's proposition 61, a referendum question on the ballot on Nov. 8 calling for the Medicaid insurance system to be able to buy drugs at the same price as the Department of Veterans Affairs.
A yes vote will support regulating drug prices by requiring state agencies to pay the same prices that the U.S. Department of Veterans Affairs pays for prescription drugs.
"It will be difficult to overcome this, with polling saying 50 percent are in favor. Industry is spending millions of dollars [lobbying against the proposition]," said Greenwood.
According to the website Ballotpedia, proposition 61 could be one of the most expensive ballot measure battles in 2016, and the one on which the most money is spent in California's history. As of Oct. 2, 2016, the combined amount of money raised by the support and opposition campaigns totaled more than $101.4 million.
California spent nearly $3.8 billion on prescription drugs in the 2014-2015 financial year.
If passed, proposition 61 would mean that companies have to raise prices elsewhere, according to Greenwood. "We are quite worried if it does pass, other states with ballots will put it on their ballots." That would signal the end of the free market, Greenwood said.
Greenwood also took a swipe at recent changes to U.S. patent law that allow opponents to patents to short circuit the judicial system and go straight for a review at the U.S. Patent and Trademark Office.
As a result, patents have been overturned and in addition hedge funds have been "shorting stock in large measure" and then filing patent office challenges.
"The stock plummets in value and the hedge fund makes money," said Greenwood.
Apart from the impact on individual companies, it is becoming difficult to value patents. "We are working very hard to overturn this measure," Greenwood concluded.