This year, our industry has been working around the clock to combat the COVID-19 virus, including developing effective therapeutics to treat COVID-19 and vaccines to prevent future infections.
I had the opportunity to connect with Alexander Hardy, CEO of Genentech, about the company’s efforts to fight COVID-19 and how recent policy proposals would impact this work.
Stephen J. Ubl (SU): While it’s clear that science is how we get back to normal – having seen amazing public-private partnerships to that end – there are now some policies on the table that jeopardize the goal. Can you speak about that?
Alexander Hardy (AH): Steve, let me first start off by thanking you for taking the time to speak with me about this very important topic that is threatening our industry. I think the most concerning policy currently is the ‘Most Favored Nations’ (MFN) executive order, that President Trump wants to push forward. This will undoubtedly have a detrimental effect on our industry, striking an irreversible blow on the future of scientific innovation in America.
Importing price controls arbitrarily from countries that have historically rationed health care and restricted access to innovative medicines — a stark contrast to what Americans experience today — and introducing new middlemen into the reimbursement landscape, will result in disastrous long-term economic and social consequences for our country.
The MFN proposal will cause irreparable harm to the American economy, as well as the global economy, have a catastrophic impact on our ongoing ability to discover and develop breakthrough therapies, and — most importantly — it will put patients’ lives in harm’s way by restricting access to life-changing medicines they depend on.
We are disappointed that President Trump is prioritizing politics ahead of the presidential election, over meaningful, market-based reforms. It’s disheartening that the industry’s efforts to propose thoughtful, short-term policy alternatives and long-term principles that would meet the President’s objectives of reducing government spending and lowering patient costs on specialty drugs, have been ignored.
Additionally, the timing of this proposal is troubling as it comes when the industry is mobilizing against a global pandemic that has wreaked havoc on people around the world. It will shift focus and vital resources away from the industry’s efforts to develop safe and effective vaccines and treatments to combat COVID-19.
And, let’s not forget, the MFN order is not the only threat to our industry. A year ago, House Democrats passed a drug pricing bill — known as H.R.3 — that would, if passed, effectively implement international reference pricing across both Medicare Part B and Part D.
SU: What exactly are the implications of the most favored nation executive order?
AH: We have seen sobering data-points that affirm just how financially devastating the President’s proposal could be on our economy. In fact, it is estimated that more than 700,000 jobs across America will be permanently lost, while at the same time, investments in new and existing infrastructure, as well as R&D will inevitably decrease.
We believe investments in scientific innovations in areas of great need for new or better treatment options, including cancer, neurological disorders, and many other diseases, will diminish. According to a study from the President's own advisors, as many as 100 new life-savings medicines could be prevented from entering the U.S. market over the next decade — representing about one-third of all new medicines expected during that time. The decrease in scientific innovation could cost the biopharmaceutical industry up to $1 trillion over a ten-year period.
As I mentioned earlier, this proposal is likely to unavoidably restrict patients access to medicines that they need. American citizens have long benefited from the country’s standing as the global leader in risk-taking and innovation and they have access to more medicines than any other country in the world. From 2000 to 2010, the U.S. was responsible for 57% of all new medicine approvals across the globe. Of the 74 cancer medicines launched between 2011 and 2018 worldwide, 96% are available in the U.S., whereas only 71% are available in the United Kingdom, 50% in Japan, and 11% in Greece. For some cancer medicines that are available in comparator countries, there is an 18-month average lag between the time they are available in the U.S. and availability elsewhere.
Clearly, this isn’t acceptable. It’s imperative that patients have rapid, broad and sustainable access to the medicines they are prescribed. Imposing foreign price controls from countries that have fundamentally different health systems and are willing to compromise on patient access is not the answer.
SU: What would that mean in terms of our industry’s ability to find treatments and vaccines for the next health crisis?
AH: Preserving the U.S. private market is essential to our ability to develop life-saving medicines and vaccines not only to fight COVID-19, but for other big challenges that the world is facing — such as antimicrobial resistance, which threaten the foundation of modern medicine.
Imposing foreign price controls, that have no relationship to the actual value of a medicine, will seriously harm our leadership position on biomedical innovation. At the same time, investments in innovation will continue, if not increase, in other parts of the world — particularly in countries which are eager to displace the U.S. as the scientific leader. Once U.S. leadership is lost, it will be difficult to regain.
The U.S. is the global leader in biopharmaceutical R&D, access and patient outcomes because we value innovation, and the free-market system has allowed us to deliver cutting edge innovation to patients around the world. Last year alone, Roche and Genentech invested nearly $12 billion in R&D — more than any other health care company in the world.
SU: How can we make the system work better for patients while still preserving our innovation ecosystem?
AH: Genentech has long advocated for solutions that would significantly lower patient costs and save government programs money, while at the same time maintaining America’s position as the global leader in the R&D and manufacturing of new innovative medicines.
Working with other pharmaceutical companies and our trade associations, we have been actively engaged in putting forward policy recommendations that promise to generate billions of dollars in savings. In fact, the industry offered over $100 billion in savings to support patient and government costs.
The real tragedy here is that there ARE real solutions — such as new free-market competition mechanisms and innovative payment models — that would bring meaningful change to the American health care ecosystem.
It’s time we all work together to move beyond the rhetoric and implement durable solutions to ensure that Americans today and into the future receive appropriate and affordable care while encouraging ongoing innovation in health care.
As always, you can stay up-to-date with the work the biopharmaceutical industry is doing to combat COVID-19 here.