Could you provide our readers with an introduction to PhRMA and highlight what your mandate has focused on accomplishing?
PhRMA represents the innovative segment of the pharmaceutical industry. We are comprised of 35 of the largest biopharmaceutical manufacturers as well as some of the smaller companies. Our mission is to nurture the end-to-end innovative pharma ecosystem.
When I first came to PhRMA, I wanted the organization to be more proactive and solutions based. For the first time, we have a granular proactive agenda aimed at lowering out-of-pocket costs for consumers, which have grown by 50% in recent years. A second focus has been broadening the debate around drug pricing and focusing on other actors that play a role in what patients pay. Moreover, we have partnered with Yale and Vanderbilt universities on a diversity initiative which is aimed at expanding access to clinical trials.
What has been your stance on the Inflation Reduction Act (IRA)of 2022?
The IRA is profoundly anti-innovation and anti-science. Worst of all, it does not address patient affordability issues, except for the out-of-pocket cap, which only helps 10% of Medicare beneficiaries.
Lawmakers could have pursued several additional reforms that would have reduced patient out-of-pocket costs. For example, they repealed the rule that would have required a rebate pass through, which would have immediately reduced patient costs. They could have lowered cost-sharing in Medicare and eliminated deductibles. There was a price cap on insulin that they could have expanded to other disease areas as well. These are the type of reforms that had bipartisan support, but politics intervened. The IRA did not go far enough on affordability with the most acute problem being the impact on research and development.
The IRA was put in place to help patients access drugs more affordably in an industry that has not always been transparent about pricing – what will the direct impact on them be?
There is going to be a reduction in new treatments and cures that come to market. The Congressional Budget Office said it will only be 15 drugs in the coming year that are impacted, but we believe this will be closer to 100 in the coming decades. The early signs suggest this based on the some of the drug development programs already being cut.
As for transparency, yes there have been some bad actors in the industry that have made our job more difficult. There are, for example, hedge funds masquerading as biopharma companies and examples like the EpiPen scandal, have played a role. One of things I am most proud of at PhRMA is to change our membership criteria to require a certain percentage of sales be invested in R&D to make sure we are truly representing companies that are taking large scale risks with a long-term horizon.
We are only one part of the system as drug manufacturers capture less than 50 cents of the dollar spent on brand medicine. We must get after some of the intermediaries in the system. The arbitrage that has been taken out of the system for the benefit of for-profit actors is not finding its way back to patients.
What are some noteworthy life science innovations in addressing unmet medical needs?
The life sciences industry is incredibly exciting on the science side. For example, cancer mortality is down 30% over the past few decades because of immunotherapies and CAR-T. We have new cell and gene therapies and new therapies for sickle cell and hemophilia. These are diseases that are incredibly burdensome for patients and societies. Moreover, we are at the cusp of disease-modifying treatments for Alzheimer’s, which is a ticking time bomb demographically. It is important to note that life expectancy went down by a year, and the U.S. life expectancy is now lower than China - due in part to preventable chronic disease. We need new treatments and cures.
How can the industry build a more robust supply chain in the aftermath of the Covid-19 pandemic?
The industry already has a robust global supply chain. I consider it to be a feature rather than a bug of the system. The Covid-19 pandemic is a great example of how the supply chain was able to work to produce 15 billion doses. What we need to do is focus on STEM investments, so we have an adequately trained workforce. We need to continue to have a competitive tax and regulatory climate that provides incentives to develop advanced manufacturing in the U.S. We must make sure we do not have knee jerk reactions that lead to repatriations for the sake of it.
How do you think the U.S. biopharma industry will unravel in the coming years?
We continue to have the strongest ecosystem in the world for a lot of reasons. We have a gold standard regulatory process, top capital markets, the Bayh-Dole Act which allows both industry and academia to collaborate and strong IP protection. We have all the building blocks of a thriving ecosystem. There is no doubt IRA will make the riskiest industry in the world, even more risky. We are hopeful that through our advocacy and collective effort, we will be able to deal with the challenges ahead.
