Thumbs Up/Down

Dems fire off a silly pricing bill; What’s wrong with Novartis?

Endpoints assesses the big biopharma stories of the week, with a little added commentary on what they mean for the industry.

thumb down The Democrats field few good ideas in a drug pricing bill that is DOA

Any Senate bill that relies on a long list of Democrats for its support doesn’t have much chance of becoming law. But the Dems’ proposed law does help illustrate what Party leaders are thinking these days, and where President Trump may find common ground if the ultra conservative wing of the Republican Party can’t be brought back into the fold.

At the top of the list of things-pharma-companies-hate is a requirement to break out development costs for each new drug. The unending debate over the cost of R&D generally revolves around global R&D budgets compared to approvals. The Democrats want to see some hard numbers for each new program, probably so they can start shaming manufacturers for excessive pricing.

Medicare negotiations are back, of course. Already supported by Trump, government analysts have concluded that Medicare price negotiations as such wouldn’t likely create much in the way of savings. That would take a formulary, and the threat of kicking off drugs priced too high, an idea which causes angst in pharma circles.

In this new bill Medicare would be allowed to use VA prices or a price list from some other agency if officials can’t negotiate a “fair” price. We already know from the California bill that drugmakers would fight this to the last lobbyist. There’s also a special excise tax in the event a pharma company pushes up the price of drug more than medical inflation.

Interestingly, there’s $2 billion “prize” money for new antibiotics. Given the need here, and the low cost, it’s unlikely to spur much opposition. And there’s $10 billion to pay for drug trials at the NIH. Also, not so controversial, but right now the focus in the new administration is on cutting the NIH budget, not adding to it.

Bottom line: Aside from Medicare negotiations, there isn’t much here for a bipartisan approach. It’s DOA, like most everything else in the Capitol these days.

thumbthumb down Numbers before people. It’s the industry standard.

Over the past week we’ve covered several new reorganization stories. Amgen led the way, with its planned move pushing about 10% of its Thousand Oaks staff out of HQ. The cuts or relocations involve moving positions and researchers to the two big hubs of the Bay Area and Cambridge/Boston. Vertex, we learned from an SEC filing, is shuttering its Canadian R&D facility in a consolidation. R&D sources tell us they’ve also been rooting out pockets of the “Old Guard” in what are referred to as “stealth layoffs.” And Takeda gave us an example of the M&A variety of job cuts, with their decision to ax 180 of about 300 jobs at the newly acquired Ariad (with some axed staffers going to a CRO).

With biotech valuations being what they are, it shouldn’t surprise anyone to see buyers cut as deep as they possibly can after an acquisition. It’s one way to make numbers work. That’s a simple, though painful, reality.

Amgen, for all its biotech history, is now a Big Pharma and it will look for efficiencies wherever it can find them. Like all the Big Pharmas, the only constant in R&D is change.

Vertex gets a black star next to its name. Not for the Canadian retreat — everybody is consolidating in designated hubs — but for its refusal to be honest about the stealth layoffs. You don’t have to be downsizing to note when you are laying people off from their jobs.

I was asked by a Roche employee at Nutley a few years ago what I thought about job security in R&D. I told her I didn’t see much of it. The fact is companies will do what’s in the best interest of their shareholders every time. For rank-and-file employees, that takes a willingness to stay flexible and move as needed and desired.

The constant churn helps with new company creation, but the mechanics of this new reality are unforgiving at a personal level.

You can’t fight a trend like this. But you can determine the best way to manage a career in which job security is a thing of the past — if it ever existed.

thumb down What’s wrong with Novartis?

I have no inside knowledge why Karen Walker is leaving her senior position in charge of cell therapy manufacturing for Novartis. Seattle is a nice place to live, or so I hear, and for all I know Seattle Genetics made her an offer she couldn’t refuse. That’s her business.

But her timing, leaving two days after the FDA accepted Novartis’ application for its pioneering CAR-T, couldn’t have been worse for the company. Manufacturing is a critical element in this field, more than most others, and she would have played a key role in its review.

It’s another example of the exodus of talent from Novartis over the past year. Some of that is self-inflected, like Novartis’ questionable decision to dissolve an independent cell and gene therapy unit, which led Oz Azam to leave the company. But bleeding talent the way Novartis has is indicative of deep problems.

The upside here is that lots of these experienced execs — like Azam and Walker — are taking new jobs in a booming biotech sector. But what’s wrong with Novartis?

thumb Third Rock’s latest startup launches in style, with an ambitious set of goals

While turnover remains high, the industry remains vibrant because new company creation in biotech is strong. One of our top stories this week focused on a classic Third Rock startup, Tango Therapeutics. I enjoyed covering the science they will be exploring, as the team grows into the mid-20s.

This company has everything a startup wants: Brains, money and ambition. And it’s carving out new territory in drug development, going big.

It’s companies like these that make my job fun. Whether it works or not, it certainly looks like they deserve a shot. And it keeps the big hubs like Boston/Cambridge teeming with new ideas for old, impossible targets. Thumbs up, indeed.

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Sr. Manager, Regulatory Affairs, CMC
CytomX Therapeutics San Francisco, CA
Marketing Associate - Demand Generation
Catalytic Data Science Charleston, SC
Associate Principal, Life Sciences Partnerships
Flatiron Health New York City or San Francisco

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