Ruud Dobber, AstraZeneca

If you were a can­cer pa­tient, where would you rather be — the Unit­ed States or Eu­rope?

LON­DON — Frus­trat­ed by the lack of leg­is­la­tion im­ple­ment­ed to low­er soar­ing drug prices in the Unit­ed States — a key is­sue that has elicit­ed out­rage across both ends of the po­lit­i­cal spec­trum — the White House re­cent­ly is­sued a re­port sug­gest­ing that US drug prices aren’t un­rea­son­able, it’s that de­vel­oped na­tions aren’t pay­ing their fair share.

“These prac­tices abroad dis­pro­por­tion­ate­ly cost U.S. pa­tients and tax­pay­ers be­cause they pre­vent the Unit­ed States from un­der­tak­ing do­mes­tic poli­cies to low­er drug prices with­out slow­ing down the pace at which new and bet­ter prod­ucts en­ter the mar­ket,” the re­searchers wrote.

“We find that if free-rid­ing abroad was re­duced and for­eign rel­a­tive drug prices re­flect­ed rel­a­tive GDP per capi­ta, to­tal in­no­va­tor rev­enues from those coun­tries would have been $194 bil­lion high­er in 2017, rais­ing glob­al rev­enues by 42 per­cent. Re­duc­ing for­eign price con­trols would in­crease prof­its and in­no­va­tion, there­by lead­ing to greater com­pe­ti­tion and low­er prices for U.S. pa­tients.”

The re­port large­ly echoes some of the crit­i­cism levied by the bio­phar­ma in­dus­try, which has long thrived in a lais­sez-faire US pric­ing ecosys­tem. In­dus­try in­sid­ers have per­sis­tent­ly ar­gued that gov­ern­ment in­ter­ven­tion in­to pric­ing will sti­fle in­no­va­tion, even as law­mak­ers work on a laun­dry list of dif­fer­ent pro­pos­als to low­er drug prices.

End­points News dis­cussed the find­ings of the re­port with Ru­ud Dob­ber, who heads up the bio­phar­ma­ceu­ti­cals busi­ness unit at British drug­mak­er As­traZeneca.

The in­ter­view has been con­densed and light­ly edit­ed for clar­i­ty.

On the is­sue of drug pric­ing, a re­cent re­port sug­gest­ed that Eu­rope is not pay­ing enough for Amer­i­can phar­ma­ceu­ti­cal in­no­va­tion. What do you think? 

I got the re­port last night; it was a sur­prise for the whole in­dus­try. What I saw this morn­ing, was that it was is­sued by the White House. You can ar­gue and — we are quite vo­cal about that — that per­haps prices in the Unit­ed States are a lit­tle bit too high.

But equal­ly, the prices in most Eu­ro­pean mar­kets are far too low. And that’s not a very pop­u­lar mes­sage to the Eu­ro­pean gov­ern­ments — but it’s a fact of life. And so in that sense, I was smil­ing a lit­tle bit when I saw the head­lines com­ing in. Be­cause in all my years as a Eu­ro­pean — as you prob­a­bly hear from my ac­cent — I’ve worked here for a long time and have been re­spon­si­ble for the Eu­ro­pean busi­ness.

It is from time to time very frus­trat­ing that gov­ern­ments are pre­vent­ing the ac­ces­si­bil­i­ty of drugs based on just eco­nom­ic mod­els and not look­ing at the pa­tients.

We have seen al­so, in this beau­ti­ful coun­try, the UK, a cou­ple of ex­am­ples where it is a painful ex­er­cise to get prod­ucts like Tagris­so, Lyn­parza, and Fasen­ra on the mar­ket, even though the im­pact on pa­tients is so in­cred­i­bly huge. Now, of course, as a com­pa­ny, we need to show our clin­i­cal val­ue, eco­nom­ic val­ue — but the dis­par­i­ty among Eu­ro­pean mar­kets, in the will­ing­ness to pay is huge. And in some mar­kets, prices are sim­ply too low.

Crit­ics will say that it’s less about the prices and more about the way that drugs are re­im­bursed in the two ge­o­gra­phies. In Eu­rope, there are large­ly sin­gle-pay­er sys­tems ne­go­ti­at­ing on be­half of cit­i­zens — and in Amer­i­ca, of course, it’s en­tire­ly dif­fer­ent and is much more com­pli­cat­ed than that. Isn’t this an ap­ples to or­anges com­par­i­son?

That’s a fair point. My team, our or­ga­ni­za­tion in the Unit­ed States, is deal­ing with hun­dreds of pay­ers. It’s al­so very fun­da­men­tal that the US is a free pric­ing mar­ket. And com­pe­ti­tion is lit­er­al­ly in the DNA of Amer­i­can so­ci­ety. And the com­pe­ti­tion is fierce. The mo­ment you have an­oth­er prod­uct in the same class of med­i­cines, I can tell you that those ne­go­ti­a­tions are tough. If the com­pe­ti­tion is giv­ing more re­bates, I’m al­most forced to do that. Oth­er­wise, I can get kicked out of the for­mu­la­ry po­si­tion.

In Eu­rope, in that sense, it’s a lit­tle bit eas­i­er if you have re­im­burse­ment, be­cause your price is an­chored, you can­not move it up. But if you have the same in­di­ca­tion (as an­oth­er prod­uct) and you’re not ex­pand­ing, the price re­mains the same more or less. So this is not an ide­al sys­tem.

Hav­ing said that I ac­tu­al­ly pre­fer the US sys­tem where ac­cess to med­i­cines is at a much faster and high­er lev­el than then in Eu­rope. Fin­gers crossed, if I’ve got can­cer, I would rather be treat­ed to the Unit­ed States then, for ex­am­ple, in most of the Eu­ro­pean mar­kets, be­cause those prod­ucts are sim­ply not yet avail­able.

Just to play dev­il’s ad­vo­cate — I clear­ly don’t make any­where close to what you make. So if I were in Amer­i­ca, I doubt I’d be able to af­ford treat­ment!

I think that’s the mis­con­cep­tion. So, first of all, there’s a large pop­u­la­tion that is com­mer­cial­ly in­sured. Like many com­pa­nies, our work­force in the Unit­ed States peo­ple has very de­cent in­sur­ance cov­er­age. Yes, there is a lit­tle bit of what is called the de­ductible. But all in all, most of the in­di­ca­tions, peo­ple can clear­ly af­ford (treat­ment).

Where the is­sue is a lit­tle bit is in Medicare and I’m first to ad­mit that. If you are a pen­sion­er — over 65 years of age — and you are con­front­ed with a de­ductible of $2,000 to $3,000 be­fore your in­sur­ance is kick­ing in, that’s painful. But af­ter that, the pa­tient is not pay­ing any­thing any­more. So there is an is­sue — and we have been very vo­cal as a com­pa­ny in say­ing that the re­bate sys­tem is not sus­tain­able. We are pay­ing bil­lions of dol­lars to the PBMs and we say give those the dol­lars back to the pa­tient.

(Ed­i­tors note: Drug man­u­fac­tur­ers of­ten ar­gue that they raise list prices in the Unit­ed States to ac­count for high­er re­bates that are ne­go­ti­at­ed by PBMs — and that net prices and what the pa­tient on av­er­age pays in cer­tain cas­es are in fact low­er. But when list prices in­crease, that hike is even­tu­al­ly passed on to in­sured pa­tients through co-pay­ments and pre­mi­ums. In ad­di­tion, there is a large pro­por­tion of unin­sured Amer­i­cans — ac­cord­ing to da­ta com­piled by the Kaiser Fam­i­ly Foun­da­tion, 27.9 mil­lion non-el­der­ly in­di­vid­u­als were unin­sured in 2018. Mean­while, even for the in­sured, with new­er more tar­get­ed ther­a­pies car­ry­ing stick­er prices in the hun­dreds of thou­sands of dol­lars, out-of-pock­et ex­pens­es can be rather ex­pen­sive.)

Late Fri­day ap­proval; Trio of biotechs wind down; Stem cell pi­o­neer finds new fron­tier; Biotech icon to re­tire; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

I hope your weekend is off to a nice start, wherever you are reading this email. As for me, I’m trying to catch the tail of the Lunar New Year festivities.

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Pfiz­er lays off em­ploy­ees at Cal­i­for­nia and Con­necti­cut sites

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Eliot Forster, F-star CEO (Rachel Kiki for Endpoints News)

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