PhRMA drums out 22 mem­bers who didn’t make the cut as ma­jor league R&D play­ers

The shake­out at PhRMA is over.

Af­ter be­ing swept up in­to the con­tro­ver­sy that sur­round­ed a cou­ple of its top mem­bers with a no­to­ri­ous­ly itchy trig­ger fin­ger for sky high prices on some unim­pres­sive ther­a­pies, the in­dus­try lob­by­ing group has now com­plet­ed its re­view of their mem­ber­ship rules, com­ing up with some cri­te­ria on who can qual­i­fy for the club.

In a state­ment out to­day, PhRMA notes that mem­bers will have to de­vote at least 10% of their rev­enue to R&D with a min­i­mum re­search bud­get of $200 mil­lion a year — and they have to have main­tained that track record over the last three years.

I’ve al­ready re­port­ed that Marathon and Mallinck­rodt, two com­pa­nies that have found them­selves in the thick of the fight­ing over what they charge for drugs and how they have ben­e­fit­ed from a mo­nop­oly, bowed out ahead of the change-up. Marathon is even wind­ing down op­er­a­tions, as End­points News first re­port­ed.

There are a to­tal of 22 full and as­so­ciate mem­bers who didn’t make the cut on the new R&D cri­te­ria, in­clud­ing the whole tier of 15 biotechs in the as­so­ciate cat­e­go­ry, which is be­ing elim­i­nat­ed.

Joaquin Du­a­to (Im­age: End­points News)

“By putting in place new mem­ber­ship cri­te­ria, the board is send­ing a clear mes­sage that be­ing a mem­ber of PhRMA means be­ing com­mit­ted to do­ing the time-in­ten­sive, sci­en­tif­i­cal­ly sound re­search it takes to bring bold new ad­vances in treat­ments and cures to pa­tients,” said Joaquin Du­a­to, PhRMA board chair­man and world­wide chair­man, phar­ma­ceu­ti­cals, John­son & John­son.

J&J is one of a group of Phar­ma gi­ants that typ­i­cal­ly spend about 15% or more on R&D, with­out any in­di­ca­tion that will shrink any­time soon. Some of the ma­jors go much high­er than that.

The as­so­ciate mem­bers who got cut in­clude Bio­Marin $BM­RN, which is think­ing of ap­ply­ing as a reg­u­lar mem­ber. The com­pa­ny eas­i­ly qual­i­fies un­der the new rules.

A spokesper­son told me:

We are sup­port­ive of PhRMA’s ef­forts on be­half of the phar­ma­ceu­ti­cal in­dus­try.  Bio­Marin was pre­vi­ous­ly a mem­ber of PhRMA as a “Re­search As­so­ci­ate Mem­ber.” PhRMA has dis­con­tin­ued the “Re­search As­so­ci­ate” mem­ber­ship cat­e­go­ry, and at this time, Bio­Marin is not a mem­ber of PhRMA. As out­lined by PhRMA, Bio­Marin meets the new cri­te­ria for full mem­ber­ship. Bio­Marin is now con­sid­er­ing whether to seek full Mem­ber­ship sta­tus from the PhRMA Board. Bio­Marin in­vest­ed more than $600 mil­lion in Re­search and De­vel­op­ment in 2016, which is about 60% or our rev­enues. Bio­Marin is al­so a mem­ber of BIO.

PhRMA CEO Stephen Ubl launched a PR cam­paign at the be­gin­ning of the year to try and re­form the in­dus­try’s tat­tered pub­lic im­age. Now all of its mem­bers can be ex­pect­ed to play the role of am­bas­sadors of ma­jor league drug in­no­va­tion — or try to.

Here’s the list of com­pa­nies who no longer qual­i­fy for mem­ber­ship in Du­a­to’s peer group.


AM­AG Phar­ma­ceu­ti­cals
Hori­zon Phar­ma
Jazz Phar­ma­ceu­ti­cals
Lea­di­ant Bio­sciences
Mallinck­rodt Phar­ma­ceu­ti­cals
Orex­i­gen Ther­a­peu­tics
The Med­i­cines Com­pa­ny

As­so­ci­ate Mem­bers

ACA­DIA Phar­ma­ceu­ti­cals
Aerie Phar­ma­ceu­ti­cals
Avanir Phar­ma­ceu­ti­cals
Bio­Marin Phar­ma­ceu­ti­cal
CSL Behring
Es­pe­ri­on Ther­a­peu­tics
Fer­ring Phar­ma­ceu­ti­cals
Gri­fols USA
Ipsen Bio­phar­ma­ceu­ti­cals
Marathon Phar­ma­ceu­ti­cals
Sh­iono­gi Inc.
Su­cam­po Phar­ma­ceu­ti­cals
Ther­a­vance Bio­phar­ma
Vi­for Phar­ma

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