From EpiPens to insulin in the spotlight, the US public doesn’t particularly love pharmaceutical companies at the moment.
At the Forbes Healthcare Summit on Thursday, a group of big pharma and biotech CEOs were asked to contemplate why the industry isn’t liked — and things got tense.
The panel featured Gilead CEO John Milligan, Pfizer CEO Ian Read, incoming Eli Lilly CEO David Ricks, Astellas Americas President Jim Robinson, and Regeneron CEO Leonard Schleifer.
After some chatter about middlemen and adding value, Schleifer had his own take on the answer.
“I think you’ve just seen why our industry isn’t liked. You’ve asked a question why we’re not liked, we are a room full of people who are biased to like us, and nobody answered the question why we’re not liked,” he said.
“We dispelled of some of it last year, because we blamed it on the extremists, the people who come in, dial up a product that’s off patent, raising price ten-fold and they’re evil-doers, that’s why we’re not liked,” he continued. “But the real reason we’re not liked, in my opinion, is because we as an industry have used price increases to cover up the gaps in innovation. That’s just a fact.“
chleifer continued by saying that it’s important for drug companies to bring value through innovation, rather than acquisitions or price increases. “That’s not the business I want to be in,” he said.
Pfizer CEO Ian Read took issue with what Schleifer said, arguing that there are different business models in the industry, and taking a subtle jab at the difference in size between Pfizer ($192.23 billion market cap) and Regeneron ($38.79 billion market cap).
“The total cost of drugs as a percentage of healthcare has not changed in two decades,” he said.
Schleifer replied: “You are not entitled to a fraction of the GDP.” A shouting match erupted onstage until another member of the panel interjected, suggesting that drugmakers needed to have a unified message.
The two picked up the debate later in the panel, when Schleifer pointed to the price increases happening in rheumatoid arthritis drugs as not bringing additional value to patients.
Read took a macro-level approach in his response.
“For the ecosystem, we’ve taken a 2.8% net price increase in 2015. I don’t see anything outrageous about that,” he said. “You can pick individual drugs … but you have to look at it system-wide.”
Toward the end, the two did see eye-to-eye on the idea that pharmaceutical companies don’t get the prices they deserve in Europe. Instead, people in the US end up paying a disproportionate price.
At the end, when the group left the stage, Read and Schleifer embraced.