The former CEO of Novartis made no bones about the fact that a difficult phase looms ahead with respect to high drug prices in a webinar Thursday.
“I think we are headed toward a crisis in terms of healthcare systems figuring out how to pay for these drugs,” said Joe Jimenez, who is currently CEO of Oakland-based biotech investment firm Aditum Bio, in webinar with other panelists Thursday.
In fact, high drug prices are likely to come under political scrutiny regardless of who wins the U.S. presidential election next week. Many pharma and biopharma companies today are focused on gene and cell therapies that target less-common conditions and thus command high prices. But the prices are not sustainable, the panelists said.
The pharma industry can counter the critics by telling better stories about its products’ long-term benefits and by taking steps to cut costs, according to the panelists, which included Kathleen Sebelius, who was secretary of the U.S. Department of Health and Human Services under President Barack Obama and others.
They were were optimistic that pharma could find ways to address the financial challenges without eliminating the incentives for research and innovation.
Areas ripe for change include clinical trials, panelists said, noting that the Covid-19 pandemic has helped show the way. The pandemic, for example, has spurred efforts to streamline the development of vaccines and treatments.
“We have to rethink clinical trials,” Sebelius said. “They are too cumbersome, too costly and too slow,”
Panelists suggested artificial intelligence, digital tools and advanced analytics might speed things up – which could help lower costs once drugs reach the market.
At the same time, the Food and Drug Administration will have to shore up its reputation for scientific competence, she said. These come after allegations of political meddling by the Trump administration in the ongoing Covid-19 vaccine and drug approvals, said Sebelius, a former Kansas governor who endorsed Biden during the Democratic primary.
Another area in need of change is the marketing and commercialization of drugs. Panelists said the days of massive sales forces are likely over.
It’s not clear what will replace them but companies can and should run small-scale experiments to see what works, mimicking the fail-fast approach of tech companies, said Kabir Nath, senior managing director of the global pharma business for Japan-based Otsuka.
Whatever the shape of the future sales force, the industry should work to explain the long-term benefits of its products. A therapy that effectively cures a rare disease may look costly. But if it works, it could save on other costs, such as hospitalization.
“We have to get better at those candid conversations,” said Jim Lang, CEO of Eversana, a Milwaukee-based company that offers a commercial-services platform for drug companies.
In addition, the panelists said, the pendulum eventually may swing back toward therapies that target more widespread, chronic problems, like obesity and substance abuse.
These drugs may cost less but the returns will be just as good due to the large number of people taking them, said Jimenez, adding that advances are likely to come from startups rather than big pharma.
Photo: Devrimb, Getty Images