The U.S. Pharmaceutical Industry — Between A Hard Rock Of Hope And A Heartbreak

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

Two weeks ago at the 2014 PhRMA annual meeting in Washington, D.C.  I posed a question to Suleika Jaouad immediately following the recounting of her personal battle with cancer. Jaouad, a funny, articulate, and courageous woman, demonstrated wisdom beyond her 23 years — pausing in contemplation before providing a thoughtful response to my query. During her encounter with cancer, had she experienced something which turned out to be an unexpectedly pleasant surprise? The author of the Emmy Award-winning New York Times Series, Life Interrupted, delighted the audience with her response involving a bone marrow transplant with her brother as the donor. The outcome of the procedure resulted in her DNA being changed to match that of her brothers. She had neither expected this, nor that as a result of this DNA change, she would pick up all of his allergies, as well as lose her own, which included a lifelong allergy to peanut butter. Suddenly no longer allergic, she has been relishing the sampling of all sorts of peanut butter confectionaries. She received a big laugh from the audience when she suggested that she might write a DNA episode for the CBS television series, CSI: Crime Scene Investigation. This was but one of the powerful experiences gained from attending this year’s PhRMA meeting, appropriately themed — from hope to cures.

From Hope To Cures
During Jaouad’s presentation, she took time to acknowledge and thank Bob Hugin, who happened to be sitting immediately behind me and Life Science Leader magazine executive editor, Wayne Koberstein. Hugin is the CEO of Celgene (NASDAQ: CELG), which manufactures the product Jaouad credits with extending her life, and providing her hope.

As the room began to empty, I was approached by a young woman who introduced herself saying, “Hi. I’m Jessica Melore. I’m a cancer survivor.” Turns out she has survived more than cancer. Melore was a high school tennis player who suffered a massive heart attack, which led to a heart transplant. Further, she had to have a leg amputated, in addition to having cancer. Despite being faced with these adversities, she didn’t let these stop her from graduating with high honors from Princeton. Today Melore works as a motivational speaker, and she served as one of the afternoon session speakers, sharing a message of hope and inspiration.

The previous day I was surprised by the 2006 Nobel Prize winner in physiology or medicine, Craig Mello, who concluded his forward-looking medical science presentation with an unexpected slide — that of his daughter Victoria. Mello explained to the audience how she had developed type 1 diabetes at a little over a year old. Following his talk, I told Mello that I too have concluded presentations with a picture of my daughter. In response, he shared the story of when the Nobel Prize committee called to tell him that he and his colleague, Andrew Fire, had won the award. His wife answered the phone, and thinking it was a crank call, hung up on them. It was early in the morning, and Mello was actually checking his daughter’s blood sugar at the time. All three of these people and I have something in common — hope, thanks to the U.S. pharmaceutical industry.

How Much Is Your Kids Life Worth?
After hearing Jaouad, Melore and Mello speak, I couldn’t help but recall my own experience of when the doctor who was operating on my daughter came out of surgery and informed me of her diagnosis. I wasn’t really hearing or even understanding when he said something about ulcerative colitis (UC) or Crohn’s disease. My perfect kid scored “10” on the APGAR test when she was born. She couldn’t possibly have something wrong with her! I was completely unprepared for anything but good news. In a way it was. It was not cancer. There were medications which could treat it, and I would, and do, gladly pay for them.

As a sales representative with Mead Johnson Nutritionals some 20 years ago, I recall riding in an elevator carrying a case of Nutramigen, a hypoallergenic infant formula for children who are sensitive to intact proteins. It is pronounced new-tram-eh-jen. A lady in the elevator said to me, “That New-tra-my-jen is liquid gold.” “What do you mean,” I said? “It’s sooooo expensive,” she replied. “That was the only infant formula my daughter could tolerate.” “How is she doing,” I asked. “Great,” she smiled giving her teenage daughter a hug. I smiled and said, “Guess it was worth every penny,” as I stepped off the elevator. I share this story because during the PhRMA meeting I tweeted and retweeted the various happenings and hope-filled stories. Yet I soon found my Twitter handle being tagged into Tweets asking when PhRMA folks were going to discuss making their drugs cheaper. I realize that for every case of hope, there is an example of heartbreak, and sometimes it’s financial. But since when did the pharmaceutical industry, which has its faults (as do we all), deserve to be vilified for creating cures and turning a profit?

Victims Unite In Vilifying Pharma
I had family members personally impacted by Hurricane Katrina, so I watched news reports with great interest. People were shown blaming the government for their dilemma. They were victims, and as such, not responsible for their plight. But this “Katrinaization” of our society, along with the vilifying of the pharmaceutical industry, has its roots dating back to the 1990s and the first attempt at nationalized healthcare. The process has de-valued an industry which has given so much.

An article entitled, America’s Most Generous Companies, would have you believe that not one pharmaceutical company gave enough back to society through charitable donations to be listed among the top 10 most charitable companies. You will see the likes of Wells Fargo (1), and Wal-Mart (2) on the list. But near the end, among little fanfare, when you read which company is the most charitable, you find Pfizer, which gave $3.1 billion in cash and products and top the list for a fourth consecutive year. I know some of you are saying, “Stop giving so much away and just lower your prices and make your drugs cheaper.” They are, by helping to provide drugs at reduced prices, even free, to those in need through charitable giving. Besides, you could make the same argument to Wal-Mart in asking for cheaper prices and services. When a company develops a drug, and we think it is priced too high relative to the alternative — sometimes death — we chastise and vilify pharmaceutical companies. For example, in March, democratic Congressman Henry Waxman, principle author of the Orphan Drug Act (ODA), which incentivized the development of rare-disease drugs, wrote a letter demanding Gilead Sciences justify the price of its hepatitis C drug. Seems like grandstanding and pandering to the masses after the fact. To my knowledge, a drug price forecast is not a requirement for any company to participate in any of the government-created drug development incentive programs. Perhaps it should be. But the incentive Gilead pursued was that of a breakthrough therapy designation, and that is exactly what was created — a cure for Hepatitis C. No one said, “And oh, by the way, we want it cheap.” If that is what you want, then incentivize it as such — proactively.

Another example of the vilification of our industry occurred recently when CNN and other media outlets were vilifying Chimerix (NASDAQ: CMRX) CEO, Ken Moch, for refusing to provide a $50,000 drug to a dying child. Keep in mind the drug has not yet been approved by the FDA, and the 50-person company racing to get this drug to market has been operating in the red since its 2011 founding. When asked how he felt about the possibility of the child dying Moch said, “Heartbroken.” Knowing Ken, I believe him. His rationale was if he gave it to one person, he would need to make it available to all. Amazingly, Moch figured out a solution, creating a 20-patient clinical trial. Art Caplan, director of the Division of Medical Ethics at NYU Langone Medical Center stated, “The fact that this flood of public sentiment pushed this to happen shows that we are now firmly in the age of patient appeals through old and social media.” This is true. But really, did Moch (who resigned within a month of the controversy) have much of a choice with Chimerix executives being threatened with physical harm. Let’s keep in mind that there is a difference between public outcry and threats, while we are busy playing the role of victims to companies striving to develop life sustaining drugs.

Grab Your Pitchfork Or Hula Hoop – Whatever Is Handy
The pharmaceutical and biotech industries contribute a lot more to our society beyond drugs, yet rarely get the credit they deserve. The U.S. pharmaceutical industry employs 810,000 people directly, and 3.4 million indirectly, and supported $789 billion in U.S. economic output in 2011. Half of the cancers are now considered curable today. HALF! Yet until very recently, the Hula Hoop and a life-sustaining drug would have the same patent protection — 20 years. Well not really, if you consider how long it would take to bring a Hula Hoop to market, versus a drug, which on average takes 12 years to develop, leaving you eight years of patent protection. At a cost in excess of a $1.3 billion per successful drug approval, and only one in 5,000 drugs in development ever successfully making it to market, it is obviously a high-risk business. That’s why we have created a variety of government incentives to make it worthwhile for companies being willing to invest time and money to fail on 4,999 out of 5,000 attempts.

If we continue to wage war on our industry only in the name of cheaper cures and fail to strengthen, not weaken, our drug patent protection, we will witness a repeat of history. Not long ago we found ourselves scratching our heads asking, “Where did all the manufacturing jobs go?” Only this time, we will be saying it about the even higher-paying, non-union jobs in the pharmaceutical and biotech industries. You may find this report interesting if you want to know where the drugs of the future will be manufactured, or better yet, where your next-door neighbor may soon be house hunting.