Facing a multifront assault this fall from Republican and Democratic presidential candidates, BIO and PhRMA are arming up with new talking points. By pointing to the cost of pipeline failures--and deflecting some blame to insurers--the groups hope to reshape the drug-pricing conversation.
At BIO's conference in San Francisco on Wednesday, CEO Jim Greenwood said the biotech industry group is “fighting back” against being an “easy scapegoat for the real and growing problem of patient access." Instead, he argued, it’s insurers that are responsible when a patient is accepted into a policy but then denied treatment.
“The truth is that drug prices aren’t rising nearly as fast as many insurance company premiums, deductibles, copays and coinsurance,” he said. “That’s a fact.”
In a more familiar stance, Stephen Ubl, head of the pharma lobby group PhRMA, said industry should point out that 90% of clinical research is in programs that fail in the end; only 10% of biotech companies turn a profit, he told Bloomberg. That strategy might not turn the tide of public perception, Ira Loss, a Washington Analysis senior healthcare analyst, said, “but it’s certainly a story that needs to be told,” he explained, as quoted by the news service.
To give its campaign legs, BIO will set up a "rapid response shop in Washington to beat back misinformation," Greenwood told the crowd, and will arm its members with fact sheets to back the industry's side. That'll empower 1,200 companies and organizations to fight on the industry's behalf, The Hill reported, as BIO itself deploys an ad campaign and works a "door to door" drive on Capitol Hill to converse with members of Congress. The biotech industry group won't be alone, as PhRMA has launched a parallel industry-image effort and Pfizer this week unveiled an ad showcasing the tricky path of drug R&D.
While industry representatives cite figures backing their arguments--Greenwood said net price growth for branded drugs last year was a mere 2.8%--a bright public and political spotlight remains on biopharma, and it won’t let up in the coming months. According to a new report from Morgan Stanley analysts, the November presidential election is one major development expected to shape pricing perceptions yet this year.
Far more is at stake than the industry's public image, too. New legislation and policy changes could put a crimp in pharma's long-enjoyed pricing freedom, and that, in turn, would be a direct hit to drugmakers' revenue. Biopharma is fighting back, and the industry will be looking to friendly politicians to help tell a more sympathetic story.
Democratic presidential candidate Hillary Clinton, if elected, is seen as more of a threat to biopharma than her opponent Donald Trump, the Morgan Stanley analysts say. That’s based off of 25 years of drug pricing criticism, the analysts say. However, both party's candidates have voiced support for letting Medicare negotiate drug prices, and the conversation could deepen over the course of the campaign.
Meanwhile, BIO and PhRMA are contending with a ballot initiative in California that seeks to allow the state to buy drugs at VA prices and a Medicare Part B demonstration project that could pose a reimbursement threat.
BIO and PhRMA’s tone isn’t an unfamiliar one to industry-watchers--the groups have been working for months to distance research-based biopharmas from those such as Turing Pharmaceuticals, which ignited the drug pricing firestorm last fall with a 5,000% price hike on a 62-year-old toxoplasmosis med. In his comments this week, Greenwood called such companies "outlier hedge funds masquerading as biotech firms," but what remains to be seen is how much of a foothold the message gains with public perception.
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