Pharma needs to slap some raw steak on its black eye, Dr. Roy Vagelos said during a speech last week. Pharma's elder statesman--and ex-Merck CEO--says the drug industry has lost goodwill and credibility, and needs to get to work to repair its reputation.
Most drugs are a "bargain," he said; even pricey meds can be a good value. But some products are too expensive, their prices out of step with their value. Those price tags will bring government price controls crashing down on the industry, he predicts. If the feds don't step in, market forces will. He wasn't sympathetic to the "drugs are expensive because R&D is expensive" argument, either. "I don't care what the cost is, it's inappropriate. The industry has a black eye. And the market will correct that."
Drug companies could regain a lot of goodwill by lowering prices themselves, Vagelos predicted. Pharma should focus especially on getting new, life-saving meds to the developing world posthaste. The humanitarian gesture would boost drug companies' images in emerging markets, which are poised to become huge growth areas for the industry. It would also help Big Pharma recover its "credibility," he said.
- see the coverage at Mike Huckman's CNBC blog
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