|AstraZeneca CEO Pascal Soriot|
AstraZeneca ($AZN) CEO Pascal Soriot, under pressure to boost the U.K. company's financials after thumbing its nose at a $100+ billion takeover by Pfizer ($PFE), is sniping at U.K. regulators for refusing to pay for a new ovarian cancer treatment that the U.S. and Europe have approved. He says the denial by England's cost watchdog for Olaparib, sold as Lynparza in the U.S., has the government talking out of both sides of its mouth: saying it intends to be a global center of innovation, then refusing to recognize it when it walks through the front door.
In trials, the first-in-class cancer drug extended life expectancy by 11 months for some patients with fewer side effects than other treatments. But not only did the National Institute for Health and Care Excellence (NICE) recommend against its use by the National Health Service, the country's Cancer Drugs Fund (CDF) also declined to approve it. Both agencies said the drug's benefits were not enough to justify its £4,200-a-month price cost, the Financial Times reports.
To that Soriot responded curtly: "On that basis we should stop all cancer research in the world," FT reports. "How can a government say they want this country to be an innovation center with a strong focus on life sciences, and yet when we discover new innovation it doesn't find a market?"
Olaparib belongs to a new class of treatments, poly ADP-ribose polymerase (PARP) inhibitors, which are designed to zero in on cancer cells and leave a patient's normal cells untouched. The FDA gave it an accelerated approval in December, a day after the EU approved it. AstraZeneca ($AZN) expects Olaparib/Lynparza to bring in $2 billion a year in peak sales, something it needs if the company is going to hit the $45 billion in revenues that Soriot promised it could achieve when he was convincing shareholders last year that a buyout by Pfizer was not in their best interests.
But as a result of the decisions on Olaparib, the drug may not be available to cancer patients in the U.K., and Soriot is not alone in saying that is a mistake. Professor Peter Johnson, chief clinician of Cancer Research UK, agreed that "The NHS can't afford to ignore important innovations like this," pointing out the country's survival rates for ovarian cancer already lag behind much of the developed world. But he also urged compromise on pricing by both sides.
Soriot acknowledged to FT that he expected regulators to push back against some of the high prices that the newest targeted cancer drugs are tagged with, and he said the company is willing to look for pricing programs to make them available. But he said the company would not be bullied into a pricing war, declaring, "Innovation has to be rewarded."
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