WASHINGTON — No one asked Paul Hastings what he thinks about Speaker Nancy Pelosi’s major new drug pricing legislation, or how it might affect his company, Nkarta Therapeutics. No one asked Bassil Dahiyat, the CEO of Xencor, or Dr. Barbara Weber, who helms Tango Therapeutics, either.
But they’re all scared stiff.
They and other leaders of small biotech companies — most of whom stick to science, not politics — are speaking up now because they are uniquely worried that the policies included in Democrats’ marquee bill will dry up the venture capital funding that drives their industry and, in turn, make it impossible for the similarly small startups that turn basic research into new medicines to get off the ground.
Thanks so much for this important perspective. We must find a way to remind the general public where innovative drugs come from. Ask not why US healthcare consumers pay so much but instead why do consumers in other countries with price controls pay so little? Price controls without other mitigations will certainly dampen the innovation that comes from small biotech companies predominantly located in the US. There’s no sugar coating it: this would be a disaster for our industry. This is not about insulin or blood pressure meds that are 8th to the market — feel free to go after price gouging and bad behavior from pharma bros or the like with those products. This is about Alzheimer’s Disease, Parkinson’s Disease, Dry AMD, Autoimmune Disease, etc. Does anyone think these problems will solve themselves?
As said in the article, most of small biotech companies do not have a product on the market. There is no reason to assume that small biotech companies will also fall into that scheme and become culprit. If one fears that this is the only path to go, maybe it can be prevented before it happens with better and more accessible funding. The real problem here are the big pharmas that jack up the price of their US products that are already on the market outrageously while they sell the same in Canada at 80% cheaper. Take the price of insulin, a vial in Canada sell for ~$50. The same vial in the US sells for ~$350. Why is that? It is also of interest to mention that the big pharmas in the US invest little to nothing to support small biotech. I can say that small biotech would be happy to see the price of their products be regulated if they could have access to a Novel Medicine Development Fund that could come from big pharmas having to supply such a fund with 2-3% of their profits. The task to develop would be much easier, and the small biotech industry would develop and grow substantially from such an access to capital. There is a wide open field of developing better medications that cure and regenerate instead of just tackling the symptoms and hook up the patient on a lifetime subscription that comes with side effects that often jeopardize the benefits. The solution to this problem resides in more and better medications funded with a National Novel Medicine Development Fund. There is a lot of smart scientist entrepreneur talents out there. There is just little to no funding. The SBIR funding is totally inefficient. The VCs do not invest pre IND and fund less than 5% of the novelties. The small biotech industry cannot counts on that to grow. The result is less competition, market monopoly, and outrageous pricing.
From a purely utilitarian perspective, to estimate the social benefit from new drugs, we have to take into account the pricing issues preventing much of the public from accessing them as well as the economic harm done to patients who pay up, and the indirect harm across the country due to the impact on rising health insurance premiums. Since biotechs are pretty good at pushing pricing on new products up to the willingness-to-pay threshold, I’d argue that the marginal social benefit of new biotech products is, well, marginal. Bottom line: VCs represent investor perspective, not public health or patient perspectives.
Since others brought up treatment of sickle cell disease: another pricing quandary. Since 2001 has been known that using L-citrulline (0.1 g/kg) as a precursor to L-arginine and the vascular production of NO has a tremendous beneficial effect for these patients. However, a month’s supply can be had at GNC for less than $25. Thus, no one is willing to do large scale clinical trials and no company is investing in advertising, and it is illegal to ascribe a medical use on the bottle.
Similarly, half-dose chlorthalidone works as well as mono therapy for hypertension as any drug out there. It is as cheap as dirt so no one promotes it. There are numerous examples where almost forgotten inexpensive drugs work perfectly well or even better than the latest high-priced chemical.
Comments are closed.