The week before the craziness known as J.P. Morgan 2020 began, more than 300 biotech and biopharma leaders signed onto the “New Commitment to Patients” published by STAT, promising to put patients first when it comes to treatment access and pricing comprised.
Aside from the sad irony that such a commitment needed to be stated at all, the open letter was a sign that at least some in the industry recognize that more public accountability on pricing is urgently needed.
If we want real change, though, symbolic gestures (at the end of the letter an asterisk indicated that the commitments were the signatories’ only and did not bind their companies to act accordingly) aren’t going to cut it.
What will it really take for the industry to flip the trend, restore public trust and protect the industry and patients from knee-jerk policies that could irreparably harm innovation and inadvertently limit access to medicines? If it isn’t too late already, how do we make this “New Commitment” the new reality?
Nearly two years ago, in a First Opinion in STAT, I urged the pharmaceutical industry to consider the approach used successfully decades ago by another sector facing similar reputational and related policy and market challenges: the chemical industry.
The core of my argument, then and now, is that the pharmaceutical industry doesn’t have a pricing issue. It has a trust issue. And it won’t successfully address the pricing issue until it tackles the trust issue. And unless it engages directly, responsibly, and transparently with patients, caregivers, and other disease community stakeholders, it won’t move the needle on trust.
The chemical industry understood the need to earn trust first, and developed and adopted a program called Responsible Care. It featured commitments to transparency, public engagement, and responsible behavior that signatories were required to adopt and live by. At the heart of the program were community advisory panels. They created a forum for company leaders and personnel to meet regularly with stakeholders, explain how plants operated, describe their environmental impacts and the like, and also learn about the public benefits of their products.
Can the pharmaceutical industry still shift direction and restore public trust in time to secure its future? Maybe. But it needs to move quickly, cohesively, and substantively. And biotech will have to lead the way because pharma is too dug in to move quickly. Its relationships with patient communities are more deeply damaged than biotech, it has too much at stake in protecting margins and market share for aging drugs and dwindling pipelines, and it is too heavily invested in advertising and trade group lobbying campaigns to quickly pivot to a program like Responsible Care.
Nimble and innovative biotechs, however, are reshaping the therapeutic landscape. The majority of late-stage therapies in the pipeline, including many of the advanced, one-time regenerative medicines, emerged from biotech. These companies are actively exploring alternative value and pricing models, and have a significant stake in determining what the new normal looks like.
The list of signatories to the “New Commitment” included those affiliated with prominent venture capital companies and others with influence at the board level among emerging and commercial-stage biotechs, as well as CEOs from biotech companies. Board-level involvement is essential because boards need to support CEOs in pursuing pricing models that reflect real value to patients and don’t simply exploit market trends. Boards also need to embrace and invest in company commitments to meaningful, measurable, and probably uncomfortable boots-on-the-ground efforts to engage directly with disease community stakeholders.
What needs to happen now? Since several hundred leaders have publicly committed to key principles, we have a rolling start. It wouldn’t be too big of a leap to put a few key details behind those commitments that companies could live by — like standards for transparency, agreements on responsible price hike limits for marketed drugs, and a patient-centered value framework for new therapies defined by a multistakeholder process — create a governance model, and formalize a community-engagement platform based loosely on Responsible Care or other successful initiatives.
The leaders of the “New Commitment” initiative could then take that model to their own and other companies, venture capital firms, and PhRMA, BIO, and other organizations and coalitions to seek formal adoption, establish a sustainable operating model, and create public reporting and enforcement mechanisms.
Will that be easy? No. But the costs of failure are simply too high for patients as well as for industry not to try.
Craig Martin is the president and chief engagement officer of Rithm Health, a consultancy working with biotech, biopharma, and health tech organizations. He once worked with participating companies and industry organizations as Responsible Care took hold in the U.S.