Biopharma’s two key trade groups offered to cooperate with President Trump following his meeting yesterday with industry leaders in which he committed to overhauling the FDA and shortening the approval time for new treatments, while restating his call for lower prescription drug prices.
Trump was joined by Vice President Mike Pence and Rep. Greg Walden (R-OR), chair of the House Energy and Commerce Committee, during the meeting, characterized by the administration as a “listening session.” While hearing industry concerns, the president also pressed for biopharmas to repatriate to the U.S. operations that have been shifted to lower-tax countries overseas.
In statements yesterday, the Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Innovation Organization (BIO) emphasized areas of agreement with Trump while pledging to resolve differences.
“We discussed many areas of common ground, including: Advancing stronger trade agreements to level the playing field with countries around the world; reforming our tax code to spur investment and job creation here in the United States; and removing outdated regulations that drive up costs and slow innovation,” PhRMA president and CEO Stephen J. Ubl said.
“We believe if these policies are enacted, it will translate to up to 350,000 new jobs over the next 10 years as a result of growth in the biopharmaceutical industry,” Ubl added.
That would amount to a 41% increase in jobs directly within the industry, based on the 854,000 jobs counted by PhRMA across biopharma, according to the group’s website. Employment swells to about 4.4 million jobs when “indirect” positions are included.
Ubl also pledged to cooperate with Trump’s administration on addressing the president’s key complaint about biopharma—the sky-high and rising price of new medicines.
“You folks have done a terrific job over the years, but we have to get prices down for a lot of reasons. We have no choice. For Medicare, for Medicaid, we have to get the prices way down,” Trump told the biopharma leaders, according to highlights of the meeting posted on The White House’s website. “U.S. drug companies have produced extraordinary results for our country, but the pricing has been astronomical for our country.”
Until now, industry has blamed high drug prices on the need to recoup high development costs. In March 2016, the Tufts Center for the Study of Drug Development updated its development cost estimate for a new drug to $2.558 billion through approval—climbing to $2.87 billion when post-approval studies are figured in. However, others have offered much higher, and lower, cost estimates for drug development.
Trump blamed high drug development costs on the time and expense of FDA regulations and promised the industry that changes were on the way.
“We’re going to streamline the FDA,” Trump declared. “We have a fantastic person that I think I—we’ll be naming fairly soon. He’s going to streamline the FDA and you're going to get your products either approved or not approved but it's going to be a quick process. It’s not going to take 15 years.”
Responded Ubl: “Our industry takes seriously the concerns raised about the affordability and accessibility of prescription medicines, and we have expressed our commitment to working with the administration to advance market-based reforms.”
Those reforms, say PhRMA and BIO, should promote pricing based on the value of treatments to patients, as well as offer incentives toward greater entrepreneurial risk, especially for smaller companies.
“The vast majority of our member companies are entrepreneurial startups working on cutting-edge research and development that is leading the way to the next generation of biomedical breakthroughs and cures,” BIO stated. “They rely heavily on massive amounts of private capital, invested over a decade or more, to do the incredible work that they do—and therefore are particularly sensitive to changes in public policy that can increase the risk of such investments. We are pleased that the President clearly understands this dynamic.”
BIO indirectly urged against cost curbs by citing the industry’s clinical as well as commercial success without them. During the presidential campaign, Trump decried the price of drugs while Hillary Clinton called for containing drug price increases following the 5000% hike in the price of toxoplasmosis drug Daraprim® by Turing Pharmaceuticals and then-CEO Martin Shkreli—a prospect that touched off an investor sell-off of shares in biopharmas.
“Policies that incentivize biomedical innovation, reward risk-taking, and avoid heavy-handed price controls have allowed America's biopharmaceutical companies to produce more new cures and treatments than the rest of the world combined. They have made the U.S. biopharmaceutical industry an engine of economic growth and good jobs,” BIO stated. “Our industry has only scratched the surface of what is possible when it comes to improving the lives of patients and transforming our nation's healthcare system. We look forward to building on our proven track record in the coming years.”
PhRMA and Ubl urged Trump to instead pursue reforms that allow companies to negotiate payment deals for treatments “based on the value they provide to patients and our healthcare system. We look forward to working with the administration and Congress to advance solutions that promote economic growth and job creation and create a more competitive health care marketplace.”