At the end of Thursday's Forbes healthcare summit in New York, some of the pharmaceutical and biotech industries’ top executives – from Pfizer, Regeneron, Eli Lilly, Gilead and Astellas – sat down and were presented with a simple question: Why don’t people like you?
At first the conversation dovetailed away from the question, with John Milligan, CEO of Gilead, discussing his company’s hepatitis C cure Sovaldi (sofosbuvir) and the rapid increases in demand.
“What happened was a failure to understand how many people needed this immediately,” Milligan said.
Incoming Eli Lilly CEO David Ricks also discussed recent press on the exorbitant rise in his company’s insulin products, claiming “the reporting doesn’t match the facts.”
And Jim Robinson, president of Astellas’ American operations, also discussed drug prices and negotiations with pharmacy benefit managers to lower them.
But none of their responses quite matched the comments from Regeneron CEO Len Schleifer, who made clear at the outset that the lack of his peers' responses to the actual question posed by Forbes' Matthew Herper was exactly the reason why Americans don’t like pharmaceutical companies.
“The real reason we’re not liked is that we’ve used price increases to cover up the gaps in innovation. That’s just a fact,” Schleifer said.
Pfizer CEO Ian Read took issue with Schleifer’s assessment, setting off a series of back-and-forth volleys of slights.
Schleifer said it’s not a sustainable business model for companies to use double-digit price increases to increase revenues twice a year. Read said he disagreed.
Read said costs have risen as the amount of data submitted to the US Food and Drug Administration (FDA) has increased substantially over the last couple of decades. Schleifer shook his head in disagreement.
“We have to stop apologizing for the great products we produce,” Read said, noting that overall, the cost of pharmaceuticals as a percent of overall health spending has not risen in recent decades.
“You are not entitled to a fraction of the GDP,” Schleifer quipped back at Read.
At one point the conversation became so heated that Schleifer stood up to leave but sat back down (and later hugged Read at the end of the panel discussion), but not without jabbing at Pfizer’s decision to the pull the plug on its PCSK9 inhibitor, saying simply, “Theirs isn’t going to get approved and ours did.”
As far as what’s to be done moving forward on drug prices, Read, like others earlier in the day, pointed to high-deductible health insurance plans, saying the issue is one of “access and good insurance.”
Schleifer, meanwhile, said he’s against making it easier for a drug to be approved in the US (noting his company cannot compete now with the likes of Pfizer and Lilly), though innovation is what sets Regeneron apart.
The industry has to be funded with a lot of money and offer drugs at reasonable prices, Schleifer added, “If you don’t have enough innovative products, you’ll never make it work.”