Can pharma afford to cure patients instead of treating them?

March 27, 2017 ctheodoropulos

The President at Defined Health, Ed Saltzman, admits he likes to put in the last word. Even when one of the speakers he invited to the session at BIO-Europe Spring® delivered a terrific conclusion for the hour-long discussion.

“I want to be an optimist,” he said in the closing minute. “I have to believe the system will find a way to accommodate these durable therapies that does not dampen the rewards. But I am concerned that the business model is stuck in reverse gear. And the attention being paid to this subject across the ranks of big pharma is insufficient to really leverage and exploit all the innovation that is going on.”

Saltzman believes that therapies with a potential to deliver a durable response to disease and in some cases border on truly being a cure have taken a back seat in what he calls the noisy and increasingly rancorous controversy over drug pricing.

The CEO at Rexgenero, Joe Dupere, set the table for the panel discussion. His company is bringing forward a one-shot autologous cell therapy for critical limb ischemia that he said “is a durable response, whereas the traditional model for pharma is to treat chronic conditions over many, many years, which does not apply when we are going to give just one injection.

“We treated the first patients 10 years ago and these patients are still free of ischemia, so this is a long-term cure. But it is a cell therapy, and everything is new. Regulators don’t know how to deal with it, though they have been very flexible. And there are market access issues with a product that you give a patient once. And then there is the issue of price, which is critical for everyone in this area. The first consideration is to ask realistically what kind of price we get out of the authorities that will justify the investment.”

Thomas Zioncheck, who leads Business Development for Neuroscience, Ophthalmology, and Research Tools and Technologies at Genentech, agreed the industry needs to think through more flexible pricing models and offered a framework.

“Clearly we need to move from a volume-based model to a value-based one. Here I think about defining value in four quadrants,” he said.

“First we should ask what is the impact of the therapy and I like to think of value as being found in a disease modifying therapy. Then what are the quality of life indicators? Next, what is the benefit to the healthcare ecosystem of patients and physicians, but also the payers and hospitals? And finally, what is the benefit to society? We forget sometimes that we are treating more than the patient and that there is an impact on the caregivers and families taking care of sick people.

“We have seen examples where therapies have had a very strong impact, but we have also seen there is already pressure from payers who will say that is not enough,” he said.

“Instead, they are considering moving to a pay-for-performance model. Here where a drug does not work, they don’t pay. Where there are indications that are very expensive, perhaps this is a model we can move to,” he suggested.

The killer commentary that capped the panel session came from Georges Rawadi, the VP for Business Development and Intellectual Property at Celyad.

“The discussion reminds me a bit about early discussions about biologics,” he said. “Everyone was struggling about how to use antibodies. Today if you look to the five topselling drugs, they are biologics.

“The reason no one debates biologics any longer is that there was a precedent with a successful commercialization model. With that, everyone gained confidence and biologics attracted a lot of investment. In gene editing it was the same. No one wanted to deal with the technology until gene editing found a home with a clear application. Suddenly it became the technology everyone had to have,” said Rawadi.

“This is what we are missing in the cell therapy space. We need a success story to drive the whole field. This will end a lot of the debate and discussion because we will have a path, a model everyone can follow,” he concluded.


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