The Innovation-Competition-Affordability Connection and its Importance to Patients
One of the biggest headlines in healthcare this month occurred when the Food and Drug Administration gave approval to a new treatment for Alzheimer’s disease developed by Biogen. This is a development that brought hope to the millions of individuals and their loved ones who have or will have a terrible and complex disease that is taking an increasing toll on our society. The Biogen approval speaks to the importance of biomedical research and development in this country as well as the FDA’s Accelerated Approval Pathway program, which makes novel treatments available in areas of unmet need.
But the good news is not without controversy. There is already criticism of the recommended market price of this product. In that light, I found the blog post below from Genentech CEO Alexander Hardy to be relevant and insightful. As he points out, the most effective pathway to achieve greater affordability for breakthrough medicines is to encourage more innovation and the development of competing therapeutics. Remember the firestorm that occurred over price levels when Gilead Sciences developed a cure for Hepatitis C? Those prices dropped precipitously when other biopharmaceutical companies developed competing products. It’s an important lesson for policymakers that innovation is a more effective and patient-centered tool for achieving affordability than heavy-handed regulation.
I am pleased to share the perspectives of Genentech’s chief executive.
Innovative Medicines Demand Responsible Pricing
The FDA approval of Biogen’s new Alzheimer’s disease medicine will be, I hope, the first of many new treatment options for patients to help combat this devastating condition. With this news, there has also been much commentary on the price of the medicine.
At Genentech, we’re well aware of the challenges of developing treatments for Alzheimer’s disease. We’ve spent the last decade researching potential targets and have experienced a number of scientific setbacks. But we’re proud to remain in the fight and are currently developing three investigational medicines – two in Phase II and one nearing Phase III completion. Despite the challenges, we remain optimistic about our potential to launch one or more medicines in the future.
Alzheimer’s is one of the biggest public health challenges of our time. The impact of the disease on patients and caregivers is truly tragic and we applaud Biogen for their efforts to develop a treatment.
We believe, like many others in the industry, that the price of a medicine must be based on the benefits it provides to patients and society. Ultimately, the price must enable patients to have rapid and broad access and provide a reasonable return that will fund future R&D investments.
Given the growing worldwide incidence of Alzheimer’s disease, it’s imperative that people with the disease have multiple treatment options to choose from. Hopefully, a number of additional medicines will be approved that deliver more benefits to patients and society. With those advances, the resulting competitive market dynamics will prevail and bring a decline in prices. The availability of more therapies should drive healthy competition, delivering savings to the healthcare system overall and ensuring patients and doctors have important choices in the medicines they receive.
There is an opportunity now for lawmakers and industry to work together on policies that will fuel efficient market-based competition. We must also provide a safety net in the form of a cap on Medicare out-of-pocket costs to ensure that patients have access to life-changing medicines.
At Genentech, we’re committed to working every day to bring even more hope for patients and caregivers living with Alzheimer’s disease. If we are successful, we will price our medicines responsibly so that they reflect the benefit they provide to people with Alzheimer’s disease and society as a whole. We’re committed to working with the U.S. Administration, Congress, and others to find sustainable, system-wide solutions that lower costs while also protecting scientific innovation and ensuring patients have access to the life-changing medicines they need.