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Goodwill from COVID-19 successes is drugmakers' new bulwark in pricing battles

As President Donald Trump tries in his final days in the White House to push through his drug pricing proposals and Democrats gear up for a new fight on Capitol Hill to lower costs, manufacturers have a new bulwark to defend themselves: the goodwill they have built up in developing therapies and vaccines to combat the COVID-19 pandemic.

The drug industry's reputation with the public has markedly improved in recent months because of manufacturers' involvement in responding to the pandemic. About 70% of U.S. adults surveyed said they now have a more favorable view of biopharmaceutical companies, according to a recent Harris Poll.

"The value proposition of what a robust pharmaceutical sector can do for the public health has been brought into stark relief," said Stephen Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America — the brand-name drug industry's lobbying group.

The world's reliance on biopharmaceutical manufacturers to address the therapeutic needs of COVID-19 patients and to develop effective vaccines against the virus is a "once in a generation opportunity to reset the narrative about the industry," Ubl said Nov. 17 at a virtual conference hosted by Stat News.

"I do think people are appreciating the value and seeing the hopeful signs of us all getting back to normal, that science and collaboration are really prevailing," he said.

The biopharmaceutical industry and the scientific ecosystem at large are having their moment in time, said George Yancopoulos, co-founder and chief scientific officer at Regeneron Pharmaceuticals Inc.

SNL Image
Regeneron Chief Scientific Officer George Yancopoulos
Source: Regeneron Pharmaceuticals Inc.

"I think it was time for the world to wake up and recognize that we are so susceptible to these sorts of existential threats, like a pandemic or like climate change," Yancopoulos said Nov. 18 at the Stat Summit. "I think we delivered and we are delivering as a bio-industry."

Policymakers should be discussing how incentives for the drug industry can be increased, not decreased, to ensure the sector remains strong and robust to address the diseases that cripple civilization "because the cost to society is trillions," he said.

The pandemic is "proof positive of that," said Yancopoulos, whose company is awaiting word from the U.S. Food and Drug Administration on whether it will grant emergency use authorization to Regeneron's COVID-19 antibody cocktail treatment, REGN-COV2.

"I hope the world is taking note and I hope government and policymakers are taking note and they're recognizing that the most important thing is to figure out policies and approaches where they're going to increase the capabilities and the strength of the industry," he said. "It's not about saving pennies. It's about saving society and making the investments in the most important source of technologies that we need to be able to survive in the face of these truly existential threats."

Not enough credit

But Regeneron co-founder and CEO Leonard Schleifer was doubtful that the industry's successes in addressing the pandemic will change anything in the public's perception over the prices drugmakers charge for their products.

SNL Image
Regeneron CEO Leonard Schleifer
Source: Regeneron Pharmaceuticals Inc.

"I truly believe that no matter what price the cocktail or vaccine comes out and even if you give everybody the cocktail and a Thanksgiving turkey, people will be complaining it's too expensive if you gave it away for free," Schleifer said.

The Regeneron chief argued that the drug industry does not get enough credit for its innovative work — insisting it is the manufacturers and not government agencies, like the U.S. National Institutes of Health and the academic research its funds, that are making the breakthroughs in medicine and discovering "crazy amazing" COVID-19 solutions.

Schleifer acknowledged that the U.S. taxpayer-funded Biomedical Advanced Research and Development Authority, or BARDA, "has been terrific" in supporting companies' work in COVID-19 and other diseases. Regeneron inked a $450 million contract in July with BARDA and other federal agencies to manufacture and supply REGN-COV2 once it is cleared for the U.S. market.

But he insisted it is the support of shareholders and not taxpayer funds that drive new technologies.

While Schleifer admitted that foundational research conducted with taxpayer funds was important, he declined to acknowledge the fact a number of platforms companies rely on, like the one used by Moderna Inc. for its experimental COVID-19 vaccine, were developed at the NIH or at academic institutions with public money.

"We're just trying to say that we have to value this industry or people will go elsewhere with resources," he said.

Incremental reforms

With the control of the U.S. Senate unknown until the Jan. 5, 2021, runoff elections for both seats in Georgia, it remains to be seen whether Democrats will succeed in getting the chamber to adopt drug pricing legislation passed by the U.S. House in December 2019, Ubl noted.

The bill, known as H.R. 3, led by House Speaker Nancy Pelosi, D-Calif., would permit the federal government to negotiate the prices of the most expensive prescription drugs on behalf of the Medicare program and the commercial insurance market.

Ubl said the industry would push back and oppose any efforts to impose government price setting.

"We know how that movie ends," he said. "It means less access to new treatments and cures, less investment in R&D and jobs."

If Republicans keep control of the Senate, it is more likely lawmakers will only be able to pass incremental reforms, Ubl said.

While both Ubl and Michelle McMurry-Heath, CEO of the Biotechnology Innovation Organization, pledged that their groups were willing to come to the table and further discuss drug pricing matters with lawmakers and the incoming Biden administration, the lobbying organizations' proposals were focused more on reforming costs from insurance companies and pharmacy benefit managers — the middlemen — rather than actually lowering the prices of innovative medicines.