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Execs debate responsibilities of innovation, facing changes to the health sector

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Execs debate responsibilities of innovation, facing changes to the health sector

A couple of biopharmaceutical CEOs revealed what they would prioritize and promote if they were the U.S. Food and Drug Administration commissioner, while the person who recently left that job admitted some of his failings.

Johnson & Johnson CEO Alex Gorsky said that if he led the FDA, he would work with the Centers for Medicare and Medicaid Services to move government reimbursement for drugs to a value-based, outcomes-based system.

SNL Image

Vasant Narasimhan, Novartis CEO

Source: Novartis

If he were FDA commissioner, Novartis AG CEO Vasant Narasimhan said he would "take on the tobacco industry in a big way" as the key effort to tackle cancer in the U.S. He said he would also target food and soft drink manufacturers under an initiative to lower Americans' diabetes and obesity rates.

The drug company chiefs' remarks came at CNBC's Healthy Returns conference May 21 in New York.

At the forum, Scott Gottlieb, who exited the FDA on April 5 after less than two years as commissioner, said the agency "struck the wrong balance" with e-cigarettes, acknowledging that the youth vaping epidemic had surged after he decided in 2017 to delay the premarket application reviews for those products until August 2022. The FDA, however, changed that timeline in March to 2021 shortly before the former leader departed government.

Now that he is on the outside of the FDA, Gottlieb said he plans to "forcefully advocate for the idea of trying to put e-cigarettes" through an over-the-counter pathway rather than a stricter form of regulation, arguing it would ensure proper analysis around the ability of the products to be used as smoking cessation tools.

Before taking the FDA's helm, Gottlieb was on the board of Kure Corp., which makes and distributes flavored liquids for e-cigarettes, and held an investment in it.

Gottlieb said he likely was headed back to the investment world and was talking to his former venture capital company New Enterprise Associates and other similar organizations about a possible position. He currently works part time at the American Enterprise Institute, a Washington think tank.

CRISPR concerns

At the conference, Gottlieb also weighed in on the Chinese scientist, He Jiankui, who used clustered regularly interspaced short palindromic repeats, or CRISPR, technology to edit human embryos, calling it a "horrible experiment."

Anyone who engages in those activities "should be cast out from the scientific community," Gottlieb said.

CRISPR Therapeutics AG CEO Samarth Kulkarni said his company was also worried about the potential blowback on entities like his that are using the technology to discover new treatments, saying a cloud has been left over the entire field because of He.

Kulkarni emphasized his company was not involved in any germline experiments using CRISPR.

"On many levels, the science is not there to support germline editing," Kulkarni said.

Ch-ch-ch-ch-changes

A number of the speakers at the conference also opined about whether U.S. healthcare should move to a single-payer system like many European nations currently employ.

Novartis' Narasimhan said moving to a single-payer system, such as the Medicare for All proposals on Capitol Hill, would delay the latest innovations getting to patients.

"That's the trade-off you certainly get," Narasimhan said.

Medicare for All is the Democrats' campaign trail equivalent of the Republicans "repeal and replace" of the Affordable Care Act, said Peter Orszag, CEO of Financial Advisory at Lazard Freres & Co LLC and the former director of the Office of Management and Budget during the first part of the Obama administration.

"It'll never be legislated because the details are too hard," Orszag said.

The industry panelists at the conference acknowledged drugmakers, insurers and pharmacy benefit managers are bracing for a number of potential changes to their sectors from actions being mulled over on Capitol Hill.

In addition to potentially backing the Trump administration's plan to eliminate the rebates in the Medicare Part D prescription drug program that PBMs and insurers receive from manufacturers in exchange for favorably placing medicines on formulary lists for coverage, lawmakers are pushing for no copayments for seniors and disabled Americans for their generic drugs and for limits on how much beneficiaries in the program would pay out of pocket.

Cigna Corp. has been working to push and support zero copay generic plans for our commercial clients for over a half a dozen years, CEO David Cordani said.

Cigna also has worked with a manufacturer to cap the cost of diabetes drugs, he added.

"So we will lean into those changes. We will not resist those changes," Cordani said.

Long game

Companies pursuing complex innovations must also be prepared to invest in the long game, like with gene therapies, Narasimhan said.

The Novartis CEO said his company was also taking the long view on biosimilars — products intended to be cheaper versions of biologics, which are medicines derived from natural sources, such as microorganisms or plant or animal cells.

Narasimhan said his strategy is to create a company that is "positioned uniquely in the system" with a diversified portfolio, though not a healthcare conglomerate.

He pushed back against the hype over Novartis' recent partnership with Canadian cannabis company Tilray Inc., saying the relationship was a "relatively small distribution deal."

"Cannabinoids is not a focus area for the company," Narasimhan said.

Artificial intelligence

Artificial intelligence and machine learning also were hot topics at the conference.

While AI can help guide drug discovery, Narasimhan cautioned not to expect it to solve all issues.

"To think that we're just going to leave this all to an algorithm and suddenly cancer drugs are going to start popping up, I only wish it were that easy," he said.

Daphne Koller, founder and CEO of Insitro, emphasized that "machine learning is only as good as the data you feed it."

She joked that machine learning was a lot like teenage sex: "Everybody talks about it, only some really know how to do it, everyone thinks everyone else is doing it and everyone claims they're doing it," she said.

Peter Lee, corporate vice president at Microsoft Healthcare, picked up on the analogy, arguing there was a lot of machine learning currently going on, but "a lot of it is unprotected."