At the World Economic Forum, Pfizer Inc. CEO Ian Read expressed optimism about the new U.S. administration's policies toward healthcare companies, as he and his peers attributed growing public mistrust in the drug industry to a handful of players.
President Donald Trump's Jan. 11 statement in a press conference that the pharmaceutical companies were "getting away with murder" hung heavy over the Davos, Switzerland, panel discussion on rebuilding trust in the healthcare industry.
Any mistrust was a problem of perception, not necessarily drug prices, Read said, adding that industry outliers were to blame.
"Most of the problem of reputation is coming from those that I don't consider part of" the mainstream pharmaceutical business, he said, naming Mylan NV, Valeant Pharmaceuticals International Inc. and former Turing Pharmaceuticals CEO Martin Shkreli in particular. All three have been in the spotlight for their price increases, and Mylan still has not finalized a settlement with the U.S. government over how it classified its EpiPen treatment for the purposes of calculating Medicaid rebates.
"Any medicine that is successful is hugely profitable, but you don't pay for the ones that are successful — you pay for a modern pharmaceutical industry that has an incredible failure rate because we don't know enough," Read said. He stopped short of criticizing President Trump for his comments.
"I think at this stage he hasn't been briefed as much as he will be briefed, to the extent of competition there is in the system," he said, later pointing out that the U.S. spends 2% of its GDP on pharmaceuticals, compared to a 1.5% average spend in other Organisation for Economic Co-operation and Development countries. According to Read, that additional half a percentage point translates to a $1.6 trillion contribution to the U.S. economy from the industry.
"It's a matter of public policy and a matter of having a dialogue with the administration, and I expect that there will be an understanding from both parts," he said.
Other speakers echoed his sentiments about industry perception, with Rich Lesser, CEO of Boston Consulting Group, repeatedly referring to industry outliers and Frans van Houten, CEO of Royal Philips, saying that trust issues were "around the fringes."
John Milligan, CEO of Gilead Sciences Inc., attributed mistrust to a lack of transparency in the industry and its costs. Past controversy over Gilead's prices for hepatitis C drugs came up in the discussion.
"It's still the headline that gets written, despite the fact that prices have come down by more than half," Milligan said.