Buffering the Pharma Brand: Restoring Reputation, Rebuilding Trust (A panel discussion)
FT Global Pharmaceuticals & Biotechnology Conference 2013, December 3, 2013
With recent surveys revealing pharmaceutical companies now ranking in trust perceptions below producers of spirits and tobacco, and physicians basing prescribing decisions as much on brands as on products, the need for pharmaceutical companies to understand and address the factors contributing to poor reputation has never been greater. How can pharma companies restore reputation and increase trust?
Marijn Dekkers, Chairman of the Board of Management, Bayer:
India for us was an unusual situation. Our patent was not questioned. I mean, other companies patents are questioned. In our case. the Indian government said, “No, no, your patent is valid.” – and this is a product for kidney and liver cancer – “Your patent is valid. We just think that you charge too much, and because you charge too much you have to do a mandatory license to a generic company in India that is now going to make this drug and sell it, and on that low price that they will sell it for, you will get six percent royalty.” And that was a government decision. So, we had a patent, but somebody else is allowed to make this product, and because there is not enough access to this product for poor Indians. I don’t know if you have ever been to India. There are a lot of poor Indians obviously, and the hospitals aren’t that close by (laughs) where they live. So we found that this was extremely politically motivated and essentially, I would say, theft of the Indian government of a capability of a company that has patented and therefore a patent right. So, now is this going to have a big effect on our business model? No, because we did not develop this product for the Indian market – let’s be honest – we developed this product for Western patients who can afford this product, quite honestly. It is an expensive product, being an oncology product. But, you know, the risk in these situations is always spillover. A generic Indian company is now going to sell this product, in South Africa, and then in New Zealand, you never know how this is going to spill over. That puts the whole industry, and the patent right of an industry, at risk.
‘We didn’t make this medicine for Indians… we made it for western patients who can afford it’: Pharmaceutical chief tries to stop India replicating its cancer treatment
By Daily Mail Reporter
Mail Online, January 24, 2014
The CEO of phamaceutical giant Bayer has sparked fury after announcing one of the firm’s drugs was for ‘western patients who can afford it’.
Marijn Dekkers made the inflammatory comments after the Indian company Natco Pharma Ltd. were granted a government licence to produce a copy of Bayer’s cancer drug Nexavar which they will sell for 97 per cent less than the original product.
Under Indian law the government grants compulsory licenses to domestic firms to produce copies of drugs if the original isn’t available locally at a reasonable price, regardless of whether they are under patent.
Mr Deekers, who has previously described India’s patent laws as ‘essentially theft’, said: ‘We did not develop this medicine for Indians. We developed it for western patients who can afford it.’
Nexavar, which is also known as Sorafenib, has been approved for the treatment of kidney cancer, advanced liver cancer (hepatocellular carcinoma), and thyroid cancers that are resistant to radioactive iodine treatment.
Currently a kidney cancer patient would pay $96,000 (£58,000) for a year’s course of the Bayer-made drug. However the cost of the Natco version would be around $2,800 (£1,700).
Does Pharma Only Develop Drugs For Those Who Can Pay?
By John LaMattina
Forbes, December 5, 2013
At the Financial Times Global Pharmaceutical & Biotech Conference this week, Bayer AG CEO, Marijn Dekkers, is reported to have said that Bayer didn’t develop its cancer drug, Nexavar (sorafenib) for India but for Western patients that can afford it. That’s a pretty provocative comment. At a time when Pharma’s reputation is suffering, Dekkers’ comment does not help matters. Rather, it reinforces the notion that Big Pharma is only interested in profits and those in need are out of luck when it comes to life saving medicines.
You write that I could have been more circumspect with my remarks.
I regret that what was a quick response from me within the framework of a panel discussion at the recent FT Pharma conference has come across in a different way as it was meant by myself. It could not be more opposite to what I want and we do at Bayer.
Let me confirm that Bayer as a company wants to improve people’s health and quality of life with innovative therapies and we would like all people to share the fruits of medical progress, regardless of their origins or income.
However, I was particularly frustrated by the Indian government’s decision, to not protect a patent on Nexavar that was given to us by the Indian patent authority. This was a unique event against Bayer’s intellectual property. But as you know best, the protection of our IP is so vital to our ability to fund and advance new innovations to help address some of the worst diseases in the world such as cancer.
I am very passionate about our ability to innovate and in the open and candid discussion at the conference, as I was expressing my fundamental frustrations, I should have made this more clear.
However, I remain firm that there is no excuse for any country to weaken the intellectual property rights. Without new medicines people in developing countries – as well as those in the more prosperous countries – ultimately will all suffer. Bayer, like any other private company, needs a sufficient return on investment to allow for future research and therefore innovation. Generic manufacturers have a critical role to play – but generic companies do not invest in researching and developing and therefore don’t ever bring any new innovative cures and treatments. Not for the developing nor the developed markets!
Chairman of the Board of Management of Bayer AG
Dr David Hill, Chief Executive
World Innovation Foundation
It should be quite clear now that big pharma is ‘only’ interested in vast profits and basically has no empathy with humankind other than it being an immense cash-cow for them. Their actions and out-of-court settlements speak volumes and where history cannot lie.
For the major drug companies throughout the world are continually being found out for criminal and fraudulent activity in order to sell their pharmaceuticals. Not me saying this but the world’s media coverage and the out-of-court agreements that they have settled and where in the past 5 years alone fines in excess of $17 billion have been agreed between authorities and the big drug companies. These include but where they are not a fully exhaustive list of examples,
$2.2 billion and $2.5 billion by J&J (2013),
£3 billion by GSK (2012),
$762 million by Amgen (2012),
$1.5 billion by Abbott (2012),
$95 million by Boehringer Ingelheim (2012),
$109 million by Sanofi-Aventis (2012),
$950 million by Merck (2011),
$520 million by AstraZeneca (2010),
$750 million by GSK (2010),
$423 million by Novartis (2010),
$460 million by Allergan (2010),
$2.3 billion by Pfizer (2009),
$1.42 billion by Eli Lilly (2009)
and $425 million by Cephalon (2008) – Source for all from the US ‘Department of Justice’ and reinforced by Wikipedia listing. Note also that all of these actions had criminal activity as part of their respective settlements. But because these huge global concerns make so much money out of selling drugs, these fines have apparently now become an in-built expense in the corporate cost of their drugs. Indeed in GSK’s 2012 case in the USA, nearly $30 billion was sold and where it was estimate that even after the $3 billion fine was deducted, a profit of $11 billion was made.
Therefore it certainly appears that the accepted corporate environment that these giant corporations have structured internally for themselves has created these illegal activities and where it is of their own making and not predominantly the countries that they operate within – but I have to say though, that it does help if there is government and internal corruption to boot. But possibly the biggest sadness to date has to come out yet in India where over 20,000 of the poorest children in the world (between the ages of 10 and 14) have been used as human guinea pigs for Big Pharma – http://www.bbc.co.uk/news/magazine-20136654 . Indeed over the past seven years, nearly 2,000 trials have taken place in the country and the number of deaths increased from 288 in 2008 to 637 in 2009 to 668 in 2010, before falling to 438 deaths in 2011, the latest figures available. Therefore the drive for corporate profits has a very dark side to it and everyone should be fully aware of this fact. Apparently this is not a problem for big pharma and where vast profits and greed rise above human life itself. Governments just have to get to grips with these huge corporations and fine then not just a small percentage of their profits but all the estimated total profit. That is the only way that they will ever alter their corporate mind-set and strategic blue-print.
About The World Innovation Foundation:: http://www.thewif.org.uk/wif.php?xy=1440&pl=macintel
NICE (National Institute for Health and Care Excellence)
Results for Sorafenib (Nexavar):
NICE does not recommend sorafenib for people with advanced hepatocellular carcinoma. Sorafenib does not provide enough benefit to patients to justify its high cost, even when special considerations were applied, so NICE did not recommend it.
Bevacizumab, sorafenib and temsirolimus are not recommended as first drug treatments for people with advanced and/or metastatic renal cell carcinoma. Sorafenib and sunitinib are not recommended as second drug treatments for people with advanced and/or metastatic renal cell carcinoma.
MSF response to Bayer CEO statement that medicines developed only for western patients
By Dr Manica Balasegaram, Executive Director, Médecins Sans Frontières Access Campaign
Médecins Sans Frontières (Doctors Without Borders), January 23, 2014
The Bayer CEO going on record to say that they did not develop a cancer medicine for Indians but only for ‘western patients who can afford it’ sums up everything that is wrong with the multinational pharmaceutical industry. Bayer is effectively admitting that the drugs they develop are deliberately going to be rationed to the wealthiest patients.
This is a side-effect of the way drugs are developed today. Pharmaceutical companies are singularly focused on profit and so aggressively push for patents and high drug prices. Diseases that don’t promise a profit are neglected, and patients who can’t afford to pay are cut out of the picture. Drug companies claim to care about global health needs, but their track record says otherwise.
It doesn’t have to be this way. Medical innovation can be incentivised differently, and research paid for in ways that deliver drugs but without high prices that exclude millions of people from access. Instead of being part of the problem, drug companies should work to be part of the solution and change the dire state of medical research and development today.
By Don McCanne, M.D.
Bayer Chairman Marijn Dekkers wants to be honest with us when he tells us that Nexavar (sorafenib), an expensive drug for certain liver and kidney cancers, was developed for Western patients who can afford it, but not for poor people such as much of the population of India. Should markets be the controlling factor?
Today’s New York Times reviewed the 2014 Rolls-Royce Wraith, a spectacular two-door sedan available for $372,324, with the $12,925 option of a headliner with 1,340 LEDs that provides the ambiance of a night sky filled with stars. Transportation is an important public policy issue, but, I dare say, the sale of a Rolls-Royce should be left to market dynamics. http://www.nytimes.com/2014/01/26/automobiles/autoreviews/the-ecstasy-of-excess-the-agony-of-the-sticker.html
What about health care? Should it be left to markets? Let’s look at the corporate market mentality in the case of Bayer’s Nexavar. It was not developed for all patients with hepatocellular or renal cell carcinoma; it was developed only for those who could afford it. It was developed for private markets, not for public health. It was intended that it be priced near the maximum that the market would bear, rather than being priced based on costs plus fair profits. The fear and grief of cancer patients are used to leverage higher market prices for oncology drugs. Thus the price of Nexavar was set at $96,000 – a price at which Bayer decided that there was a large enough market of wealthy individuals with these cancers who would willingly pay that amount.
Should the government intervene when drug pricing prevents access for most patients? India thinks so. Bayer could, but won’t, produce the drugs for a much fairer price (since they didn’t design it for the poor people of India). So India is licensing generics, while honoring Bayer’s patent by giving them a six percent royalty for nothing other than owning the patent.
In the United States, we have decided to leave much of the pricing of drugs to the market, except for government programs such as the VA and Medicaid. Although insurers and pharmacy benefit managers do some negotiating, they are still part of the marketplace, and they are very weak negotiators at that. Thus we pay much higher prices for prescription drugs than do all other nations.
There is another point to be made when using the example of Nexavar. England’s NICE evaluates the benefits and costs of various therapeutic measures, and they have decided that this drug is not recommended for either advanced hepatocellular carcinoma or advanced renal cell carcinoma. So why would anyone want to be treated with this medication? One report submitted to NICE showed that Nexavar “on average improves overall survival by 83 days” for hepatocellular carcinoma with Grade A liver function, but “available evidence does not indicate that it delays symptom progression or improves quality of life.” Prolonging life at well over $1000 per day might be worth it to some even if symptoms progress anyway and quality of life does not improve. http://www.journalslibrary.nihr.ac.uk/__data/assets/pdf_file/0009/65295/FullReport-hta14Suppl1-03.pdf
The British and the Indians seem to understand the issues better. Maybe someday we will too, but not until we get a better grasp on the proper role of markets and the government. Markets will get you a Rolls-Royce or 83 days of poor quality life, if you can afford it. The government would get all of us the health care that we really need, if only we would change our politics to make it happen.
But that Rolls… with its 624 horsepower 6.6-liter twin-turbo V12, you can go from a standstill to 60 miles per hour in only 4.4 seconds… an American dream! (Forget about the American nightmare of our health care system.)