PharmaSpeak: James Greenwood, The Biotechnology Industry Organization (BIO)

By Alissa Poh

|November 19| Jim Greenwood, BIO’s president and CEO, is a familiar face in many Washington, D.C. circles, having represented Pennsylvania’s Eighth District in the US House of Representatives for 12 years (1993-2005). During his time in Congress, he was widely viewed as a leader on health care and environmental issues. He also led investigations into corporate governance at Enron, Global Crossing and WorldCom; terrorist threats to the nation’s infrastructure; as well as waste and fraud in federal government agencies. In January 2005, he took over the leadership reins at BIO, which provides advocacy, business development, and communications services for more than 1,200 members across the globe. Greenwood has done much for BIO for the last three years, increasing both its staff and budget by nearly 50 percent, among other positive developments.

PharmaWeek recently secured approximately 20 minutes of Greenwood’s time for a Q&A on the upcoming change in administration, and its impact on pharma/industry.

When it became clear that Barack Obama had pulled off a decisive victory on November 4, 2008, what were your first thoughts?

Like most Americans, I was struck by both the historical nature of the event and its emotional impact – never in my lifetime have I seen such expressions of rapture on the faces of a candidate’s supporters. Putting my BIO hat on, I would first say that whenever the country’s political landscape changes, there are new opportunities that emerge, as well as new challenges. We expect that president-elect Obama will quickly reverse President Bush’s executive order on embryonic stem cell research, and we applaud that. Also, if the new administration and Congress enact health care reform that expands access and affordability, that will be a good thing.

Are you hoping to convince the new leadership that this is no time to cut drug prices?

The message I’d like to convey is simply this. If those in Congress who are most determined to reduce drug prices are wildly successful, and say through Medicare Part D price negotiations – Medicaid, rebates, reimportation, follow-on biologics legislation with a short period of data exclusivity – you managed to achieve European-level pricing. You might save $50 billion a year, which is about the R&D budget for the US private sector drug discovery industry. My fear is that if the focus is on driving down prices, it will significantly impede the ability of companies to use their product revenues for development, and it will also dissuade investors from investing in everything from Big Pharma to small startup biotechs. I’d argue that if the issue is how we might reduce health care costs, the best way is by reducing the incidence of chronic disease. That reduction, by even 10 percent, could save us $150 billion a year - three times what we’d get compared to European-level [drug] pricing. And the best way of reducing chronic disease is for biotechs to be able to continue developing new products that cure, treat, and prevent such illnesses from expressing themselves to begin with.

How would you address the question of dried-up pipelines [re new product development], which seems to be a consistent lament among those in pharma?

Big Pharma has had some difficulties with their pipelines, yes, and we think the solution lies in continued collaborations with biotechs and small companies without their own products, that are focused on drug discovery. Given the credit crunch, these biotechs are particularly available right now for collaborations of various kinds - M&A, investments, licensing deals. So the best way to continue bringing new products to market is through healthy, mutually sustaining relationships between biotechs and Big Pharma.

So BIO will support PhRMA’s public relations campaign to preserve the free-market health care system?

We don’t have quite their resources, but we certainly will be making the case that it is short-sighted to think that the place you begin with in health care reform is by simply whacking away at drug pricing. It’s insufficient, with only limited savings, and it can ultimately be counterproductive in terms of research dollars. We do want to be very helpful on health care reform – in fact, there are four things we’d like: universal access, quality, affordability, and innovation. Too frequently, however, that last piece is forgotten – if you focus strictly on reducing reimbursements in order to get to affordability and access, eventually you’ll lose quality and innovation. The Europeans solved the access and affordability problems, but there’s been a price to pay in the latter two. Our big challenge here is whether we in the US can create a better system, one that guarantees access and is sufficient and affordable, yet still encourages and benefits from innovation.

You mentioned BIO’s anticipation of Obama reversing Bush’s policy on embryonic stem cell research. Aside from applauding this move, what other thoughts do you have on this topic? Any comment on Pfizer’s plan to set up stem cell research facilities in both the UK and US?

Well, it remains to be seen whether Congress is going to take that legislation [as in the past] and send it to Obama for his signature, or whether he’ll just reverse Bush’s executive order with one of his own. Many members of Congress would like to cast that vote; on the other hand, the resolution could easily get bogged down over issues like somatic cell nuclear transfer, therapeutic cloning, etc. In either event, we will certainly encourage reversal of that policy and applaud our new president for this move – but we will also use the occasion as a teaching moment.

It’s extremely important that members of Congress understand that simply allowing the NIH to fund embryonic stem cell research in universities does not produce therapeutic / diagnostic products for patients. That translation is quite far down the road from academia; it’s done by the private sector and our companies. What has always been frustrating is to have these members, in the context of the stem cell debate, articulate their fervent desire to cure cancer, diabetes, Parkinson’s and Alzheimer’s, then turn around the next day and vote in ways that make it very difficult for us to attempt doing so. We’re going to be very focused on trying to demonstrate to the new administration and members of Congress that the process might begin with an NIH grant, but it then requires a patent system that works, policies creating tax incentives for investing in startups, and a well-resourced, well-staffed FDA with a good, confirmed Commissioner at the front. It also requires a set of realistic expectations with regard to the risks and benefits of drugs, instead of Congress constantly beating up the FDA because of a safety signal. It will require follow-on biologics legislation that provides a sufficient period of data exclusivity so companies will make investments in new products; as well as reasonable reimbursement to the manufacturers so they get a return on their investments. We want to avoid the opportunity for members of Congress and the new administration to say, ‘We did stem cells – that’s everything necessary for biotechnology, so let’s move on to something else.’

As for Pfizer’s announcement, it’s certainly very exciting; an indication that Pfizer intends to be a major, forward-looking biotech, breaking the mold of Big Pharma where the focus has always been on hunting for blockbusters.

What are your thoughts on the type of FDA Commissioner we need?

First, about the FDA - the problem is that Congress has historically mounted more and more responsibility on this agency, while not providing adequate funding for the mission. Then the members have been very accusatory and critical whenever something goes wrong. That’s not a constructive approach. It would be better to make sure that the FDA has enough resources to hire enough people to monitor the safety of drugs, food, devices, etc. – and if we want to take full advantage of rapidly growing biotechs, we have to make sure the agency has personnel and reviewers who’re completely up to speed on the science. The FDA’s failures don’t stem from the fact that they have bad people there, or that anything corrupt is going on. It has everything to do with resources, or the lack thereof.

The Commissioner will need to be passionate in taking full advantage of the constantly expanding scope of scientific knowledge, so that knowledge can be turned into products that save people’s lives and reduce their suffering. It’s important that he/she can articulate, over and over again [to Congress, to the public], that we can’t expect completely risk-free drugs any more than we can expect risk-free surgery, automobiles, or anything else. If safety problems arise, we’ll need to focus on doing a better job with post-market surveillance, etc. We don’t need a leader who’s hostile or biased toward the industry, or toward patients, but one who strictly goes by the science. We think it’s possible for the FDA to maintain the gold standards on safety and efficacy, and also be focused on the kind of efficiency and fairness necessary to objectively review applications.

Tell us more about your hopes for BIO/the industry, under the new administration.

On my more optimistic days, I am hopeful that the kind of change president-elect Obama talked about during his campaign isn’t just rhetoric, but that it really causes the political system in Washington to start rethinking the way it does things. For instance, change does not mean that once the inauguration is over, both sides draw the same swords they’ve drawn for the past several years and have the same fights, with a slightly different outcome. Maybe change means that before we start engaging in these battles, we have a conversation about how to achieve win-win outcomes, how to work more collaboratively and with less conflict. For example, do we go right into the Medicare Part D price negotiations script? There’s a day on the calendar – somewhere in February or March next year – where it’s anticipated that we’ll have this debate, which frequently involves much negative characterization of pharma/industry, a lot of heated rhetoric, and accusations that one side or the other doesn’t understand how the program works. I think it would be stunningly different if the new administration said,’OK, let’s sit down with the insurance and drug industries, and let’s look into how pricing works in Medicare Part D.’ In other words, let’s examine whether the government is getting a good and fair rate, and what the impact would be if the Secretary actually got into the act of trying to negotiate prices for all of these private plans. We could see if there’s a different way forward rather than having the same battle.

Or take reimportation – it would be nice if what I just talked about could happen in that area too. Is that simply another calendar date, like Groundhog Day, where we have to wage war with the same heated rhetoric and accusations? Could we, instead, sit down and discuss the drugs that are being imported, the real safety issues, and whether importation actually accomplishes anything in terms of affordability and access? On my more cynical days, I think we’ll probably just go through the same routines again. But I think we owe it to ourselves as a nation, and to our president-elect, to take him at his word that he wants to do things differently – so we need to be available and encouraging about a different approach.

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