Chris Viehbacher was recently interviewed at the Biovision meeting in France. He opined that you need to pay for innovation as it is VERY expensive. His comments were prompted by questioning raised in the industry by payers about Sovaldi's high costs. Viehbacher said these costs were not "outrageous" as some have claimed due to the drug's obvious clinical effectiveness and its prevention of much higher downstream costs from the illness. A position I agree with -- especially when you also consider loss of productivity and quality of life for those with the untreated disease.
More sobering I thought though were these stats he trotted out relative to drug development. He said for every euro spent by big pharma only 70 cents came back on average as revenue. Of the 400 new drugs launched in the last decade, only 20% made their money back. Ouch! That's not good or sustainable. Not if you wish to stay in business.
In many ways things get even tougher. Now drug companies must not only develop a product but must show how much better they are than current therapies. You could argue they always should have been doing this -- but clearly they haven't had to meet that standard -- with me-tooism being rampant. Being novel and better of course entails more risk. So drug makers can't afford to keep blowing $1 B or more on products that don't make it to market.
Viehbacher says the industry must collaborate better and needs to work with biotechs and academics who can bolster big pharma pipelines (and ideas). See PharmaTimes.
Posted by Bruce Lehr June 9th 2014.