Big Pharma CEOs Discuss Collaboration, Talent And IRA Implications At Galien Forum

By Ben Comer, Chief Editor, Life Science Leader

This article is part two of a two-part series covering the highlights of the Galien Forum. Part 1 can be accessed here.

The second half of the Galien Forum on October 27 convened a panel on reframing the biopharma business model, as well as a panel on the current state of COVID-19 therapies and a future outlook.

Panelists from both sessions pointed to a need for education and additional focus on building trust in the healthcare system. According to Edelman’s Trust Barometer survey data, published in March 2022, 52% of respondents said the COVID pandemic decreased their confidence that the healthcare system is well-equipped to handle major health crises. Fifty-five percent of Edelman’s 10,000 respondents expressed worry about medical science becoming politicized or being used to support a specific political agenda.

On the subject of R&D productivity, Giovanni Caforio, chairman and CEO at BMS, said that over the last five years, BMS transformed its R&D function through the establishment of strategically located R&D centers in major biopharma hub cities. Earlier this year, BMS announced that it would open a 470,000 square footage R&D facility in San Diego. BMS spends “$12 billion a year” in R&D, said Caforio, and external collaboration is the only way the company can “move at the right speed.” BMS is currently involved in 300 active collaborations, said Caforio, and the company’s research scientists are incentivized to work beyond company borders. “Our scientists have objectives tied to external innovation, in addition to their internal productivity objectives,” he said.

Caforio noted that BMS is “hiring more computer scientists than biologists,” in response to a question about opportunities in the convergence of science and technology from panel moderator Petra Jantzer, senior managing director and global life sciences lead at Accenture. George Yancopoulos, president and chief science officer at Regeneron, called for a “national healthcare database” that would capture as much patient data as possible, in a single repository. He said the U.K. Biobank is “so much better than anything we’ve done in the U.S.” regarding the bulk collection of useful patient data. Responding to a comment about the applications of A.I. and the potential for conducting a placebo trial arm in silico, Yancopoulos objected to the “I” in AI: “There is no ‘intelligence’ there,” he said. As for in silico trial arms, it will be a “long time” before Yancopoulos will trust the results of a placebo arm conducted in silico, as opposed to in humans, he said.

Passage of the Inflation Reduction Act (IRA) in August — which gives federal officials the power to negotiate prices for some medications covered by Medicare, requires manufacturers to pay back drug price increases exceeding the inflation rate in Medicare, and caps out-of-pocket spending for Medicare Part D beneficiaries, among other things — has already had an impact. In recent weeks, Alnylam and Eli Lilly have both cited the IRA as a reason for halting drug development programs. Rob Davis, CEO and president at Merck, said that while Merck supported parts of the IRA, such as capping Part D out-of-pocket spending, other provisions will have a negative impact on the industry.

Regarding the price negotiation provision, Davis said: “It’s not negotiation, it’s price setting.” The IRA won’t have much of an impact on Merck’s bottom line in the short term, he said, but longer term, “it will have a chilling effect.” Davis used the example of Merck’s blockbuster cancer drug Keytruda to illustrate the long-term implications, noting that Keytruda — despite receiving a first FDA approval in 2014 — is currently less than halfway through its development program. After the IRA, he said, Merck may not be able to use the strategy of multi-year, ongoing new indication development, given that the IRA’s price negotiation capability, which begins at 13 years for biologics and nine years for small molecule drugs.

The Galien Forum wrapped up with a panel on COVID-19, and a disconcerting comment from Florian Krammer, professor of microbiology, pathology, molecular and cell-based medicine at the Icahn School of Medicine at Mount Sinai: “We actually might be worse prepared for a new pandemic than we were before COVID.” Investing in prevention, as opposed to acute care and emergency response, is not something the U.S. health system has prioritized, panelists said. “Public health must be kept separate from politics,” said Peter Marks, CBER director, FDA. Building back trust in the healthcare system — including the government agencies and officials tasked with keeping Americans safe — is important, but specific ideas about how best to engender this trust were not discussed.