SUMMARY: Via the Financial Times, “pharmaceutical companies have never had it so good. The rapid rollout of Covid-19 vaccines has made household names of Pfizer and AstraZeneca, and the whole industry is winning praise for co-operation”. However, the bump in reputation will be short-lived because companies need to earn the public’s trust every day, and pharma is already damaging their perception with people.
Big Pharma’s reputation has been down in the dumps for years, after a series of scandals involving Medicare fraud, improper payments to doctors, and poorly tested drugs that damaged health. Recently, the opioid epidemic and high charges for both new and old medicines have further alienated the public. Political pressure was mounting in the US, the most profitable market.
A great example of pharma’s profiteering is biosimilar drugs which cost a lot and add billions of dollars to healthcare costs. Pharma has gone to court again and again to delay generic competition of biologic drugs. One company AbbVie has used the courts to stop competition of its top drug Humira. In fact, Richard Gonzalez, C.E.O. of AbbVie, told a congressional hearing that his pay was tied to the price of the company’s drug for rheumatoid arthritis and other conditions.
Fierce Pharma just reported, “a big question hanging over AbbVie CEO Richard Gonzalez is whether he can lead the Illinois pharma safely through the patent cliff of its revenue cornerstone Humira. By the look of 2020’s results, he’s on the right track—and his compensation shows it. For 2020, AbbVie’s handing its longtime CEO $24 million in total pay, up from 2019’s $21.6 million, the company disclosed in a proxy filing”. No biosimilar will take on Humira’s $16 billion in 2020 U.S. sales until at least 2023 because 257 patent filings stand in the way. Another biologic, Enbrel, on the market since 1998, will not have its $5 billion in sales challenged until the end of 2028.
And Pfizer, who developed a great COVID vaccine will reward its CEO handsomely. For writing that 2020 success story, CEO Albert Bourla, Ph.D., collected a pay package worth more than $21 million.
I would ask what about the people who worked tirelessly on the vaccine in R&D and Regulatory? Aren’t they entitled to a slice of the pie beyond a simple “thank you”?
Prices are not falling for biologic drugs as fast as they should. Billions in excess drug costs are shouldered by employers, taxpayers and patients as a result. Granted making biosimilar copies of biologics often costs hundreds of millions of dollars. They need to be extensively tested in long and expensive clinical trials. It’ estimated that 85 percent of biologic drugs that should be squaring off against biosimilar competitors face none.
Let’s not also forget that earlier this year pharma raised prices on over 400 drugs ad part of their annual price increases.
Pharma could take steps to earn the public’s trust by forming a non-profit company responsible for supplying prescription drugs to those who can’t afford it, but pharma only knows the cost of doing this, not the value.
I’m glad that pharma is enjoying a reputation bump. There are too many people within the industry who understand that patients are people, not just customers and prospects. I’m not sure why so many people make the jump from wanting to help patients to “what’s the ROI?” but there are still too many who see the industry as a big fat paycheck.