If Christopher R. Anderson, president of the Massachusetts High Technology Council, is really speaking on behalf of the state's biotech/pharma industry, it is disappointing to see that the industry is running away from innovation and wants to use regulation as a way to protect its turf.
In an opinion piece in Mass High Tech "Drug importation is bad policy and bad politics," his arguments sound so outdated in 2006. Here we are living in a world that seems to flatten each day, and apparently the Massachusetts biotech firms are arguing for more regulation, rather than for opening markets globally.
Anderson argues against free trade in drugs for the following reasons:
- It harms the state economy. In the short run, it absolutely will (companies that resist change may go out of business, some people may lose jobs, etc.), but the solution is not protectionism. The right approach will be to develop a more powerful business model that takes into consideration the new reality - a flat world in which drugs will soon move as freely as apparel or electronics do.
- It puts patients in harm's way. First of all, this issue is not yet settled. Both the FDA and the GAO have admitted that amount of data that they have collected on imported counterfeit drugs is extremely small. Since it is illegal to import, many crooks are currently in business. In other words, if it were made legal, legitimate companies will emerge and do what is needed, and checks and balances would be put in place to guarantee safety. The way we have systems in place to assure safety of pharmaceutical ingredients (that's right, we import a lot of fine chemicals that eventually end up in prescription drugs) from overseas, we can also have the same safety systems for drugs.
- It harms the drug discovery pipeline. No, it doesn't. To say so is to resist change and to try to transform your business model. If the cost of development of a drug is high (~ $1 billion), and that is a good enough reason to argue for trade barriers, somehow reminds me of the steel industry. We are seeing that in many other sectors (IT, software, business services, auto, etc.), where the cost of business has been fairly high, companies have found ways to optimize their supply chains and lower their costs to stay competitive.
The only good news is that some pharma executives can see the future and are already redesigning their business processes using some very innovative approaches. If you are a biotech executive and see the current business environment as an opportunity (rather than a threat) to transform your business, I invite you to attend sessions on "Cross-Border Models of Life Sciences: A View Across the Value Chain" and "Global Sourcing in a Flat World" during TiECon East 2006.
Recommended article: How to innovate in a flat world?
- By Jay Dwivedi
1 comment:
While I am in general agreement with Jay on his comments that drug development should be on a level playing field across the world, the reality is that most other countries regulate the price of drugs in their markets. Outside of the US, most other countries have governments as single payers for health insurance and as a result can regulate pricing. This brings undue burden on US consumers who pay for biopharma's R&D. Furthermore, a large part of the cost of drug development is the clinical study phase regulated here in the US by the FDA. As the FDA becomes more risk averse, the cost of clinical studies for US drug companies is skyrocketing. Of course all non-US drug companies need to be approved by the FDA to sell their drugs in the US but the FDA will use post-clinical studies data in allowing drugs to be imported.
I agree with Jay that Massachusetts should not regulate pricing which they are effectively doing by importing drugs from countries where pricing is regulated. I would argue that the biopharma industry in Massachusetts needs to lobby the FDA to change the clinical study process. Forcing drug companies to ever larger clinical study populations, as Dr. Una Ryan of Avant Immunatherapeutics described in her presentation this week at TiE-Boston (www.tie-boston.org), is insane. What we should do is get drugs out into commercial distribution earlier and then have a monitoring system for early detection of side effects. Massachusetts could lead the way in the US by putting in an early detection system by mandating electronic medical records and a system to rapidly access it.
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