A New Type of Investor Relations for Biopharma
This article was originally published in RPM Report
The biopharma industry is facing strong pressure to justify its pricing practices. And not just from politicians.
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Investors remain hyper-sensitive to any threat to pricing flexibility for biotech products. The latest over-reaction – to a renewed call for Medicare “price negotiation” – meant missing some of the more meaningful messages coming from Washington about support for innovation.
The biotech investment boom hit the brakes at the end of the first quarter when Rep. Henry Waxman (D-Calif.) publicly complained about Gilead’s pricing for the hepatitis C therapy Sovaldi. The fact that Waxman’s attack has little substantive impact didn’t seem to matter. Another Washington threat—to undo “tax inversion” strategies—is probably much more real, but may actually boost the sector for the rest of 2014.
Biopharma industry is making some modest headway in quest to change the new US Medicare drug price process to treat drugs and biologics on equal footing. But eliminating the so-called ‘pill penalty’ would not on its own equalize the incentives for small molecule and large molecule R&D.