BIO 2010: Potemkin Pavillions and the Power of NICE
Missing from the slick videos, graphics and takeaway tchotskes was any real sense of the importance of pricing and reimbursement levels that can accommodate the high cost of capital, increased regulation and long development lead times that together have sharply lowered effective periods of market exclusivity for biotech. Instead, the talk was all about building more Potemkin villages around infrastructure — tax breaks, R&D allowances, funding for basic research and facilitation of academic partnerships — that do little to compensate those who risk private capital for a profitable return on the investment.
The essential steps required to promote rapid commercialization of research, where government has to pull back and basically let the market work for itself, just didn't seem to be part of the conversation. It's another sign that the 'public utility' model may well be the most realistic scenario driving the industry's future; ironically, its the most innovative research segment — biotech — that seems to be leading the way.
One example of this disconnect between advocacy of 'front end' support for innovation and neglect of the 'back end,' where products face an increasingly skeptical phalanx of payers, was the appearance of Sir Michael Rawlins in a series of impromptu exchanges at BIO hosted by the UK Department of Business, Innovation and Skills. Rawlins heads the National Institute for Health and Clinical Excellence [NICE], which reviews medicines for evidence of cost-effectiveness prior to listing on the NHS. NICE is criticized in some quarters of industry for holding back access to medicines on grounds that their clinical value is insufficient when weighted against strict metrics of affordability.
Rawlins made a number of useful points in suggesting where governments are heading in this puzzling, increasingly disconnected game to 'promote' biotech:
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