Genzyme: The Price of Success - Pharmaceutical Executive


Genzyme: The Price of Success
Genzyme put patients first, and grew to become a multi-billion-dollar company. But empires don't survive on altruism.

Pharmaceutical Executive

On the price side, the company works with a radically simplified policy. "There are essentially two prices," says Termeer. "There's X and there's free."

Genzyme considers this the fairest approach. In the company's experience in dealing with health ministries, countries seek to negotiate price points on the basis of what other countries (typically the ones where the drugs are priced the lowest) are paying. Genzyme acknowledges its commitment to helping patients in countries that can't pay for expensive drugs. But, says Meeker, "It's with an eye toward moving them toward independence."

In negotiating, the company looks for a commitment on the part of the country: Perhaps Genzyme provides drugs and the government supports a center of excellence or educational programs. Or, Genzyme provides drugs to children while the country pays for adults. One of the company's more established efforts is the Gaucher Initiative, a program sponsored by Genzyme and operated by Project HOPE that donates Cerezyme to patients in Vietnam, Sri Lanka, Tanzania, and other countries where no healthcare system supports it. As of January 1, 2006, 213 patients in 16 countries were receiving treatment this way. In addition to the Gaucher Initiative, Genzyme sponsors something similar, the European Cerezyme Access Program, to assist Gaucher patients in Eastern Europe. This program currently donates Cerezyme to 65 patients in eight countries. These gestures are performed under the assumption that at some point, the developing country's government will begin providing reimbursement.

"Things that are free have no value," says Meeker, "so the idea of dropping a drug off at the border isn't the goal. The goal is to create a sustainable healthcare system that overtime can take care of its patients with rare diseases."

That's an ambitious goal, one that some people doubt can be pulled off. But Genzyme points to Algeria. In July 2004, the Central Pharmacy of Algeria placed its first order for Cerezyme, to be reimbursed by the Algerian National Health Care System, for a patient formerly receiving the drug for free through the Gaucher Initiative. The patient was approved for inclusion in the program in 2001, when he was five years old, since Algerian government couldn't pay for the therapy. In late 2003, Genzyme partnered with external organizations to lobby for and promote Cerezyme in Algeria. Their work, combined with changes in Algerian health policy, persuaded the Algerian Ministry of Health to authorize the importation and reimbursement of non-registered orphan drugs like Cerezyme.

Following the authorization, Genzyme organized a "Gaucher Day" in Algeria to discuss next steps. The event attracted more than 80 Algerian specialists with experience in the disease, as well as members of the Ministry of Health, the National Health Care System, and the Central Pharmacy. Collaborations at the event resulted in a list of nine previously unidentified Algerian patients who need access to Cerezyme.

Genzyme is hoping for similar success in bigger countries, but what worked in Algeria may not work on a larger scale. China, India, Latin America, and Southeast Asia are current regions of focus. More established Latin American countries, like Brazil, Argentina, and Columbia, are already reimbursing Genzyme for its products. But in places like Ecuador and Cuba, drugs are donated. Same thing in Asia: Japan, Hong Kong, and Korea pay for the drugs, while China, the Philippines, Malaysia, and Indonesia do not.

Historically, Genzyme has done well in its international endeavors. Sandy Smith, president of the company's international group, who spent 14 years with Bristol-Myers Squibb earlier in his career, says Genzyme's sense of global awareness has given it an advantage. At Big Pharma companies, he says, "models tend to be replicated from country to country." In contrast, Genzyme has been successful internationally because it has "tailored the individual markets' structures to what we need to serve the patients," says Smith. "That's been the driving force of how we've done things."


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