John Castellani: Industry's Level Bet on a Dizzying Future - Pharmaceutical Executive

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John Castellani: Industry's Level Bet on a Dizzying Future
Will reinforced evidence and messaging continue to deliver results in a changing healthcare marketplace? Can PhRMA's own business model synch with industry's? Pharm Exec takes a closer look at PhRMA's new leadership


Pharmaceutical Executive


Reform Reflection

WL: Is this the motive that drove PhRMA to support the health reform legislation last year? Some observers criticized the strategy as shortsighted and predicted the Obama Administration would renege on its commitments to the industry.

JC: PhRMA continues to support all Americans having access to high-quality and affordable healthcare coverage, services, and treatments. Just how we get there is what's being debated in the halls of Congress and in courts across America right now.

I think most Americans recognize that the healthcare reform law is not perfect and that it needs to be improved. While there are disagreements in Congress on how it could be improved, policymakers have the difficult job of trying to navigate through some tough waters and doing what they believe is best for the future of healthcare in the US.

I can tell you that one provision in the law that continues to concern members of Congress on both sides of the aisle—and a broad array of other healthcare stakeholders—is the Independent Payment Advisory Board (IPAB). This Board will be in charge of slashing Medicare spending, which could result in access restrictions for millions of seniors. Since the law was enacted, we have said that this provision should be repealed so that seniors don't have to face cuts to important medical services and treatments.

As to your other point, if you look at the recent earnings reports of many biopharmaceutical companies, you will see that the healthcare reform law has already had a significant impact on their bottom lines. Any more hits—for example, damaging public policies—to this job-creating, innovative industry could very well hurt future R&D and impact US-based biopharmaceutical jobs. For this reason, we will continue to advocate for good policies that value innovative sectors such as ours so that we can continue to advance patient care and help improve the US economy.

WL: Is PhRMA a US organization or a global organization? How do you define yourself geographically?

JC: We are a US-based organization, but from a practical standpoint our mandate has to be global. The issues we face in Washington are similar to what is going on in Sacramento and Berlin and Tokyo or
Ottawa. In that sense we are a mirror to our own members, who no longer see themselves as US companies with a view that begins and ends here—and can be extended elsewhere, relying on the same rule book. They have made the transition from the old multinational model to the integrated global organization, and so have we.

How we approach this from a resource and organization perspective is twofold. First, we apply the capabilities of our international staff here at HQ to promote policy reforms in key regions and markets, with a current strong emphasis on Asia and the emerging markets. Second, we are participating in networked approaches with our two sister regional and Geneva-based trade associations—EFPIA and IFPMA—as well as with the major national associations like JPMA. We set common strategies that start from the premise that if you can solve it here, you can solve it there, and vice versa.

The best example I can cite is that our international and domestic budgets were once separate; now they draw from the same pool. Likewise, we now have in place a single organizational reference point for all our advocacy/stakeholder outreach activities: federal, state, and international. It's led to a lot of common learnings that we can apply successfully across functions and geographies. I look at it as the model for the entire organization. Frankly, we have to do more of that in our relationships with the emerging markets, where we are not as advanced as we could be. I see a big opportunity for progress in China, where the 20 most responsible companies have just formed a new trade association. My expectation is that some of these companies will eventually become members of PhRMA.

WL: How strong is the membership base? Is there a future for PhRMA in biotech and are you working to address the impact of defections like Roche?

JC: All of our member companies are active in biotech, so we position ourselves as a biopharmaceutical organization. Our membership base is strong—we have more members today than at any point in our history. To keep our members, the board has to feel engaged. One way I am doing that is to emphasize that board meetings be reserved for making decisions on strategic issues. We avoid procedural matters—they can be resolved by reading a paper in advance.


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