Discussion so far has reinforced the importance of the US market in providing the subsidy necessary to maintain the momentum
of discovery and innovation. What about the rest of the world? Are the emerging markets likely to provide a recourse against
declining margins in the mature countries, including the United States?
Truitt: It depends on the disease. I can cite our own commercial model built around hepatitis C. We have a potential market of five
million patients in the United States; in China, it is 50 million. Even on a cash adjusted price basis, the emerging markets
are very attractive. The caveat is you need to do your homework, especially around IP.
Floyd: Europe is becoming a very tough market, not only on reimbursement but also due to the high hurdles being placed on the information
and evidence required to secure registration. The new German approach is basically being applied to the whole of Europe: an
applicant must prove differentiation against current therapy, as well as safety and efficacy. More important, proof of efficacy
must be periodically updated, to certify continuing medical need. This introduces a lot more uncertainty to what was formerly
a one-time, go/no go decision. There is an obligation to initiate studies that demonstrate the drug is maintaining its efficacy;
otherwise the price might be lowered. The United States is going to be the only large market remaining where you can get something
close to your desired price, but even here the cost of doing that is trending higher. This explains why Big Pharma is so interested
in assets of the smaller biotechs, because they have the science and data needed to keep the evidence stream maintained and
up to date without being encumbered by Big Pharma bureaucracy.
Is the US still ahead of the game in serving as the preeminent source for innovation? Does everyone still want to be here
Jarmuz: People drive this industry. You'd have to look hard to find anyone with money and resources outside the US who did not send
their children to be educated in the US. The interesting trend is that whereas these freshly minted scientists and engineers
once chose to stay here and contribute, many are going back home. Unless we apply creative strategies to retain scientific
talent, this trend will continue especially as emerging economies develop their own pharma and biotech industries.
Mack: Tax policy is neglected as a driver of innovation. US policy is outdated and we are less competitive compared to the rates
set by Ireland and other countries. There are massive funds waiting overseas to be repatriated. Taxation is critical to a
small company like mine. We located our R&D and manufacturing base in Florida because the state made it feasible with tax
Collins: The United States remains a magnet for innovation because the pricing is appropriate to the level of risk. Assurances that
this will continue to be the case are beginning to sound doubtful. The game will change completely if the federal government
moves toward the introduction of price controls. The climate can change literally overnight.
Trombetta: I'd like to see our polling firms pose two questions to the public. First is would you pay a bit extra to obtain a drug that
was manufactured entirely within the United States, so that its safety is certifiable? Second, would you also pay a bit more
for all your medicines to ensure that more jobs in the industry would go to Americans? I am not sure what the answers would
be. But right now the messages coming from Big Pharma about jobs are all negative: more than 200,000 US jobs eliminated over
the past nine years, with dozens of plant closings to boot. What a breath of fresh air it would be to reverse that to where
the industry is actually saying "we are bringing jobs back, because quality begins here."