[Ip-health] John LaMattina's December 5, 2013 Forbes blog on the Bayer/Dekkers quote, and Dekker's response

Jamie Love james.love at keionline.org
Fri Jan 24 03:10:24 PST 2014


Apparently John LaMattina, the former president of R&D for Pfizer, wrote
about the Dekkers/Bayer quote in a Forbes Blog on December 5, 2014. If you
read the comments, there is a response from Marijn Dekkers, as Chairman of
the Board of Management of Bayer AG.   Jamie


http://www.forbes.com/sites/johnlamattina/2013/12/05/does-pharma-only-develop-drugs-for-those-who-can-pay/

John LaMattina, Contributor
I cover news on drugs and R&D in the pharma industry

PHARMA & HEALTHCARE | 12/05/2013 @ 8:18AM |6,716 views
Does Pharma Only Develop Drugs For Those Who Can Pay?

16 comments, 10 called-out Comment Now

At the Financial Times Global Pharmaceutical & Biotech Conference this
week, Bayer AG CEO, Marijn Dekkers, is reported to have said that Bayer
didn’t develop its cancer drug, Nexavar (sorafenib) for India but for
Western patients that can afford it. That’s a pretty provocative comment.
At a time when Pharma’s reputation is suffering, Dekkers’ comment does not
help matters. Rather, it reinforces the notion that Big Pharma is only
interested in profits and those in need are out of luck when it comes to
life saving medicines.

There is some truth to Dekkers’ words. When deciding what research programs
to invest in, the first question asked is the impact that the new project
would have on meeting a major medical need. A project team is then quizzed
by management on other aspects of the research plan such as the project’s
doability, the challenges facing the development program, the overall
projected costs of the entire program, etc. However, there is no doubt that
the commercial potential of the envisioned new medicine also plays a role
in project selection. A new drug to treat brain cancer would meet a major
medical need, as would a drug to treat Human African Trypanosomiasis
(sleeping sickness). I have no doubt that the brain cancer program would
get funded long before the sleeping sickness program in most, if not all,
pharmaceutical companies. After all, a drug for brain cancer would reap a
tremendous return-on-investment (ROI). The sleeping sickness drug would
likely need to be donated to those who need it.

This harsh fact is at the heart of Dekkers’ point. Pharmaceutical R&D is a
very expensive enterprise. To achieve any reasonable ROI, companies must
work on areas that will generate significant income. A drug to treat brain
cancer will do that. A drug to treat sleeping sickness won’t.  Having said
that, pharmaceutical companies recognize that patients often need help to
pay for life saving drugs and have established patient assistant programs.
A quick check of Pfizer PFE -0.83%’s website shows multiple such programs
including “Connections to Care”, a program that enables patients to gets
medicines for free through their doctors’ offices, and “Sharing the Care”,
a program that helps uninsured patients get Pfizer medicines for free
through participating community health centers and hospitals. Companies
make similar financial accommodations in the developing world to provide
access to its medicines in poor countries.

But what about non-Western diseases?  Recently, I met with people from the
“Drugs for Neglected Diseases initiative” (DNDi), and was very impressed by
their efforts to develop new drugs for people suffering from the most
neglected diseases such as sleeping sickness, leishmaniasis, and Chagas
disease. I was also impressed by how much help that Pharma was providing
DNDi in their drug discovery efforts. Most major companies, including
Sanofi SNY -1.44%, GSK and Merck , are helping in screening efforts,
providing compound libraries for testing and lead optimization – all
crucial steps in generating clinical candidates. I was told that such
assistance is key to DNDi’s work in discovering new drugs for neglected
diseases.

While Dekkers could have been more circumspect in his remarks, they were
certainly factual. Having said that, one shouldn’t come away with the
notion that pharmaceutical companies are shirking their social
responsibilities not just in the West but globally as well.


 16 comments

davidstuarthill davidstuarthill 1 month ago

It should be quite clear now that big pharma is ‘only’ interested in vast
profits and basically has no empathy with humankind other than it being an
immense cash-cow for them. Their actions and out-of-court settlements speak
volumes and where history cannot lie.

For the major drug companies throughout the world are continually being
found out for criminal and fraudulent activity in order to sell their
pharmaceuticals. Not me saying this but the world’s media coverage and the
out-of-court agreements that they have settled and where in the past 5
years alone fines in excess of $17 billion have been agreed between
authorities and the big drug companies. These include but where they are
not a fully exhaustive list of examples,

$2.2 billion and $2.5 billion by J&J (2013),
£3 billion by GSK (2012),
$762 million by Amgen (2012),
$1.5 billion by Abbott (2012),
$95 million by Boehringer Ingelheim (2012),
$109 million by Sanofi-Aventis (2012),
$950 million by Merck (2011),
$520 million by AstraZeneca (2010),
$750 million by GSK (2010),
$423 million by Novartis (2010),
$460 million by Allergan (2010),
$2.3 billion by Pfizer (2009),
$1.42 billion by Eli Lilly (2009)
and $425 million by Cephalon (2008) – Source for all from the US
‘Department of Justice’ and reinforced by Wikipedia listing. Note also that
all of these actions had criminal activity as part of their respective
settlements. But because these huge global concerns make so much money out
of selling drugs, these fines have apparently now become an in-built
expense in the corporate cost of their drugs. Indeed in GSK’s 2012 case in
the USA, nearly $30 billion was sold and where it was estimate that even
after the $3 billion fine was deducted, a profit of $11 billion was made.

Therefore it certainly appears that the accepted corporate environment that
these giant corporations have structured internally for themselves has
created these illegal activities and where it is of their own making and
not predominantly the countries that they operate within – but I have to
say though, that it does help if there is government and internal
corruption to boot. But possibly the biggest sadness to date has to come
out yet in India where over 20,000 of the poorest children in the world
(between the ages of 10 and 14) have been used as human guinea pigs for Big
Pharma – http://www.bbc.co.uk/news/magazine-20136654 . Indeed over the past
seven years, nearly 2,000 trials have taken place in the country and the
number of deaths increased from 288 in 2008 to 637 in 2009 to 668 in 2010,
before falling to 438 deaths in 2011, the latest figures available.
Therefore the drive for corporate profits has a very dark side to it and
everyone should be fully aware of this fact. Apparently this is not a
problem for big pharma and where vast profits and greed rise above human
life itself. Governments just have to get to grips with these huge
corporations and fine then not just a small percentage of their profits but
all the estimated total profit. That is the only way that they will ever
alter their corporate mind-set and strategic blue-print.

Dr David Hill
Chief Executive
World Innovation Foundation

Called-out comment
John LaMattina John LaMattina, Contributor 1 month ago
The vast majority of people in the biopharmaceutical industry are committed
to helping people around the world. All of the major medicines to treat
cancer, AIDS, heart disease, diabetes, etc., have all come from this
industry. Your “no empathy” comment is simply not true.

Called-out comment
Errol Brown Errol Brown 1 month ago
John why are defending these criminals called big pharma. When did you get
on their payroll? The USA has 5 % of the worlds population yet uses over
50% of all the drugs. it has no effect because although we pay much more
than any other country for health care we rank #51 in life expectancy all
the while the drug companies are amassing 500 billion in profits each and
every year. Why even use drugs at all? Why do we have to see drugs sold on
TV every single day. Who pays for that? You sir need to be jailed for
crimes against humanity.

stevewr stevewr 1 month ago
While the drug companies do reach out to help others, I think generally
they are very greedy and could take on much more social responsibility.
Don’t get me wrong, I’m not anywhere near a socialist and think they should
make truckloads of money for the medications that help people. I just
wonder how much more good they could do if they let go of just a little
profit and prioritized drugs that would help a large number of people, but
may not make as much money.

Profit margins for the drug companies look to vary between about 15% and
25%. For the big ones, that is somewhere between 9 and 15 billion dollars a
year. What if they just backed down to 6 to 12 billion dollars to went
after third world disease, antibiotics, and other less profitable
activities. Would that really kill anyone? Like Amazon, it’s even possible
the stockholders would receive more value from company growth rather than
profit.

Between the FDA’s utter incompetence and shortsighted corporate greed, I’m
not holding my breath though.

Called-out comment
John LaMattina John LaMattina, Contributor 1 month ago
The profitability of drug companies has fallen in the last decade. The
consolidation of the industry, huge personnel layoffs and the increasingly
difficult hurdles to get successful new drug approvals are all conspiring
to make this a very tough business. The fact that this industry is still
among the most philanthropic is remarkable.

Called-out comment
stevewr stevewr 1 month ago
That’s great, but most industries would kill for a 15-25% profit margin.
Only short term, unsustainable greed would lead anyone to believe falling
to a 10-20% profit margin to pursue drugs with less profit but more
societal benefit would be a bad thing.

Reply
Errol Brown Errol Brown 1 month ago
Why even use drugs at all.? Drugs do not heal they treat, drug companies do
not recognize the word heal they want lifetime dependence on expensive
dangerous and ineffective poisons to the body called drugs. Drug company
officials need to be dragged out of their plush offices and jailed for
crimes against humanity. They are much more dangerous and deadly than any
17 year old with a Saturday night special or any terrorist with an ak47 or
rpg.

Reply
Michael Hermens Michael Hermens 1 month ago
Why are Pharma companies treated differently than other businesses?
Businesses make products that people will pay for – imagine that! How many
NFL teams allocate 5,000 seats at a game for free? How many of the 10
million or so new cars that are marketed in the US are given, for free, to
the poor? 30%? 20%? 10%? Transportation and entertainment are part of
American life, but I don’t see these businesses being required to have
“social responsibility.”

If business owners want their companies to be socially responsible and
provide a percentage of their revenue to causes, that’s fine. The problem
is the larger political expectation that companies should fritter away some
or most of their profits to charities by either in kind donations (free
drugs) or payments.

Called-out comment
Reply
Cathy Holmerg Cathy Holmerg 1 month ago
Its not only about targeting the rich, its about targeting the U.S.A. My
husbands blood pressure meds cost 8 times more here than in Canada or
Australia where we lived or 16 months. The US pays for the rest of the
world.

Called-out comment
Reply
Girish Malhotra (epcotint) 1 month ago
No matter how we skin the arguments of compassion, drugs are for the people
who can afford them through healthcare programs. If healthcare programs
were not there reality will be food vs. drugs. Drug Prices: Food vs.
Medicine – A Difficult Choice for Some.
http://pharmachemicalscoatings.blogspot.com/2011/06/drug-prices-food-vs-medicine-difficult.html

Lets us face reality unless a disease can and has the potential of
inflicting pain in the developed countries that have healthcare programs,
new drugs would not be developed for the underdeveloped countries. HIV/AIDS
is a good example. There are many other.

When a drug active dimethyl fumarate (Tecfidera for Multiple sclerosis)
that sells for about $30.00 per kilo and will produce about 8000 tablets
per kilo is being sold for $55,000 per year treatment ($150.00 per day), we
need to rationalize what is priority greed/profit or compassion.

Pharma companies have inefficient practices and they do not want to address
or recognize them as it would be admission of poor business practices. If
the eliminate inefficiencies they would save about 25% of the global
revenue if they became efficient.

Quod Erat Demonstrandum.

Called-out comment
John LaMattina
I was the president of Pfizer Global Research and Development in 2007 where
I managed more than 13,000 scientists and professionals in the United
States, Europe, and Asia. I've received numerous awards including an
Honorary Doctor of Science degree from the University of New Hampshire. I
am also the author of "Drug Truths: Dispelling The Myths Of R&D" and the
recently published Devalued And Detrusted: Can The Pharmaceutical Industry
Restore Its Broken Image?" I am also a senior partner at PureTech Ventures.


Cathy Holmerg 1 month ago
Good point, however only in the USA does it cost that much. The REST of the
world gets it far far cheaper because we as Americans pay for the bulk of
it.

Reply
Author
John LaMattina
I have addresses some of these concerns in previous posts as well as in
answers to your comments, so I won’t repeat those again. However, your
comment on inefficient practices cannot go unchallenged. For the last
decade, pharma has been very diligent on improving efficiencies. I can say
that from personal experience. You view tat companies can readily save 25%
of global revenues is absurd.


Called-out comment
Marijn Dekkers

John,

you write that I could have been more circumspect with my remarks.
I regret that what was a quick response from me within the framework of a
panel discussion at the recent FT Pharma conference has come across in a
different way as it was meant by myself. It could not be more opposite to
what I want and we do at Bayer.

Let me confirm that Bayer as a company wants to improve people’s health and
quality of life with innovative therapies and we would like all people to
share the fruits of medical progress, regardless of their origins or income.

However, I was particularly frustrated by the Indian government’s decision,
to not protect a patent on Nexavar that was given to us by the Indian
patent authority. This was a unique event against Bayer’s intellectual
property. But as you know best, the protection of our IP is so vital to our
ability to fund and advance new innovations to help address some of the
worst diseases in the world such as cancer.

I am very passionate about our ability to innovate and in the open and
candid discussion at the conference, as I was expressing my fundamental
frustrations, I should have made this more clear.

However, I remain firm that there is no excuse for any country to weaken
the intellectual property rights. Without new medicines people in
developing countries – as well as those in the more prosperous countries –
ultimately will all suffer. Bayer, like any other private company, needs a
sufficient return on investment to allow for future research and therefore
innovation. Generic manufacturers have a critical role to play – but
generic companies do not invest in researching and developing and therefore
don’t ever bring any new innovative cures and treatments. Not for the
developing nor the developed markets!

Marijn Dekkers
Chairman of the Board of Management of Bayer AG

Called-out comment
John LaMattina,
Marijn,
It is nice to hear from you and thanks for taking the time to respond. I
sensed your frustration with the IP situation in India from your other
comments at the FT session. I fully support your views on IP. In fact, you
might have noted some of the other pieces that I have written on this topic
for Forbes.com. I am sympathetic to the plight of the poor in India and
their need for life-saving drugs. However, as Pfizer CEO Ian Read has
pointed out, there are over 100,000,000 people in India who can better
afford medicine than their Western counterparts. The outright usurping of
IP by the issuance of compulsory licenses in India is wrong. A better
system is needed.

Your comment generated a lot of chatter on social media, some of it
incorrect. The purpose of my post was to provide a bigger picture of the
decision making process for selecting research projects and to reinforce
the fact that if there is no financial return, there is no R&D.

I wish you and Bayer AG success in bringing new medicines to the world.
– John

Called-out comment
Reply
Jonath Quiona Jonath Quiona 1 month ago
Mr Dekkers – Your CEO refuses to deal with the CIPRO situation, thousands
of phone calls have been made to the office yet his secretary says he has
no time to talk to people whose lives it’s ruined permanently. when will
your CEO have time to handle this matter? when will your company take
ethical efforts to put new warnings that are needed for this drug?

It seems you have plenty of time to comment on blogs? Maybe take sometime
to respond to your “customers” who have been hurt by your product.

Reply
James Love James Love 4 minutes ago
Bayer is arguing in the India courts that the price of Nexavar is
“reasonably affordable” in India. Before the compulsory license, Bayer was
serving only a tiny number of cancer patients in India. Does Dekkers really
believe that a company with a patent on a cancer drug can ignore the
majority of the world’s population that cannot afford the prices paid in
“western” countries, and avoid a compulsory license?


-- 
James Love.  Knowledge Ecology International
http://www.keionline.org, KEI DC tel: +1.202.332.2670, US Mobile:
+1.202.361.3040, Geneva Mobile: +41.76.413.6584,   twitter.com/jamie_love



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