The Pharma C.E.O. Who Wants to Lower Drug Prices

http://www.nytimes.com/2016/10/21/opinion/the-pharma-ceo-who-wants-to-lower-drug-prices.html

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The pharmaceutical industry has been put on the defensive about rising cost of prescription drugs, with some executives called to testify in Congress about price gouging. In a recent interview, Andrew Witty, the chief executive of GlaxoSmithKline, who is retiring in March, talked about prices, epidemics and other health issues. The interview has been condensed and edited.

You’ve talked very publicly about the problem of rising drug prices. Why not ignore the problem?

Like any problem, they never go away if you ignore them. We’ve been hearing from our customers in the U.S. and elsewhere that pricing is an issue. If our customers are concerned then we have to be thoughtful and engaged about how we explain our position and how we try and make the situation work better.

Doesn’t it make the most business sense to charge as much as you can for every drug?

In countries like Germany, when a medicine goes off patent, the total demand for the molecule increases. What that tells you is, even in a reasonably well-served marketplace there is something that holds people back until the product is generic.

If you look around the developing world it’s obvious that price plays a big role in access, which is why we’ve been so aggressive in terms of trying to make sure that price isn’t a problem for large numbers of people in the emerging markets. Even when you look at the United States — I can’t tell you this is a proven experiment — but if you look at GSK the last five or six medicines we’ve launched, we’ve launched at or below the prices of the technologies that we’re aiming to replace. We’ve never had better new product sales. And the reason why is we’re accessing bigger volume more quickly.

How do shareholders react to these ideas?

Many shareholders care a lot about access to medicine on a global basis. The frustration, of course, even within some of those shareholder organizations is they themselves are sometimes being measured on very short-term return curves.

What is the right time horizon to invest in health care? If you asked an individual on the street, they would surely tell you the right horizon is to maximize or optimize my life-health chances over my life. We ought to be trying to develop a system that is more in step with that desire of the people who ultimately pay for the system.

Has the Affordable Care Act moved the U.S. health care system toward better patient care?

If you look at the way that insurance companies, hospital groups, providers have begun to move, we saw tremendous shifts, even during the period of that legislation being in debate. I really hope, that over time this is going to be able to drive a much more long-term patient-centric approach so that all of us can start to align our outcomes, rewards, penalties, associated with long-term outcomes.

What is the state of public health today? We’re not that far away from the Ebola crisis and we’re dealing with Zika now.

It’s a very risky world, and I think Ebola was a wakeup call. The world was not as prepared as it should have been. And it was a disaster for West Africa. In a way, the world was lucky it wasn’t a disaster for the world. There’s been a lot of work done since at the W.H.O. and other organizations, to try and learn the lessons. There were too many issues, which were still being argued and debated in the middle of the war on Ebola that could have been resolved in the peacetime. That’s still true.

Like what?

Like liability. So when a new technology is developed for a pandemic situation, who’s going to be liable for that?

The second part is that we could invest a relatively small amount to create a much higher standing readiness for biological defense. There’s a group originally formed between Wellcome foundation, Gates Foundation, two or three governments, GSK was involved at the beginning, to try and encourage a more permanent standby readiness of vaccine technology development for the next possible pandemic viruses. Progress is being made on that but it’s still not implemented.