Biogen CEO George Scangos
If you crush drug prices, you’ll have no R&D and no drug pipeline for the future, said Biogen CEO George Scangos while speaking at week’s BIO CEO & Investor conference in New York.
“R&D budgets will go down, and many biotech companies that rely on funding from [venture capitalists] will have less attractive returns,” Scangos said. “They’ll be squeezed, and maybe some new ones won’t get funded.”
This argument was a perfect way for Scangos to rationalize the company’s consistent hiking of its first multiple sclerosis drug, Avonex, approved in 1996. He said that the revenue from Avonex is the reason Biogen has been able to develop more MS drugs.
The Wall Street Journal wrote of Avonex’s price hikes back in October:
Demand for a drug called Avonex has declined every year for the past 10.
Not a problem for its manufacturer. U.S. revenue from the drug has more than doubled in that time, to $2 billion last year.
The key: repeated price increases. The multiple sclerosis drug’s maker, Biogen Inc.,raised its price an average of 16% a year throughout the decade—21 times in all.
Scangos added that “healthy prices” could help ensure a good pipeline. But what’s healthy? Feuerstein nails it:
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
When $BIIB CEO Scangos threatens to stop developing drugs bc of lower prices, he reinforces view profits more impt than patients. #BIOCEO16
— Adam Feuerstein ✡️ (@adamfeuerstein) February 9, 2016
