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Life Science Connect and we're here to help . Our

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friend and celebrated biopharma

0:42

opinionator , Allan Shaw , says

0:44

the last mile of the supply chain

0:47

, the part that gets therapies to , and

0:49

indeed into , patients , is twisted

0:51

and broken , that incentives

0:54

work for all the wrong players and that

0:56

patients , physicians , pharmaceutical

0:58

developers , payers and virtually everyone

1:00

except the PBMs are getting short

1:03

shrift as a result . I'm

1:05

Matt Pillar . This is the Business of Biotech , and

1:07

on today's show , Alan and I are back

1:09

together to plane over the business

1:11

of drug distribution what's broken

1:14

, how it might get fixed and

1:16

the signs on the not too distant horizon

1:18

that tell us the time for reform

1:20

just might be nigh . Alan

1:23

, good to see you again .

1:26

Great to see you , matt , and thanks for having me back

1:28

Always , always a pleasure to be with you .

1:31

It always is . I'm always happy to have you back

1:33

and I always look forward to these conversations and

1:36

this one is a little bit outside of the

1:39

wheelhouse of where we

1:41

usually dwell , but nonetheless important

1:43

. I've had multiple conversations recently

1:46

with biotechs that are in

1:48

pre-commercialization mode , that

1:51

means they're in pre-drug distribution mode

1:53

. So this concept , this discussion

1:55

that we're going to have about the way the drugs are distributed

1:58

, who's rewarded , you know , compliance

2:01

to drugs and therapies

2:03

and better outcomes it's absolutely

2:05

relevant to our audience

2:07

. I think and you

2:09

and I had a brief conversation about this a week

2:12

or so ago and I think there are some movements

2:15

in play that might be cracking the door

2:17

open to sort of change the paradigm . So

2:20

I'm going to get your thoughts on that , but to

2:23

sort of get a level set heading

2:25

into the conversation , I'm curious

2:27

if you can just expand

2:29

for us a little bit at the high level on

2:32

what you mean when you talk

2:35

about this convoluted last

2:37

mile of the pharmaceutical supply chain

2:39

and how it works today

2:42

and where you see broken links

2:44

and

2:46

how it works today and where you

2:48

see broken links .

2:53

No thanks , matt . You know I would start off by you know it's kind of like the elephant in the room and

2:55

you know it's something that's . Fortunately , I think the elephant

2:57

is starting to be noticed . You know

2:59

, given the sheer magnitude of the financial

3:01

stakes , it's not surprising

3:04

a cottage industry was created which feasts

3:06

on the inefficiencies and

3:08

a Byzantine relationships embedded

3:10

in the opaque biopharma supply chain

3:12

, With

3:14

high gross to net margins never

3:16

been greater almost 50%

3:19

or higher that neither benefit

3:21

the patient or the innovative drug manufacturer

3:24

, and it's estimated to be approximately

3:27

$250 billion on the table

3:29

annually . And only the middlemen

3:31

, otherwise known as the PBMs , win

3:33

. And

3:36

they do this by extorting ever-increasing

3:38

rebates and discounts in exchange for favorable

3:40

formulary positions .

3:43

It's been this way for quite a while

3:46

. What are your thoughts on

3:48

? How long has the model that we're looking

3:50

at right now , that we see as problematic

3:52

, been in play it

3:56

?

3:56

has been a problem for a long time

3:58

and it continues to be a problem

4:00

. As I like

4:02

to quip , if you make a wrong

4:05

turn and you keep going down the road

4:07

, it's still a wrong turn , and

4:09

you know . I think it's time to get back on the road

4:12

, and this is no different

4:14

, you know , with so much value being

4:16

lost or redirected , particularly

4:19

in a pricing environment that's being challenged

4:22

by gravitational forces reflecting

4:25

the current system , which is apparently

4:27

and increasingly , unsustainable . Um

4:30

, you know this and

4:32

actually you know , while this is all negative

4:34

, it can actually , if

4:37

you , if you look at it , look at it through another lens

4:39

it can actually provide

4:41

an opportunity for the industry to

4:43

start rehabilitating its image . Instead

4:46

of trying to raise drug prices

4:48

, isn't it time

4:50

to start exploring ways to

4:53

extend the commercial supply chain , to

4:55

better engage with patients and

4:57

advance commercial goals , while

4:59

squeezing out the vast waste of legacy

5:01

business practices ?

5:03

Yeah , why do

5:05

you think this is a

5:07

good time to be having this conversation ? You

5:12

know , I

5:15

mean not that there's ever a bad time to have a conversation

5:17

about things that aren't working right , right , but

5:20

you know , I sense that there

5:23

are dynamics that

5:25

make this a a more timely conversation

5:27

than perhaps it might've been a couple of years ago .

5:30

You know , I , I think you

5:33

know we've been hit in the head so many times

5:35

as an industry . Um , you

5:38

know , I think people are starting to

5:40

understand that

5:42

we're not the only ones . He should be getting hit in the

5:44

head is one you

5:47

know , I think that the nature of the

5:49

system being broken is

5:51

increasingly evident

5:54

with the graying

5:56

population that we have . You

5:59

know , and you would

6:01

think that

6:03

you know , the industry continues to raise prices

6:05

. Right , it continues to raise

6:07

prices at a pace that

6:10

outpaces inflation , you

6:12

know , and

6:15

that really underscores the industry being

6:18

tone deaf . And

6:20

right now and I can get into it in a

6:22

little bit , you know , I can get into , you

6:24

know what's happening . But in

6:26

many cases , what's driving

6:28

price increases are actually the PBMs

6:31

themselves , who you

6:33

know , because you know what happens is you raise

6:35

the price but then you're also increasing the

6:37

rebate , so you know the net amount

6:40

that's coming back to the manufacturer

6:42

is pretty negligible , yeah

6:45

, at the end of the day . So

6:47

you know , you know , definition of insanity

6:50

is to do the same thing and expect a different

6:52

outcome . So I don't think

6:54

the industry can continue raising prices

6:56

like they have been and it's

6:58

also continuing to , you know

7:00

, fan the negative perception that

7:03

we have . You know we're not helping ourselves

7:05

by doing it , either economically

7:08

or from a public

7:10

relations perspective . We lose-lose

7:13

. You know the industry's pricing

7:15

headwinds are well known , particularly

7:17

in the face of global cost and containment

7:20

initiatives . Tethered at

7:22

, really tethering . The unsustainable

7:24

nature of our system and

7:27

the aging demographics is only making us

7:29

harder and there's a need to

7:31

change . You know , I mean you

7:34

can point to a lot of things in

7:36

this country where we continue to kick the can

7:38

. You know I don't think it's necessarily

7:40

sustainable . I don't think this one is either

7:42

. So at some point

7:45

it's point , there's going to be a day of reckoning and

7:47

I think there's still an opportunity for

7:49

the industry to control the narrative , as

7:51

opposed to having the narrative controlled for us

7:54

. Yeah .

7:56

You talked about a lot of things in this

7:58

country that are , you

8:00

know , in the throes of being kicked

8:02

down the road , and it's almost you know

8:04

we have this conversation . I almost cynically

8:07

or tongue in cheek , want to ask you like

8:09

, well , why not , why not raise

8:11

price ? I mean , you know , you said we outpace

8:13

the cost of inflation

8:16

, which is that's really saying something , given

8:18

the inflationary period that we're in right now

8:20

, right

8:31

now . But the American public , payers , seem to be begrudgingly dealing with rising

8:33

costs of grocery prices , rising cost of consumer packaged goods I mean

8:35

, automobiles are off the chain

8:37

right now . Real estate is

8:39

out of control , everything's getting more

8:41

expensive and I think

8:43

to consumers anyway , to patients

8:46

, as it were , in this case , in

8:48

all of those industries there are gray

8:51

areas where it's not understood exactly

8:53

who's benefiting or who's getting rich

8:55

on these price increases

8:57

. The

9:00

pharmaceutical last mile supply

9:02

chain , all

9:05

of this expense that that

9:07

people and payers are , are , are

9:10

burdened with , is is

9:12

coming without apology , yet

9:15

we keep paying . Why

9:18

, so ? So why and again

9:20

I asked the question sort of tongue

9:22

in cheek why , why not drugs ? Why

9:24

shouldn't ? Why shouldn't the people who are

9:26

, you know , pulling the wool over our eyes in the

9:28

pharmaceutical industry and making money

9:30

on it , continue to get away with it the way

9:32

that everyone else is right now . That

9:38

sounded very cynical , didn't

9:40

it ?

9:41

you know , you

9:44

know it's , you know , I think you're

9:47

, you're right on on on a lot of different

9:49

levels . You know , I think

9:52

, what's what , where , where the industry

9:54

has to go on this , some of

9:56

these things ? Because if you know , if you buy a car right

9:59

, it comes with a warranty . You

10:02

know , if you go to the ATM machine

10:04

and you don't get your money out , you

10:06

know you have recourse . You

10:09

know if , if

10:11

you , if you , you

10:14

know if you fly in an airline , and

10:16

you know you have recourse . You know

10:19

we , you know when you take our products

10:21

, it either works or doesn't work . There's

10:23

no recourse . So you know

10:25

, I think you know , there

10:28

should probably be more risk

10:30

sharing as part of the answer

10:32

to you know , I think there's

10:34

things that can be done in terms of squeezing

10:36

out costs on the supply

10:38

chain , as we can touch on and go into

10:40

the PBMs , but I also think

10:42

that there's things that we can also further do on

10:44

a risk sharing perspective . You

10:48

know whether you can do it with

10:50

current modalities or you can , certainly . I

10:52

think it lends itself , very much so with

10:54

some of the newer modalities , such as gene editing

10:57

, when you're talking about sticker

10:59

prices that are rather

11:01

significant , you know . So there's going

11:03

to be some risk there . There's gonna be a need for the industry

11:05

to risk share you just , you

11:07

know , you just can't sell pills without it

11:10

being any accountability , or injections without

11:12

it working , you know , and the

11:15

industry is gonna move to that at some

11:17

point . But I think there's a lot of inefficiencies

11:19

and I think the way

11:21

we have historically operated , as

11:24

I touched on , is really

11:26

there's lax transparency , there's

11:29

a lot of different folks involved and

11:31

it's you know why did the chicken cross the

11:34

road ? Because they did it last year and

11:36

it's just like night follows day .

11:38

Yeah , yeah , you've

11:41

called out the PBMs , not

11:44

just because they contribute to excessive costs

11:46

, but I've heard you call them out because

11:49

, in your opinion , they

11:51

contribute to poor patient compliance

11:53

and thus poor health outcomes

11:56

. So explain what you mean by that .

12:00

For the benefit of all . Pharmacy

12:02

benefit managers , or PBMs

12:05

, work on behalf of the health plans

12:07

and employers by creating formularies

12:09

or lists of medicines covered

12:12

by insurance . It's

12:14

important to highlight that PBMs were

12:16

actually created with the objective of negotiating

12:19

lower drug prices while

12:21

enabling patient access to medicines

12:23

. How do you think that's been working

12:25

? Unfortunately

12:27

, it hasn't worked out that way , as

12:30

the PBMs have really lost their way . At

12:33

issue is the convoluted

12:36

and opaque nature of their relationships

12:38

, which greatly affect the cost

12:40

of medicines for hundreds of millions of Americans

12:42

. Greatly affect the cost of medicines for hundreds

12:44

of millions of Americans . Presently , pbms use their market

12:47

power to profit by keeping drug

12:49

prices high , harming

12:59

patients . In biotech innovation , three PBMs CVS , express , grips and OptumRx are integrated with

13:01

pharmacy chains and insurers and control 80% of

13:03

the prescription drug market . This

13:06

dynamic is driven by the rebate

13:08

game , which I'll further elaborate

13:10

on . Pbms

13:12

provide favorable placement on

13:14

formularies , which are the lists of

13:17

medicines covered by health insurances

13:19

, in exchange for rebates they

13:21

receive from drug makers , effectively

13:23

pay to play . Drug makers

13:25

argue that they must raise prices

13:28

to compensate for these rebates , while

13:30

pharmacy benefit managers maintain

13:32

to drug companies raise prices to boost

13:34

profits . In

13:37

practice , this is not much different

13:39

than a traditional retail shelf space for

13:42

other consumer products , different

13:44

than a traditional retail shelf space for other consumer products . You know slotting fees

13:47

paid by retail product manufacturers , whereby commercial success

13:49

can hinge on consumer or patient access

13:51

. Without formulary listing

13:53

, over 95 of the drug

13:55

purchases will go elsewhere because

13:58

of the situation . Rebates are

14:00

a really big factor in the increase of drug prices

14:02

.

14:04

Yeah , what's ? What's

14:07

an alternative ? I mean , you know , this

14:09

is a . This is one of

14:11

those things where the deeper

14:14

you dig , the more convoluted

14:16

you see things are . And I think in some cases

14:18

, when you're in a situation like that , it's more difficult

14:20

to kind of claw your way out of it with a rational

14:22

thought . You're in a situation like that , it's more difficult

14:24

to kind of claw your way out of it with a rational thought . So what is

14:27

an ? Or ? You know the

14:29

alternative .

14:31

You know it's the $250 billion

14:33

question . You know there's a lot

14:35

of money at stake and when you have that level of self-interest

14:38

, you know it's going to be very

14:40

hard to take the candy

14:42

away from those who are , who have it right

14:44

now . There's a lot of , you know , lobbying

14:47

and self-interest groups . But

14:49

you know , I think if we can focus on the

14:51

patient and think

14:54

about the patient and this should be all

14:56

about the patient and the outcomes of

14:58

the patient , you know , I think it's

15:00

easier to get to answers that make sense

15:02

and

15:05

work towards that . Again

15:09

, a lot of this is much easier said than done , but from my experience

15:11

, drug adherence is

15:14

the common denominator for all stakeholders

15:16

and should serve as the foundation of patient

15:19

engagement strategy strategy

15:21

, as patient drug compliance is the biggest

15:23

rate limiting factor in successful outcomes

15:25

. Implementing

15:31

patient loyalty programs that correlate pricing discounts to drug adherence would provide

15:34

a win-win strategy for redirecting middlemen or

15:36

PBM profits back to consumers

15:39

while driving down drug prices

15:41

. Of course , as I said , this

15:43

is much easier said than done . Yeah

15:45

, but I think it's a start to

15:48

. You know , the more the patient takes a drug

15:50

and stays compliant , the drug price

15:52

comes down . So you know you're correlating

15:55

everyone's interests to successful

15:57

outcomes . Somehow , you

16:01

know that gets lost in translation

16:03

you

16:05

know that gets lost in translation .

16:06

So if it , you know , in a transition to that

16:08

model I'm just curious about , curious

16:14

about the economics of it . There there's enough . I mean in your , I guess , general perception

16:16

. There's enough money padded or built

16:19

in to to to allow

16:21

that . Like , as you said , some of these

16:23

new therapies come with an incredible sticker

16:26

price Adherence

16:29

to that down the road . Should

16:32

some of the money that's going to PBMs

16:35

in the form of rebates be reallocated

16:37

? Do you think that the economy of that kind

16:39

of downward scale works

16:42

?

16:43

You know , I think it's certainly in theory

16:46

, it drives alignment . You know , I would

16:48

think if you can drive down

16:50

drug pricing and

16:53

you drive it down by compliance

16:55

, you know

16:57

that should align

17:00

. Yeah , the only person

17:02

that's misaligned or dislocated

17:05

would be the PBMs . The

17:08

idea here is to provide patient

17:10

access , and if you can reduce the

17:12

costs and provide access

17:14

, I think that's a winning

17:16

strategy for patients

17:19

. As I mentioned , the drug prices

17:21

go high , but the

17:23

gross to net discount is really

17:25

the thing that sometimes gets lost in the headlines

17:28

. At the end of the day and

17:30

you know what's the stick of price isn't necessarily

17:33

, certainly not realized by the manufacturer

17:35

. It's really the difference between what the manufacturer

17:37

gets and

17:40

everybody in between .

17:41

Yeah , yeah . And to your point , the

17:44

compliance aspect on the health outcome

17:46

aspect , you know , obviously

17:49

compliance benefits the pharmaceutical

17:52

company , right ? I mean that you

17:54

know , if we're keeping them on the drug

17:56

, we're selling more product . And if the

17:58

health outcome as a result of that compliance

18:00

is positive which in

18:02

theory it would be , if you've built a good

18:05

drug , you're

18:07

also not only selling more product but improving

18:09

that perception of this

18:11

industry that we've talked about on multiple occasions

18:14

. We're

18:17

bottom of the barrel . People like the government

18:19

and airlines and lawyers more than they like

18:21

us .

18:23

It's sad that the only thing that Washington

18:26

agree on is to hate the biopharma

18:28

industry . You know there's no

18:30

consensus anywhere anymore

18:33

, and it's only in our industry that

18:35

there is consensus across the aisles

18:37

.

18:39

Yeah , the federal government . What

18:42

is the bigger question

18:44

is who

18:46

is equipped to

18:49

play a role in changing the paradigm

18:51

. I'm assuming that would include Congress

18:54

and , for the point

18:56

you just made about their disdain

18:59

for this industry , at

19:01

the very least least that disdain indicates

19:03

an appetite for change . So

19:07

so the bigger question is who's involved

19:09

in a change like this , and , and

19:11

like I said , I'm assuming that the

19:14

federal government plays a role in there somewhere

19:16

.

19:17

You know it would be . It'd be great if there was

19:19

a single throat to choke here

19:23

. You know there's a lot of codependency

19:26

and unfortunately reform

19:28

, as we touched on , is much easier said

19:30

than done when considering the

19:32

number of factors and stakeholders that make up

19:34

our complicated and varied healthcare

19:36

landscape

19:39

. Just to show lack of alignment is

19:41

just an illustration of one

19:43

. For example , the pbms put

19:45

an emphasis on minimizing current period

19:47

costs over health care system

19:49

costs . So rather than

19:52

treating somebody with a chronic issue or

19:54

paying for something that would be useful

19:56

, it's in their benefit to pay more

19:58

of the generic cost , lower , less innovative

20:01

product in order just to minimize

20:03

their cost today , even if not

20:06

realize hospitalization down

20:08

the road . And

20:10

that's really a huge systemic

20:12

misalignment that focuses

20:14

on short-term cost and profit as opposed

20:17

to patient outcomes . So

20:19

you know where we kind of we

20:22

can't get out of our own way . You

20:24

know you know where we kind of we can't get out of our own way and

20:31

you know you really need to , I think , reorientate what the outcomes are and what we're trying to , and

20:33

I think you know as an industry , it's an opportunity for us to

20:35

kind of change that , that

20:38

paradigm

20:40

a little bit , or try to at least

20:42

try to control the narrative paradigm

20:45

a little bit , or try to at least try to control the narrative . You know

20:47

, I don't think we really have staked out a position other

20:49

than , uh , focusing on the pbms are better than focusing

20:52

on us

20:57

um , at some pharma companies

21:00

, uh , you know .

21:03

So we're seeing like I think Lilly is

21:05

toying with like a direct to consumer

21:07

model . We see the likes of like

21:09

Mark Cuban playing with this . We

21:11

see Amazon getting in the pharmaceutical

21:14

distribution business . To what

21:16

degree do those moves

21:19

that we see happening across some of those

21:21

companies play into

21:23

this concept ? I mean , in

21:25

my simple mind , I see those

21:28

as favorable indications

21:30

toward change because , at

21:32

the very least , there's a more direct line

21:35

to patients . Do

21:37

you agree or do you see anything problematic

21:39

there ?

21:42

No , I totally agree . I think

21:44

it's absolutely a really , really important

21:47

uh step here . You

21:49

know it's , it's a step towards changing the paradigm

21:51

. You know , historically you've always

21:54

used the , the , the big , the , the whole

21:56

, the drug distributors and

21:58

um , and

22:01

that's how business was done . You

22:03

know , going back to what I said , you know it was just

22:05

the way why the chicken crossed the road . You know this this up , this changes that . You know , going back to what I said , you know it was just the way we that why the chicken crossed

22:07

the road yeah you know this , this up

22:10

, this changes that . you know , and I think

22:12

you're you're you're seeing that lily's

22:14

been doing that uh , in terms

22:16

of , uh , some of the glp

22:18

drugs that they've got , uh , direct

22:21

to consumer , and you know , I

22:23

think some of that also lends itself because some of

22:25

those things are outside of insurance . I

22:27

think you know what , what , what

22:29

Amazon and Cuban

22:31

are doing are more directed to generics , but

22:34

I think it does provide the

22:36

platform that's going to be necessary

22:39

to give people alternative ways of

22:41

distributing drugs . You know

22:43

, I think you know the control

22:46

over the formulary is important because

22:48

that controls reimbursement . You know you got to

22:50

follow the cash you know

22:52

, at the end of the day , follow that , which

22:54

is why I think you know , if you can make the

22:57

rebates part of a compliance program

22:59

, I think you can drive some

23:02

really good outcomes . But

23:06

you know , and cutting out the middleman by

23:09

what those folks are doing is going

23:11

to squeeze out wasteful costs . You

23:13

know , the question is how you can kind of scale

23:15

that out and make it much more pervasive

23:17

to really upset and put pressure

23:20

on the system , because right now I

23:22

think I'd probably call it more of a net and

23:24

a nuance as opposed to

23:26

something that's going to really change

23:28

the way we conduct

23:31

business , I think

23:33

. But I think we also need to be mindful that

23:37

the way care delivery is going

23:39

on is changing . You

23:42

know , I don't think it's as much of us

23:44

selling a pill anymore or

23:47

selling an injection . You know we're selling

23:49

an outcome . You know , when you look at gene

23:51

editing or gene therapy

23:53

or any of those , you know those are almost

23:55

like providing a service . You

23:58

know it's not as much

24:00

of the traditional way we conduct . You

24:03

know you look at digital pharma . You know

24:05

it's all about engaging the consumer

24:07

and educating the consumer , and

24:10

the consumer is playing a much more active role . Let's

24:13

just look at all the commercials we

24:15

watch on tv when we're watching a ball

24:17

game . You know , um

24:19

, in terms of informing consumers . So

24:22

you know , I think we got got to extend that

24:24

and become engaged with

24:26

them . And I think , you know , recognizing

24:28

health care consumerism is here

24:31

to stay is

24:33

really important , and the Internet and e-health

24:35

have facilitated this . Biopharma

24:38

must focus on creating closer relationships

24:40

with patients as well as the other stakeholders

24:42

, other

24:47

stakeholders . The step change towards healthcare consumerism necessitates supporting patients

24:49

on their journey and becoming more engaged and educated in their decision

24:51

making . You

24:53

know , I think a lot of times patients are overwhelmed

24:56

with some of the indications

25:00

and diseases that they have and they don't necessarily

25:02

know where to turn . And I think you

25:04

know , other than just selling them a

25:06

drug , you know , I think you can help them

25:08

with their patient experience and

25:11

I think you know it's going to create

25:14

a lot more loyalty

25:16

with the consumer

25:19

.

25:19

Yeah , yeah , I want

25:21

to drill into that a little bit , a little bit more

25:24

on . You know , the biopharma corporate

25:27

and leadership role and to

25:29

what degree they can play a hand in affecting

25:31

change here . But real quick , before I go there , one

25:34

of the things that I've heard you often

25:36

wax on is

25:38

the influence of

25:41

politic on industry

25:43

during an election year . So I'm

25:45

curious about whether or not the fact that , like

25:48

I asked you earlier , why is this a timely conversation

25:51

to have right now we are in an election

25:53

year we do see quite

25:55

a bit of jockeying for position and

25:58

influence in Congress right now around

26:00

the biopharmaceutical industry , whether it's around

26:02

pricing and benefits or whether

26:05

it's around who we do business with

26:07

of Chinese origin , a

26:09

la the Biosecure Act , which I don't want to get into right

26:11

now . We'll save that for another episode

26:13

. But my point is that we

26:16

see a lot of this kind of positioning happening

26:18

right now , and I think that's probably influenced

26:21

by the fact that it's an election year . What

26:23

impact do you think this

26:26

year of politics could , in

26:30

a positive sense , have on

26:32

at least starting

26:35

the ball rolling a little bit toward change

26:37

?

26:39

Well , I'd say what is positive

26:41

is that you know that we had that first bill

26:43

that got approved in the

26:45

House to lower costs and

26:48

in Transparency Act that was really

26:50

the first bill that I'm aware of

26:52

that's been approved by the House to

26:55

kind of hold PBMs much more accountable

26:57

and ensure health decisions

26:59

are made by patients and doctors and

27:02

not driven by middlemen . At

27:04

the end of the day , you know that

27:07

certainly is a formal recognition

27:09

of the issue . The White House

27:12

has initiated

27:14

discussions at the end of February on the topic

27:17

as well , so it

27:19

certainly seems to be front and center . So

27:21

I would hope , given that it's an

27:23

election year , you know

27:25

we can , you know , use

27:27

our vote , our influence

27:30

and reach out to our senators

27:32

and our congressmen to facilitate

27:35

that For everybody's

27:38

benefit . The

27:40

BIO website actually has

27:43

a place on

27:45

their website where you put in your zip code

27:47

. You know they got the form letter

27:49

and they've got . They can really direct it to whoever

27:52

you need it directed to . So it shouldn't

27:54

be an investment of too much time but

27:56

the impact can be really profound . So

27:59

I would certainly encourage people to do that

28:01

and you know to your

28:03

point . You know in the election year , people

28:06

you know , particularly since they have a target

28:08

that they both agree on . Maybe that's our best protection

28:11

is that they're not going to be able to differentiate ourselves

28:13

themselves by beating on us . I'm

28:17

hoping that the PBMs will bear a bit

28:19

of that as

28:21

well as an actual , as their profile

28:24

gets raised as , in a more

28:26

objective , villainous manner . But

28:32

you know , I think it's only going to be natural

28:34

. You know that

28:36

. You know it's going to put some pressure on the industry

28:39

. You know there's going to be talk about expanding

28:42

IRA . You know . I

28:44

think there's also positive things in there that

28:46

I'm hearing that they may fix the disconnect

28:48

between large and small molecules

28:51

and may make it a little bit easier for , often , drugs

28:53

. So I think there's been some general

28:55

acknowledgement that some of that policy

28:58

has room for improvement

29:01

. So I think , as part of some of the horse

29:04

trading , you know , I think that

29:06

there's some positive in that sense

29:09

. But

29:12

I do think you know we're going to be a punching bag

29:14

, because that's what politicians do , you

29:17

know , I think . You know , I think a lot in my

29:19

view , it's going to be more noise and

29:21

balk than bite , and

29:25

that's obviously to be determined .

29:27

Yeah , yeah , I

29:29

want to get back to the

29:32

biopharma and biotech industry

29:35

role . I mean , it's an interesting time also

29:37

looking at biotech crop

29:39

of young up and comers

29:42

. You know the industry is bouncing back

29:44

, um , you know the the industry's bouncing back

29:47

, uh , uh , it might not be a rapid bounce , but it's a

29:49

. It's a bounce nonetheless . Um , and

29:51

a lot of these , a lot of the biotech execs

29:53

that I spend time talking with are , uh

29:55

, you know , a generation or two removed from you

29:57

, and I , alan , uh , they had to grew up in a

30:00

, in sort of a , you know , put

30:02

push the boundaries and explore new avenues

30:04

kind of a world , and

30:08

and that's good , like , I think it's good as we look forward to

30:10

making making change happen

30:12

at the at the drug distribution level

30:15

. But the question would be like

30:17

what , what can they ? What

30:19

role , what role can can the industry

30:22

, industry leaders , play ? I

30:24

had an interesting conversation just recently with a

30:26

guy . Totally unrelated topic , but I was talking with

30:29

a guy , paul Preeb , who's working with

30:31

me on a , on a project for a single

30:33

use bioprocess manufacturing

30:36

, single use event , right . So totally unrelated to what

30:38

we're talking about right now , but we we started

30:40

talking about standards and he said something that really resonated

30:42

. He said in his capacity

30:44

he hears from a lot of biopharma

30:46

execs and leaders and SMEs who

30:49

constantly refer to standards

30:51

bodies as they and what

30:53

they need to do and they need to . You know

30:55

they need to do this and they need to do that

30:57

, they need to affect this and that . And

31:00

Paul's response was they is us

31:02

like , they is us Like we . If

31:05

you want standards or systems

31:07

or operations to change

31:09

, you can't just sit there and say they

31:11

, you got to get involved . So

31:14

to what degree can industry

31:16

leadership , individuals , people who

31:18

have opinions and want

31:20

to see benefit to patients

31:23

, to want to see benefit to their drug

31:26

distribution models , even before

31:29

they exist ? What

31:32

can they do ? What can they be doing right now ?

31:35

You know , I think we need to kind of

31:37

grow in the same direction , but

31:39

I think , in terms of that , I

31:41

, like the woodpecker , has always been very

31:43

effective . You know you just got to keep pecking

31:45

in that

31:48

regard . But I think , you know , changing

31:50

the way we distribute

31:52

drugs is something that we should all

31:54

think about . You know we

31:57

don't have to cross the road like the chicken . You

31:59

know there are other ways . I think what you

32:01

know , what Amazon and Cuban

32:04

are doing . You know speak , speak

32:06

to that . Direct-to-consumer

32:10

approaches are going to become

32:12

a possibility . So , you

32:15

know , I think it's something to think about . You

32:18

know , I think you know you don't want to necessarily

32:20

be the do mercenaries selling

32:22

? You know mercenaries get a lot of arrows in their

32:24

back . Yeah , I

32:27

think it's something for all of us to continue to think

32:29

about . I would say that , fundamentally

32:32

, though , that you know it's

32:34

really important for us to focus

32:36

on , you know , perhaps , statements of the obvious

32:38

, but first things first . You know

32:40

you need to focus on developing differentiated

32:43

and impactful products , and

32:45

it's critical to really understand what your target

32:48

product profile is . Otherwise

32:50

, it's akin to getting into a car without a destination

32:53

You're never going to get there

32:55

, and , in addition

32:57

to establishing clinical value , which

32:59

I think people always focus on . You

33:02

know you need to really understand , you know how is

33:04

that going to be differentiated , at the

33:06

end of the day , from the standard of care

33:08

and the competitive products that are out there

33:10

? And one area that

33:12

I think people really , really overlook

33:17

, gloss over . I think it's getting , I

33:19

think it's becoming more , but

33:21

I think again , I think it's worth taking

33:23

a survey and seeing where it falls

33:25

, and that is focusing on

33:28

the pharmacoeconomics of a

33:30

product and really able to demonstrate

33:32

the economic value and

33:34

ideally , that should

33:36

really be built into . You know your

33:38

clinical studies as appropriate

33:41

. You know you should be able to remeasure

33:43

I think I touched on it . You know re-hospitalization

33:46

. You know additional

33:48

procedures . You know and

33:51

factor in what are you saving the

33:53

system ? Again , I

33:55

think the emphasis should be on outcomes and

33:58

system savings . You know we

34:01

as a nation , you know , have

34:04

the highest cost per capita on health

34:06

care spend and we have the lowest

34:09

life expectancy in the Western world

34:11

. You know we'll figure . You

34:13

know we're actually spending more for less

34:15

. That's not good , for sure , for sure

34:18

.

34:18

It's not good For sure , for sure

34:20

it's not In

34:23

the meantime , like , in the reality

34:25

that we're in right now , and

34:27

that's all . Great advice , I mean , having a thorough

34:29

understanding of the economic

34:31

impact of your therapy

34:34

gives you , I think , empowerment

34:36

to have a say

34:38

, at least least in the way that these things are

34:40

distributed and who gets paid for them . If

34:44

you're , if you were going to give some advice to someone who's

34:46

on the on the precipice , you know , who's

34:48

about to launch a new therapy

34:51

in the current paradigm , is

34:53

there anything that you can suggest to

34:57

them as to as to how they navigate in

34:59

the reality that we're in right now ? Right , like

35:01

, it's one thing to affect big change

35:03

and these are great ideas , I mean it's and it's

35:05

great to talk about them , uh , but in the paradigm

35:08

that we're in right now , is there anything that they can do to to

35:10

affect , uh , you know , a better outcome

35:13

despite the , the

35:16

money grab ?

35:18

You know , I think you just got to . I think it's

35:21

really blocking and tackling . You know , I

35:23

don't think you can really really

35:27

swim against the tide here . I

35:29

think you just understand what you're up against

35:31

and I think it's

35:33

really again coming back to being able

35:35

to position your drug , understand

35:38

who you're , who , who are the right

35:40

patients for your drug

35:43

. Make sure that you know

35:45

that , that they understand the

35:47

drug , that they can they comply

35:49

and continue taking the drug

35:51

. Making sure , again , whether or not there's pre-authorization

35:54

. You know there's a lot of hoops to get involved

35:56

with this . So you know , you

35:59

know I think an interesting statistic is how

36:01

many scripts actually

36:03

get converted to in and get fulfilled

36:05

. Um , and there's

36:07

a , there's a , there's a big gap there . So

36:10

you know that that's that's money that's falling

36:12

on the ground and patients that are not

36:14

being helped , um . So

36:16

I think there's things that you want to look at in terms

36:19

of ensuring your commercial execution

36:21

. You know there's a reason

36:23

why many drug launches

36:25

for companies get shorted

36:28

by the investors on Wall Street

36:30

, and that's because they

36:32

don't necessarily execute so

36:34

well . So the expectations around

36:36

the drug launch are

36:39

generally disconnected

36:41

from what the ultimate reality is , and

36:44

that inefficiency provides

36:46

an arbitrage opportunity for investors

36:48

. Yeah , you know learning

36:50

. I would certainly go to school and look at

36:52

recent drug launches and look

36:55

at the ones that have worked and look at

36:57

the ones that haven't worked , understand

36:59

why in both cases and

37:02

incorporate those lessons and

37:04

learnings um

37:06

into your plan of action

37:09

.

37:10

Yeah , very good . Uh , what

37:12

? What have I not asked you or

37:14

not not allowed you the time to elaborate

37:16

on in terms of this , uh , the

37:19

this topic and and the ideas around

37:21

affecting change ?

37:24

you know , I I think I would just kind

37:26

of reinforce what

37:28

we've , what we've said , because I think we've

37:30

covered this pretty , pretty well at

37:32

a high level . Um

37:34

, and I would just say that , you

37:36

know , the combination of exposing and

37:39

reforming pbms and

37:51

championing biopharma consumerism would really be a great

37:53

start uh to rehabilitating the biopharma bad boy image that

37:55

we uh have right now , and I think there's a huge , huge opportunity

37:57

. You know , the bar is very low .

38:00

The bar is very low . The

38:02

bar is very low . Yes , yeah

38:05

, well , good stuff . Alan , I appreciate the conversation

38:08

and I mean do you ? You know when

38:10

, when you , when you tackle a

38:12

topic like this on the podcast , where

38:14

you know the concept

38:17

is big and the the

38:19

the momentum that it would take

38:21

to create change is difficult

38:24

to fathom , are

38:27

you comfortable ? Are you comfortable

38:29

? Are you like somebody's got to talk about this stuff

38:31

?

38:33

No , absolutely . I

38:36

mean I'd be happy to talk about the US

38:38

budget deficit . That doesn't seem to be getting a lot of

38:40

ad time either .

38:44

We'll save that for another podcast series

38:46

. Well

38:48

, and I appreciate it . It's an excellent thought

38:51

. And just to reiterate the point that you

38:53

made , I think there is a role for

38:55

virtual everyone in the space

38:57

to play here . Go to

38:59

bio , figure out who your , who your representative

39:02

is , if you haven't done it yet , and

39:04

become a become a champion for the

39:06

cause . I mean , I talked to all

39:08

of you . I talked to all of you , and

39:11

patient outcomes comes up

39:13

in every single conversation , and

39:15

if patient outcomes are important , then this is important

39:18

. So so there you

39:20

go , take action . It's not them

39:22

, it's us .

39:24

We've got to row in the same direction .

39:26

Yeah , alan , thanks for the time

39:28

. I always appreciate it and it's always

39:31

a great conversation .

39:33

Always a pleasure and to be continued

39:35

, thanks again .

39:37

So that's Allan Shaw , I'm Matt Pillar . This

39:39

is the Business of Biotech . We're produced by

39:41

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39:43

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39:58

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