5 biotech CEOs on payers, investors and big bets
The top executives from five biotechs that are developing disruptive therapies discuss how best to deal with payers, the challenges that biotechs face and reception from investors.
Spurred by politics and public backlash, drug pricing has been the hot button issue for the pharma industry for more than two years now. And while how to price your drugs has always been a complex issue for pharma and biotechs alike, this new environment has made it particularly important to start engaging with payers as early in the drug development process as possible.
Every biotech knows that payers are the gatekeepers to the market and, ultimately, to patients. Being on the same page as insurers, regulators and pharmacy benefit managers means one less obstacle once you actually get your product approved.
For companies that are developing new or disruptive technologies — like stem cell therapies meant to treat strokes or microbiome-based diagnostics — being able to educate a payer about your therapy is key to success.
But interacting with payers isn’t the only roadblock small biotechs face when bringing a potentially disruptive therapy to the market — facing pushback from regulators, educating investors and enduring the long stretches between clinical data add to the hurdles.
Recently, BioPharma Dive sat down with the CEOs of several biotechs that are developing disruptive therapies of their own at the BIO CEO conference in New York. The conversation turned to how best to deal with payers, the challenges that biotechs face and reception from investors. Here is what those five executives had to say.
Quotes were edited for space and clarity. The excerpts were pulled from a larger conversation on the biotech industry.
Contact payers early
Gil Van Bokkelen, CEO, Athersys:
You have to start as early as possible in clinical development. There are two levels of engagement with third-party payers. There is working with an intermediary to actually get information based on an approximate therapeutic product profile, as it’s referred to, to try to gauge payer/clinician institutional potential utilization. I think that the companies that are doing it most effectively are the ones that are actually incorporating that early into their clinical development.
The ones that waited until Phase 3 quite honestly have missed a huge opportunity in many instances to gather relevant appropriate data and feedback that's going to guide their development process and also the ultimate decision-making.
Then, ultimately, you have to engage directly with the third-party payers. You've got to be talking to CMS; you’ve got to be talking to the third-party payer institutions. Depending on the country or geography that you're focusing on, it can either be a really complicated process, or it can be fairly streamlined.
Contribute to society
Robert McNeil, CEO, DalCor Pharmaceuticals:
We never fund anything that we can't say is going to save X percentage of a bill in medical care. You have to demonstrate strong medical benefit.
When you start up, what is the issue? The issue is developing drugs for a lot of people to live a lot longer and society has to pay for it somehow. If you do it right, you'll be huge beneficiary to society. You get it wrong; it’s not going to be too good.
Find the unmet need
Pierre Belichard, CEO, Enterome:
At the end of the day we're sitting on tons of data. We put doctors, payers and patients into the same room to ask what can we do with it. It was even before the first clinical trial. It was to figure out what could be the diagnostic that could come out of that data.
So you have to do this very early on and prepare the development of your product depending on how the payers, the doctors and the patients feel about the need of use of the product.
Tell the story
Michael Metzger, President and COO, Syndax:
We have a lead molecule that is in a known class but it is a very different kind of a HDAC inhibitor in the sense of which enzymes it inhibits, and how the effects manifest in various tumor types. So it's very challenging for us to enter the market and educate people around a new mechanism of action and why they should care. And why it is so different in the absence a very strong data that they perhaps want to see at that moment.
There is always this period of time where you're educating with no data, or data that is behind you, versus data that you have that is current. There could be periods of time where you have no catalysts and what do you do with that?
It is all storytelling.
It's a constant challenge to fund your business, tell your story, make sure the emphasis is on the right program at the right time. It’s an incredibly competitive environment and everything is constantly changing.
Taking gutsy bets
Spiro Rombotis, CEO, Cyclacel Pharmaceuticals:
I would call this the loneliness of the long-distance runner, which is biotech entrepreneurship. At my days at Centocor, I was personally thrown out of many physicians’ offices, when as a young aspiring executive I wanted to explain the merits of antibodies. People would throw me out of the office because they thought it would kill people from human antibody reactions . . . Today it is a multi-billion-dollar industry, but you couldn't predict it in the 80s, and Wall Street didn't necessarily want to back it in the beginning. Eventually, the door opened for financing around 1986, [allowing] a lot of companies with no clinical data could show promise. Now we all know the markets are far more sophisticated today, but they aren't necessarily getting it right.
Most of us are not irrational people, not romantics. We act on data. We have to [talk to] physicians, and KOLs, and other investigators, and then have to take a gutsy bet that pharma wouldn’t take. By definition these are lonely events. We need to have a fundamental value system to sustain oneself and one’s team during those difficult periods to ensure that he gets inspiration. We may not be successful, but trying is what matters. What society needs is lots of us doing what we do.
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