Sanofi EVP & former Obama admin official Suresh Kumar on the TPP, drug prices, & Dengue
Suresh Kumar doesn't have the most conventional background for a pharmaceutical company executive.
"You know, I could certainly lie to you and say this was the perfect event in life, that I intended to be this much in government and this much in private sector," he told BioPharma Dive in an interview during the JPMorgan Healthcare Conference in San Francisco earlier in January. "That would be a lie."
An Indian-born, high-level veteran of consulting giant Oliver Wyman and pharmaceutical titans Warner Lambert (up until its buyout by Pfizer) and Johnson & Johnson, Kumar has indeed had his feet firmly planted in both the business and the public silos of consumer healthcare.
He served as a special adviser to the Clinton Foundation and worked extensively with global NGOs, as well as major groups like USAID. And then, in 2010, President Obama appointed him to be an Assistant Commerce Secretary in his administration. Kumar was unanimously confirmed to the position and a concurrent role as Director General of the U.S. and Foreign Commercial Service, tasked with overseeing major global trade pushes for the White House.
"So that is my background that has allowed me to touch non-profits, it has allowed me to touch the government," said Kumar. "It has allowed me to touch, obviously, the private sector. I have even worked in the media extensively as a news anchor on Indian television. Going out to a billion people, one face. I was paid $10 dollars per newscast—but that's a different story."
According to Kumar, his rise to a sub-Cabinet level position in the Obama administration was in many ways a product of circumstance. But, as he puts it, "At some point, you do realize that you cannot scale [enriching people's lives] to the extent that you want without working with the government as a partner in this process."
Kumar now serves on Sanofi's executive committee and as Executive Vice President of External Affairs. And his background across the spectrum of worldwide consumer health institutions gives him a unique outlook on some of the most pressing issues facing biopharma in an increasingly globalized market—including those that often pit consumer and patient advocates against drugmakers such as Sanofi.
Note: This interview has been edited for clarity and brevity.
The Trans-Pacific Partnership, patients' access to drugs, and what level of exclusivity pharma can tolerate
BIOPHARMA DIVE: You have a unique perspective on getting pharmaceuticals out to all these countries in the world. Right now, the Trans-Pacific Partnership trade initiative is a hot topic. Pharma companies are very invested in TPP, but there is a contingent out there saying this may have an adverse effect on patients' access to drugs, especially in emerging markets. How do you reconcile that? What is the answer to that criticism?
KUMAR: It is not a privilege to have medicine. That should be a basic human right.
I think if you really look at it, the need for medicine is universal. It is how you get the medicines that is important. I am aware of the TPP, having worked on the TPP when I was in the government. One of the ways trade pacts are supposed to help is through unified regulations, unified rules, taking away the complexity of doing business and unnecessary hurdles so that drugs could reach the patients who need them.
So I think TPP is in the right direction. With respect to pharmaceuticals, the issue which the pharmaceutical industry has rightly had is ensuring a constant stream of innovation which will help alleviate human suffering. That is what we do. That is what we need to do. So in that context, I think we need protection for what is our data.
Some people, who are not innovators, would say there should not be any data exclusivity. Well, the consequences of that is that there will be no research. Consequently, there won't be any drugs. Then the question is, how many years of exclusivity should there be? And that is where the industry position has always been that it should be in the 8 to 10-year range.
BIOPHARMA DIVE: Part of the problem is drugmakers in the U.S. are offered 12 years of data exclusivity under the provisions of the Affordable Care Act while others, like Australia or New Zealand, have a much lower exclusivity threshold. The compromise laid out in the TPP proposal would offer somewhere between 5 and 8 years of data exclusivity. Is that a good balance?
KUMAR: Let me start with a couple of observations. If you look at it, where would you say that there is greater innovation and greater new product development happening? Is it in Australia or the U.S.?
When you look at it, obviously, in that situation it is easy when your relative innovativeness in that industry is poorer. You are going for the lower end of the deal. Unless companies continue to invest in R&D, particularly as people develop resistance to drugs, you are not going to have access to new products coming out. That is the reason we believe that the exclusivity as asked by the industry is right.
BIOPHARMA DIVE: That is the 8 to 10-year level?
KUMAR: Well, no, that is country—
BIOPHARMA DIVE: So 12 years?
KUMAR: If you take the government of the United States, it has a legal provision in place which allows that [12-year] degree of exclusivity. They wouldn't have done that if they thought that was wrong. Now there is an accommodation that is going on as you have these different treaties in place, but it still doesn't—anything less than 12 is not what we were desiring.
There are different points of view. As you know, Senator [Orrin] Hatch (R-UT) has been very vocal on this. He has clearly stated that the inventiveness and innovation which clearly comes from biopharmaceutical cannot just be genericized because a biosimilar is not a bioequivalent. So we must resist the temptation to go that route and to somehow feeling that lesser amount of exclusivity would work.
So that is the challenge. We do hope that better minds will come together and strike an appropriate accommodation.
BIOPHARMA DIVE: So if the ultimate version of TPP that passes is the one that preserves this compromise 5 to 8 years—you are saying pharma won't be happy with that. But is that something the industry could ultimately live with?
KUMAR: You can live with anything at a cost. The larger question is, is society prepared to live with the cost which really doesn't provide the right amount of incentives for the extent of innovation you could have? That is the challenge. The price is right only when those who must buy can afford and when those who must sell can afford to make a profit.
BIOPHARMA DIVE: One big challenge is you've got a lot of politicians with tough words for the industry right now. Pharma is under a much bigger spotlight this election year. Democratic candidates Hillary Clinton and Bernie Sanders have come out against TPP, mostly because they believe 5 to 8 years is too much exclusivity, even some Republicans have been critical of the industry this time around. How does the industry deal with that kind of criticism? How does it effectively communicate its position?
KUMAR: I think it is predictable. Once every four years in this country we have an election. If you have a term and the president survives and is re-elected, then you have once every eight years an issue to be contended with. Those frequencies bring together vitriol and election time rhetoric. That is what is happening.
I think if you are talking of the value of our products, we live in exciting, incredible times. We know the human genome, we understand it better. There's genetic typing. The extent of new products [approved by the FDA]—45 last year versus 28 two years ago—it's phenomenal. It's an exciting time for the industry and consequently also for the people who are suffering. But do you hear that story?
Why do we only focus on negative headlines, like 5,000% price hikes from someone who's not even part of the industry? So part of it is the election rhetoric.
The other part is, what's the right thing to do for the patient? That conversation also needs to be had in the right forum. We talk of healthcare costs and point the finger at pharma, which is only 10% of that cost [in the U.S.] What happened to the other 90%? Is it the silent majority? I would argue that the biggest driver has been labor costs in healthcare—doctors' offices, an immense amount of data processing, administrative costs associated with healthcare, etc. So this conversation needs to occur across the continuum of healthcare.
The pricing conundrum
BIOPHARMA DIVE: Novartis' CEO has said pharma does need to rethink its pricing model significantly and has openly advocated for pay-for-value. What do you think about that?
KUMAR: When I say outcomes, I mean pay for value. We would love it—on record—we would absolutely be part of that consortium, collaboration on value. It can only be done collaboratively. The issue is not fee-for-value or outcomes. Conceptually, everyone got that three, four, five years ago [that this would likely be the trajectory]. The issue is, how will we do this? That's where we want to work with the payers in order to have mechanisms to do it.
To give you an example, [Sanofi] has a terrific product that launched, Praluent—60% reduction in LDL and it's the first major happening in that space in 30 years. So if you look at it, we can do value-based stuff, reduce your LDLs to a certain level. We need to work with partners who equally feel that way.
You can't say, We need fee-for-value but don't know how to administer it. In isolation, it's not going to go anywhere. What you're quoting [Novartis CEO Joe Jimenez] saying—I've been publicly on record saying this for the last five years, both within the government and outside of it. The issue is the industry value chain coming together. A few pilots will create the momentum for change, and I think the advent of tech and so on will take us there.
A pioneering Dengue vaccine & an unusual pathway
BIOPHARMA DIVE: I want to talk about some Sanofi products, specifically one that I'm sure you have an interest in given your global and public health background: The Dengue vaccine. It's already been approved in Mexico, the Phillipines, and Brazil. When are you expecting approval in the U.S. and other markets?
KUMAR: It is the first Dengue vaccine. My first hope is that the U.S. never has Dengue.
The Dengue vaccine is a very interesting story. While much gets spoken about innovation, people rarely understand that there's process innovation, too. This vaccine followed a very unique path.
We looked at disease in disease-burdened countries. Clinical studies will cross 15 countries where there's a huge burden of this disease. More than half the world's population is exposed to Dengue, and the concentration is in these places.
In these countries, over 15 years or 20 years, we have 40,000 patients who we've touched through clinical tests. They were done in endemic countries. The typical pathway used to be U.S. registration followed by western Europe. This stood the model on its head. We said no, the burden is elsewhere, that's where we need to go.
The second thing here is that the success of the vaccine is a function of how robust the immunization effort is. So this is an issue of stopping the problem before it happens. We are incredibly excited about bringing this product to market and we have every confidence that the rest of affected countries will follow through as well.
BIOPHARMA DIVE: What about India, where Dengue is a major problem?
KUMAR: Some would say that the incidence of Dengue is mostly in India. It's also misdiagnosed to a significant extent [in the country]. We did our phase II trials there. If you want to arrest that burden in a fast urbanizing country where sanitation is a challenge, the question in my mind is, Why is this vaccine not approved as yet in India?
And then my second question is, the U.S. spends 18% of its GDP on healthcare, and here we're discussing whether the price is right. India, on the other hand, spends 1% of its GPD on healthcare. Surely that's not right for a country with more than 1 billion people.
Public health is a shared responsibility. That's why we call it public health. So the obligation is going to be in the countries to do what they need to do and for us to do our work. Robustness of the immunization program will be the great indicator. We've noticed in all our clinicals that the incidence of Dengue is highest in the 9-20 age group. They're going to school, hanging out with their friends.
The U.S. approval date is expected to come in 2017. In the 15 countries we've done tests—India was a part of the 15, but we didn't do our phase 3 there because of the timing and the rules associated with getting the right approvals. We wanted to aggressively move forward to develop a vaccine.
But India has appropriate provision in their law and if they need our product, they can have the product. It's the call they need to make.