Payers didn’t have much power in biotech’s old days. For a long time, biotech companies could get away with believing that if they offered patients important new drugs, devices or diagnostics they could essentially impose high prices on U.S. health insurers. Getting data to win over the FDA, physicians, and shareholders was what counted.
Those days are over. The Affordable Care Act is heading toward full implementation, and employers everywhere are screaming for an end to runaway healthcare spending. Payers are looking harder than ever to find ways to cut out waste in the system. Life science investors now increasingly want to know how the new products in the pipeline of today will thrive in the cost-constrained environment of tomorrow.
How is your biotech company adapting to the new reality? This is one of the big questions every life sciences company needs to be thinking about. So I’m excited to pull together a stellar lineup of speakers to discuss this trend at the next big Xconomy event—“Biotech in the Belt-Tightening Era.” This event will be held the afternoon of April 9 at Northeastern University’s new Seattle office at 401 Terry Avenue North.
Here’s who you can expect to hear from:
—Kim Popovits, CEO of Genomic Health (NASDAQ: [[ticker:GHDX]]). This Redwood City, CA-based company has grown into one of the biggest success stories in molecular diagnostics. This company did it by blazing a trail with insurers, persuading them to pay several thousand dollars for a genetic test that can predict whether an individual woman’s breast cancer is likely to recur after surgery, and whether she is likely to benefit from a round of preventive chemotherapy. It took reams of data, and years of persistence. But the company is now building on what it learned from that experience to branch into predictive diagnostic tests for colorectal cancer and prostate cancer patients.
—Risa Stack, general manager of GE’s healthmagination program. Stack recently left her job as a go-to life sciences partner at Kleiner Perkins Caufield & Byers to join GE’s $6 billion healthymagination program. The stated purpose of GE’s initiative is to foster technologies that increase access to healthcare while lowering costs. Like when she was at KPCB, she’s looking for good ideas, and figuring how they might fit into GE’s plans.
—Mitch Gold, the founder and chairman of Seattle-based Alpine Biosciences. Gold is best known as the former CEO of Dendreon. He left the company about a year ago, not too long after his company hit an iceberg known as the Center for Medicare and Medicaid Services, which conducted a lengthy public inquiry in 2011 before it decided that yes, it officially would pay $93,000 a patient for Dendreon’s sipuleucel-T (Provenge). That experience greatly influenced Gold’s thinking about his new immunotherapy venture, which has a stated goal of advancing immunotherapies that work on multiple biologic pathways, to “create a more robust, defined, and effective immune response in a more cost-efficient manner.” This will be Gold’s first public appearance discussing his plans for Alpine Biosciences, and how drug pricing considerations have factored into his strategy.
—Clay Siegall, the CEO of Seattle Genetics (NASDAQ: [[ticker:SGEN]]). Siegall’s company delivered the goods almost two years ago, introducing the first commercially successful “empowered antibody” and the biggest innovation for a couple of rare lymphomas in decades. The company responded by setting a price of $13,500 a dose initially, and increasing it since. Seattle Genetics has so far had good fortune in its dealings with insurers at this price, but I for one am interested in hearing Siegall talk about what kind of prices he believes the company will be able to command for future drugs from its pipeline.
—Scott Ramsey, director of the Institute for Cancer Outcomes Research and Evaluation at the Fred Hutchinson Cancer Research Center. Ramsey, was profiled in these pages last year as a “lonely voice asking tough questions on cancer cost effectiveness.” Some in industry may not like to hear what he has to say, but his voice is an influential one that shouldn’t be ignored. Results from ICORE’s studies will end up being published in peer-reviewed journals, and he intends to put data into a free public resource designed to help patients see where the waste is in cancer treatment, and help patients see where they can get bang for their healthcare buck.
—Mark Litton, co-founder and chief business officer, Alder Biopharmaceuticals. This Bothell, WA-based company was built on the idea of making better/faster/cheaper antibody drugs. Alder is now gathering the kind of data from clinical trials that it believes it will need to satisfy not just the FDA, but payers who will want to know they’re getting a good value.
—Al Luderer, CEO, Seattle-based Integrated Diagnostics. This company, a spinoff from Lee Hood’s group at the Institute for Systems Biology, is preparing to release its first commercial product this spring. It’s a blood-based test that’s supposed to be able to give doctors a clear early warning sign of lung cancer on the move. InDi will surely need to convince physicians this test is worth incorporating into their practice, but the company also started talking to payers before it even designed its all-important prospective clinical trial. I’ll be sure to ask him what he learned from those conversations, and how it influenced the company’s strategy.
—Chad Robins, co-founder and CEO, Seattle-based Adaptive Biotechnologies. Robins is running one of the two aggressive startups in the U.S. using high-speed DNA sequencers to help doctors determine when they have truly wiped out a patient’s blood cancer with standard treatment, or when a previously undetectable malignancy is still hanging around there in the blood. Adaptive started out providing its service to researchers, but it is making the push into the bigger diagnostics market this year, which means it must offer a compelling proposition to payers.
As you can see, we’ve got a diverse group of speakers coming at this question on both the therapeutics and diagnostics side. I’ll have more to say about the agenda for this event in coming weeks. But now is the best time to get your tickets, as we have a President’s Day discount running for the next week. See you there at Northeastern University Seattle on April 9.
