Pharmaguy's Insights Into Drug Industry News
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Pharmaguy's Insights Into Drug Industry News
Pharmaguy curates and provides insights into selected drug industry news and issues.
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Up Until Now, GSK Bet on Vaccines Rather than Trendy Immuno-Oncology Cancer Treatments

Up Until Now, GSK Bet on Vaccines Rather than Trendy Immuno-Oncology Cancer Treatments | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Bucking biopharma’s trend in 2014, GlaxoSmithKline CEO Andrew Witty swapped off his oncology assets to Novartis, building his company’s position in vaccines and consumer healthcare instead.

 

Fast-forward to the future. After taking flak from prominent investors, Witty continues to defend the logic—and in recent quarters, he's had the numbers to back up that contention. He continues to make the case that high-priced treatments don't make business sense in the long run.

 

Consider immuno-oncology. Speaking Tuesday at the opening of GSK’s Rockville, Maryland, vaccine research site, Witty said that he doesn’t see pricey immunotherapies for cancer, now biopharma’s hottest field, as a “cost-effective … global healthcare solution.”

 

To back up his point, Witty said the number of patients treated by the last 20 top-selling pharma products has dropped “catastrophically” in recent decades.

 

“A blockbuster drug of the '80s probably treated tens or hundreds of millions. In the '90s it was tens of millions, and now you are into tens of thousands," he said. "Vaccines are going the other way.”

 

Witty said believes the returns to shareholders are “very similar” for vaccines and pharmaceuticals. What’s different is the shape of the return curves.

 

 

With vaccines, a business with high barriers to entry driven by volume on a lower price point, companies can eke out similar profits, the CEO said.

 

By focusing on vaccines and consumer healthcare, Witty bet GSK’s future on lower-margin businesses in a move that so far seems to have paid off. Pricing pressure has taken a toll on the pharmaceutical industry, and GSK’s vaccines have outperformed other units in the second and third quarters this year.

Pharma Guy's insight:

Witty said that he doesn’t see pricey immunotherapies for cancer, now biopharma’s hottest field, as a “cost-effective … global healthcare solution.”

 

It's interesting that Witty used "global" to qualify his remark. In the U.S. a pharma company can usually charge what the market will bear. Therefore, I don't see GSK giving up that lucrative market especially after the 21st Century Act has been signed into law.

 

Related article: “When Does It Makes Economic Sense for #Pharma Industry to Develop Vaccines vs Drugs?”: http://sco.lt/7adpSb

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GSK Scouts for Candidates to Replace CEO Witty: @Pharmaguy Rebuffs Offer

GSK Scouts for Candidates to Replace CEO Witty: @Pharmaguy Rebuffs Offer | Pharmaguy's Insights Into Drug Industry News | Scoop.it

GlaxoSmithKline is casting about for a new CEO. Amid shareholder pressure for a breakup or shake-up or both, the company reportedly has asked its headhunting firm to put together a short list of candidates to replace current chief Andrew Witty.


Investors are restless: GSK has suffered a series of blows to its reputation and its income statement. Over the past three years, the company has agreed to pay $3 billion to settle a variety of marketing and manufacturing allegations from the U.S. Department of Justice and almost $500 million to wrap up a bribery scandal in China. Witty's work to rebuild GSK's reputation included an overhaul of sales-rep compensation that some blame for the slow launch of respiratory drugs the company needs to replace the aging--and ailing--Advair. That behemoth drug, long GSK's top seller, has seen sales slump dramatically since last year on generic competition and tough negotiations with U.S. payers.

Pharma Guy's insight:

This just in:

Pharmaguy Rebuffs GSK’s CEO Offer
Sources close to the situation say that Pharmaguy, the 59-year-old blogger and pundit, rebuffed an offer to run GSK., the British pharmaceutical giant. 

"I have other mountains to climb,”" said Pharmaguy, according to these sources.

When asked about the situation, Pharmaguy would not specifically comment on the GSK offer, but did say he planned to climb the 8,611m K2, the world’'s second highest mountain located on the border of Pakistan and China, in June.  “

"One Great Mountain is enough for me,”" said Pharmaguy. As an aside, he noted that K2 is much more of a challenge than Denali, a 20,000-foot peak in Alaska. “I understand that Witty will be climbing Denali at about the same time. Of course, he is less physically fit than I am, so I think that mountain is appropriate for him.”

"I think everybody views GSK as an extraordinary management challenge," said an anonymous analyst. "Everyone's going to want to see a real athlete named to the job."

Finding an athlete who is not already committed to climbing another mountain, however, may not be easy. Ian Read, chief executive of Pfizer, for example, may need a new job soon. But he’ is booked to climb Kangchenjunga, the 8,586m Nepal peak, this fall.

Asked about an approach to Pharmaguy, a GSK spokesman said, "The company doesn't comment on rumor and speculation."
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Tufts' Joseph A. DiMasi Debunks the Andrew Witty R&D Cost Meme

Tufts' Joseph A. DiMasi Debunks the Andrew Witty R&D Cost Meme | Pharmaguy's Insights Into Drug Industry News | Scoop.it

I read with interest your article in FiercePharmaMarketing on pharma pricing debates (March 16, 2016). I have been the principal investigator for the Tufts Center for the Study of Drug Development studies on pharmaceutical R&D costs (including the latest one which is available now in the Journal of Health Economics). It is your reference to that work that I wish to address.

In particular, I would like to correct what I believe is a misinterpretation of something that GSK CEO Andrew Witty stated at a healthcare conference in 2013. Some industry critics have picked up on a comment he was reported to have made, taken it out of context, used it to try to discredit our work and repeated it so often that it has become a meme. The quote that the critics use, without context, is "one of the great myths of the industry," referring to a $1 billion R&D cost figure.

 

The original reporting on Mr. Witty's comments is from Reuters. An explanation by the reporter of what Mr. Witty meant immediately follows the quote in question ("since it was an average figure that includes money spent on drugs that ultimately fail"). That, of course, is what we measured, and our estimates rightfully consider the costs of failures.

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