This week was all about showing the love—from self-admiration to all-out corporate courting. During a Senate hearing on Tuesday, reps from different areas of the industry offered detailed affirmations about the value they bring to the drug delivery system. A day later, Kite Pharma was well within their right to toot their own horn after getting the nod from the FDA for CAR-T Yescarta and an A+ on innovation from the FDA Commissioner himself. And let’s not forget the dozens of cities that pulled out all the stops to woo Amazon in the company’s search for a new HQ.
Without further delay, here’s The Week That Was.
► PUTTING RARE INTO PERSPECTIVE
The National Organization for Rare Disorders (NORD) released a report last week relating the cost of orphan drugs to total U.S. prescription drug sales. The upshot of the report: despite their increasing numbers in the marketplace, orphan drugs are not driving national drug spending. Of the $450 billion in total U.S. drug sales in 2016, only 7.9% came from orphan drugs. The ~1% of orphan drugs priced in excess of $500,000 per year accounted for only 1.6% of orphan drug spending. Average orphan drug prices were far below this amount. While median annual cost for an orphan drug was over $32,000, the top ten therapies used by the greatest number of patients averaged just under $15,000/year. Although patients have had problems with access, the research found that pharmaceutical companies are doing more to help offset out-of-pocket costs.
► OUR TAKE
Orphan drug prices have been increasingly targeted by payers, press and policymakers; this report provides much needed context to recent headlines about high-priced therapies. While air cover for the orphan drugs is good, the downside is that some statistics become reference points for media in the future. This could result in attempts to make apples-to-apples comparisons with the median annual cost of orphan drugs or the average price of the most used orphan drugs without consideration of key pricing factors: the size of the patient population and the benefits of the medicine. Providing context for pricing decisions in fact sheets and Q&A can help clarify any necessary distinctions.
►AMAZON GETS COURTED
What do the Empire State Building, a cactus and free sandwiches all have in common? They’re among the different tactics cities are using to vie for Amazon’s love and attention. E-commerce/cloud computing giant Amazon is on the hunt for a location for its second headquarters, and the company hasn’t been shy about what it plans to bring to the chosen city—like 50,000 jobs and $5 billion in construction spend. Cue cities all across America (and Canada) pulling out all the stops to show why they are the prime location.
► OUR TAKE
Amazon might need more than 2 days to deliver on this one. When the submission process closed on Thursday, dozens of cities had bid on the headquarters, offering everything from billions in tax breaks to renaming the city (Amazon, GA; Jeff Bezos, Mayor for Life). While cities are often working to land new business to bring jobs and economic development, Amazon’s public bidding process took typical municipal “pitching” to a new level. Not dissimilar from a life sciences company launching a new medicine (where the stakes are high for both patients and the system), Amazon asked city governments to tell their value stories in a way that resonates across many stakeholders. Our favorite? Kansas City Mayor Sly James wrote 1,000 witty product reviews on Amazon, all of which mentioned the greatness of Kansas City. We wouldn’t mind spending a day at his office.
Until next week,
- the Reputation & Risk Management Practice