December 24, 2018 • 24 mins
Some patients can't wait for pharmaceutical companies to develop drugs. They're pushing the drug industry to make the cures they and their loved ones need. But what's good for patients is also good for pharma's profits, creating a web of murky incentives that makes the issue of high drug costs all the more difficult to parse. In episode 8, Bloomberg's Rebecca Spalding talks to these professional patients about their relationships to the big companies whose therapies they need.
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Speaker 1 (00:00):
We spend one and a half times more per person
on healthcare than any other country, but we aren't any
healthier for it. This is one of the reasons that
insurance preimus have gone up three times faster than wages.
That's why so many employers, especially small businesses, are forcing
their employees to pay more for insurance warror dropping the coverage.
(00:26):
It used to seem so easy, a trip to the
doctor's office, a prescription, sometimes a hospital stay. Healthcare plain
and simple. But somewhere along the line, healthcare became an
incredibly complex and lucrative business. It's a world in which
patients can feel unheard and lost, but increasingly some are
(00:46):
making their voices known and fighting back. Welcome to Prognosis,
a podcast about health, medical technology, and the mind blowing
innovation under way across the globe. I'm your host, Michelle
fe Cortes. Today, there are two major power centers in
(01:08):
the drug world, those who make medicines and those who
pay for most of them. That's big pharma and insurers.
These two camps often battle over how healthcare dollars in
the US are spent. But where does that leave patients?
People like you and me. We'll hear from patients who
have taken matters into their own hands by helping pay
(01:29):
for the development of treatments for their own disease. Patients
are fighting for their lives, but while they're at it,
they're often helping the financial interests of drug companies. Companies
have figured this out and are working to cultivate a
new kind of booster, the patients themselves. Here's Bloomberg's biotech
(01:55):
reporter Rebecca Spalding with the story. Here's how the drug
industry works in a nutshell. Farmer makes money when sures
cover their drugs, Ensures save money when they don't. That
(02:16):
was the first thing I learned when I started covering
the healthcare industry. The second thing I learned is a
little more difficult to understand. It's not always obvious who's
on which side. I don't mean pharma and the insurers,
that's easy. I mean all the people in between, hospitals, doctors, politicians, middlemen.
(02:38):
The more you learn about the healthcare industry, the more
you learn that there's a web of murky financial incentives
that can tie actors to one side or the other.
But one thing isn't murky. Patients often end up near
the bottom of this power structure. That becomes clear when
someone gets seriously sick or needs an operation. What seems simple,
(02:59):
I doctor's visit, a prescription, a hospital stay can feel
like falling into a bottomless pit. Some patients find out
their drugs will cost them thousands of dollars. For others,
there's no drug for their condition at all. That's where
people like Bob Coughlin come in. Bob is a lot
of things. His history a politician. Now he works for
(03:21):
the drug industry in the Massachusetts one of the biggest
industry clusters in the world. It's very clear who he
is and what he's about. He has an agenda and
he can't wait to tell you what it is. He's
the CEO of the state's biotechnology trade group. But he's
also a dad and a patient advocate. I'm a completely
recovering politician. I served in elective office, and when I
(03:43):
was in the legislature in Massachusetts, I got a first
you know, firsthand. I was a front row seat as
to weird policy intersected with science. And the reason that
was so important to me is because it's personal. Um,
you know, when I was running for the legislature, my
wife and I were having our third child, and we
(04:03):
found out in utero when my wife was twenty one
weeks pregnant, that that little baby in her belly was
going to have cystic fibrosis. And it really shocked our world.
It shocked us. It was horrible. It was the worst thing,
you know, we've ever been through in our lives. And
you know, I found myself as someone who wasn't a doctor.
(04:24):
I wasn't a scientist, you know what was I was
a member of the legislature in Massachusetts and the most
important thing to me was trying to find a cure
for my kid. And I didn't want to go. I
used to have nightmares about going to his funeral and
I wanted that to stop. And um as a type
of personality, I decided to get involved. And how could
I get involved? I could really work with the biotech industry,
(04:49):
the leaders of industry, to say what can government do
to do better? And this is this is where this
all came about. Cystic Fibrosis is a deadly childhood lung disease.
Back in two thousand two, Bob's son was diagnosed. It
was a death sentence, a genetic defect leads to a
build up a thick mucus in the lungs. It's harder
and harder to breathe. Infections are common as patients age.
(05:12):
Some patients die in their teens, others live longer. At
the time Bob's son was diagnosed, the median age of
survival was about thirty two. You know, I remember when
when I found out when we when Christine and I
found out that we were going to have a kid
with CF, a baby with CF. My first thought was, Okay,
(05:32):
we got to find the doctors that are going to
fix this, that are gonna come up with a cure.
And I talked to some other folks from the CF
community and they said, no, no, no. Most drugs don't
come out of government labs or university towers. To actually
make a drug, kind of drug that Bob's son needs,
(05:53):
you need a pharmaceutical company, and developing most drugs takes time,
usually a decade, and on average costs about two and
a half billion dollars. What's more, drug companies get to
choose which diseases they research and which diseases they don't.
And the sad reality is that some diseases are more
profitable than others. Like so much else in our consumer culture,
(06:19):
diseases have brands, they have cachet cancer is hot. Everyone
wants to cure for Alzheimer's. There's a liver disease that's
particularly buzzy right now since it's tied to obesity, meaning
there's plenty of patients. There's tons of pharmaceutical company backers
and optimistic Wall Street analysts cheering them along the way.
At the time Bob's son was diagnosed, cystic fibrosis was
(06:42):
not on the radar of the pharmaceutical industry, but it
did have one powerful force that would set it apart
from other diseases and would eventually make the industry pay
attention patients and the parents of patients. People like Bob.
A gentleman who's still a mentor to me and one
of my heroes, told me, we're got to go out
(07:05):
and raise money and buy a cure for your kid.
His son had passed away from cystic fibrosis, and he's
dedicated to his son's legacy that he was going to
continue to raise money until there was a cure so
my son won't die. And when he said it was
quite sobering. He said, you have to. We have to
buy a cure. And I remember that like it was
this morning, because who in their right mind would think
(07:28):
that we have to buy cures? Back then, I thought
doctors just did it. Scientists just did it. It was
the right thing to do. I didn't understand the whole
business around it and how difficult it is to actually
develop a therapy, never mind a cure. Bob is a lobbyist,
but he's also it's known as a patient advocate. It's
(07:49):
an idea that's been around for decades, patients fighting for themselves.
But a more recent year, something else has happened. Remember
that web of healthcare and sentence I mentioned, patients are
in there too. The Cystic Fibrosis Foundation was founded in
nine by parents who watched their children die. They vowed
(08:09):
to find a cure. Around that time, the average age
of survival was about ten years old. They raised money
and began funding basic academic research, but they still didn't
have drugs at the time. Pharma wasn't interested to see
(08:31):
a foundation decided they would have to get them interested.
In two thousand, two years before Bob Soun was born,
the foundation made a controversial bet. Rather than fund academic research,
It decided to invest forty million dollars in a small
biotechnology company to find a cure for cystic fibrosis. That
investment eventually turned into the first ever drugs approved that
(08:54):
treat the underlying cause of the disease. Today, Vertex, the
maker of those drugs, is a darling of Wall Street.
Vertex Pharmaceuticals will be presenting new data on its cystic
fibrosis drugs next week. VerTech stock also rising today, and
the company has high hopes for the drug and development.
But it's not just that Vertex sells a successful drug,
(09:16):
it also charges a lot for them, about three hundred
thousand dollars a year. Drug prices have become a huge
issue in the United States for many patients and politicians.
That means railing against the drug companies that invented the products.
But not Bob. He's unapologetic about companies charging that much
for their treatments, especially when it's the insurance companies that
(09:38):
are picking up the tab. People talk about, oh, well,
how can these companies make money off things that were
invented in with within i H funding and hospitals and universities. Well,
they'll sit on a shelf for decades and never turn
into anything that could ever help a patient. If vcs
don't get involved, investors get involved, business people get involved
(09:58):
and actually take that. You know, to use a football
and analogy. The NIH funding and the science can get
you on the field, but you're still gonna go ninety
nine yards to get a touchdown to invent a drug. Well,
that's what businesses do, and it cost money, and it's
high risk, and there needs to be a reward to
incentivize people to do that. And that's why a lot
(10:20):
of people, especially in rear genetic disorders, parents will call
me and they're like, what can we do? Raise money
in investing companies and buy a que for your kid?
And again, it looks like there are deer in headlights
when I say that, because nobody thinks that that's what
you're supposed to do until it happens to them. At
this point in our conversation, I'm wondering how that would
(10:41):
even work buy a cure for your kid? How would
someone actually go about buying a cure? And so is
that really what when you're a patient or organized patient group?
Is that why patients organized? Or can you walk us
through kind of more of that landscape, not just within
the CF world, but other disease others you mentioned, Yeah,
(11:01):
good Disease foundations focus on a few things. First and
foremost awareness, Right, You're not going to raise money to
invest if people aren't aware. Look what folks from the
you know, breast cancer have done around awareness. It's beautiful.
I mean, you raise awareness, then you can raise funds,
and then also patient support and policy and advocacy. Disease
foundations need to support their community, give them access to information,
(11:25):
give them access to support groups, give them access to
you know, use them in a positive way. With politicians. Politicians, Hey,
I was one, right, I listened to the people that
live in my district, my constituents. I didn't want to
meet with the CEOs from companies to hear what they wanted.
I wanted to meet with the people that that lived
in my district that could vote me in office or
vote me out of office. And I'm curious how that
(11:47):
works because you mentioned, you know yourself, that if a
patient came into your office when you're a legislator, I
mean that's you want to talk to. You don't want
to talk to the CEO of my own tech company.
But by virtue. It sort of seems like patients might
be doing the marketing of some of these companies UM,
and you know, they're the ones spreading awareness about the disease,
doing basically free marketing, raising money even in the cases
(12:08):
of CF and other diseases for these companies. The companies
turn around and to your point, you know, these these
treatments can cost hundreds of thousands of dollars, So do
patients help companies charge those those rates? Or I could
see how a cynic would look at it that way.
And again is speaking as a CF dad. I've sat
with many CF patients and and CF families, most i
(12:31):
should say, more CF moms and dads than patients. To
explain that when a drug like UM, like Kaleitako, which
was the first drug, was priced at you know, keep
in mind this is before discount of rebates. That's a
whole different animal that we can get into as it
relates to the future of healthcare. But let's say the
list price was you know, three d thousand dollars. That's
(12:52):
not in a sense to pay for Kalitako, that's to
pay for the next drug. In other words, Vertex has
invested over nine billion dollars to get to a point
where they've got a drug for fift oft People think
of the revenue model here. This is going to be expensive,
and again it will save money to the health care
(13:13):
system over time and costs avoided later. But we don't
have a payer system that tracks costs avoided. For all
the money Bob is raised for disease research and the
industry at large, his son still doesn't have a cure.
Vertex has drugs only work in about half of all patients.
(13:36):
The company is researching promising drug combinations it hopes will
help reach more. Bob hopes they'll work for his son.
That might be why he's not as concerned about what
the current treatments cost. Vertex can charge as much as
it wants as long as it keeps going. They don't
have one that works for my son's mutation yet. Hope
(13:57):
to God, I think the next one will work. All
night work, the triple will work for him. I'm so confident.
I've never been this optimistic. They're confident. In the sixteen
years that he's been alive, but the clock is ticking.
He's not getting any healthier, so he gets sicker and
sicker every day, so we need this to happen. But
let's go back to the therapies that existed, the chronic therapies,
(14:19):
the antibiotics, the anti mucalytics, the CHESSPT, the constant clean
outs in the hospital, the dozens, if not hundreds of
pancreatic enzymes that these kids need to take every day
just to eat food. These are expensive patients as and
they still get sicker and sicker every day and ultimately die.
(14:40):
You know, they ultimately need a transplant of sort, whether
it's a liver transplant like in my son's case. In
most cases it gets to the point where they need
a lung transplant, and then they die. And it's it's horrible.
It's a horrible, horrible thing, and it's a very very
expensive thing. It's it's difficult to talk about dollars and
(15:00):
sense when you're thinking about a loved one's life. Remember
some of those hidden incentives I mentioned at the beginning
of the episode, this is one of them. No matter
how much patients may criticize high drug prices, the reality
is that insurance companies don't develop drugs. Pharma does. If
you're dying, it's a drug made by a drug company
(15:22):
that might save your life. Pharma knows this, and they
know that patients are a lot more sympathetic a voice
than a CEO. That's why they give patient groups so
much funding. Kaiser Health News found that the pharmaceutical industry
gave patient groups a hundred and sixteen million dollars in
two thousand fifteen. The links are so interconnected that pharma
(15:44):
companies now have whole divisions dedicated to patient advocacy. Just
like press offices handle a company's relationships with reporters, patient
advocacy divisions work with patients, the awareness that patients raise,
the meanings they arrange with politicians. It is like the
one Bob mentioned that helps patients, but it also helps pharma.
(16:07):
Ever go on a walk or run that benefits disease
research next time, look at who the sponsors are. You
may be surprised to see if pharmaceutical company listed the
generous sponsors who make this possible. Here today, this this
event has grown so much over the last five years
that we have to have it in a hotel now.
We couldn't fit in another space, and we couldn't do
(16:27):
it without our sponsors. For you folks that are trying
to log onto the Internet. The password is actually Surrepta
is hiring capital s. There is no periods in there.
And how ironic is it that the password name is
actually that Surreptor is hiring. Like, take it. That's a
sponsoring opportunity right there. It's pretty clever. Ladies and gentlemen, please,
(16:51):
that's Bob. A few weeks after I spoke to him,
presiding over an industry conference about how to best work
with patients. The summit was held at a hotel and
Cambridge and sponsored by some of the largest biotechnology companies
in town. Drug executives mingled with disease advocates over pastries
and artisanal coffee. If I hadn't already known about the ties,
(17:12):
the scene might have struck me as bizarre. One of
the patient advocates who spoke at the meeting you just
heard was a woman named Laura Greco. Laura used to
be a lawyer. She's in her forties and has two
children at home. A few years ago, she learned she
had lung cancer. Laura never smoked, but she resents the
(17:36):
fact that that's usually the first question she's asked when
she tells people her diagnosis. Even if she did smoke.
Does that mean she deserves to die? Nobody wants cancer,
But if all the cancers out there long as high
on the list of bad ones, many cases, it's a
death sentence. Laura wants to change that by doing many
(17:56):
of the things that the cystic fibrosis community once did,
raise awareness about the disease and fund basic research to
help make pharma pay more attention. In a way, I
thank god for the pharmaceutical companies because UM, lung cancer
has historically been ignored by our federal government. Lung cancer
is responsible for of all cancer deess and yet receives
(18:20):
only six percent of federal funding. So re word for pharma. UM.
Seeing the huge potential of what is a lung cancer,
I don't think I'd be alive today, you know. I'm
very thankful to them on the one hand. On the
other hand, they're obviously problems, right. I mean, the drug
I'm on is about fifteen a long, which is a
(18:43):
lot of money, And of course my insurance does cover it,
and there's a co paid cards, so I pay five
dollars a month, No big deal, right, But UM, if
I were in Medicare or Medicaid, I would pay a
lot more than that. That doesn't strike me as very fair,
and it doesn't strike me as a viable economic model
to charge someone you know, over a hundred thousand dollars
(19:07):
a year for a drug to keep them alive. But
she has some words for drug executives, and she wasn't
afraid to share them when she was on the panel
at the Patient's Summit in Cambridge, like about how expensive
it is for patients like her to participate in the
clinical studies pharma so desperately needs. You know, Boston is
not cheap. I think you got to know that every
(19:29):
time we come here in seven hundreds, not thousands of dollars,
and none of that is compensated by the trials and
in matas I've been told there's a law about this.
Let's change that um clinical trial participate travel costs and
at earlier in SPAT should begin to page on clinical trials.
(19:52):
It's you know, heart time valuable and certainly we should
reimburse just for our costs and getting there. As she speaks,
advising on everything from how to share clinical trial results
to not patronizing patients by handing out magnets, I noticed
executives around the room taking out their notebooks and writing
(20:13):
down her advice. After the panel, I spoke to Laura
outside the hotel asked her what her thoughts were on
the pharmaceutical industry. In part, she's grateful to them because
they developed the drugs she's on, but another part of
her thinks they don't really get it. Offering her a
magnet when she's a stage for a lung cancer patient
is not the kind of engagement she's looking for. She
(20:36):
wants better drugs, more funding, more research. My end goal
is to live. My end goal is to survive. That's
really the ultimate goal. UM. But you know, barring living, UM,
I still think I'll be successful if I am able
to look at my kids and say, look, I tried
(20:58):
everything I could to be alive, and I hopefully move
that needle so that parents who get a lung cancer
diagnosis UM sometime in the future aren't quite as devastated
as I was when I was diagnosed. I mean, it's
still probably going to be the worst day of their life,
(21:21):
but maybe one day, UM, and one day soon, someone
can be diagnosed with lung cancer and not be the
death sentence it usually is. That's Bob's goal too. I
think patients do help companies succeed when they should because
(21:43):
it's in their own it's in my son's best interest
for me to help any company that is doing CF
research and hopefully, you know, these drugs get priced right
that will in a way that will help the companies
get the money they invested back plus a reasonable and
I say reasonable profit and still allow enough money for
future investment for the next drug. If if Kaletko wasn't
(22:09):
successful in our comedy, wasn't successful, and Samedko wasn't successful,
my kid wouldn't have a drug out of Vertex. And hey,
I don't maybe I sound selfish, but I got into
this to help my own kid, and I'm not going
to stop until there's something for him. And that's it
(22:41):
for this week's prognosis. This season, we've been exploring the
edge of innovation in medicine. It's not limited to one group.
A revolution is underway in pharmaceutical laboratories, sure, but also
on people's kitchen tables and in their garages. Whether you're
interested in rare diseases that affect one in a million
people or the genes found in everyone, change is coming.
(23:06):
Thank you so much for listening. To Prognosis. This is
the last episode in our series. If you like the show,
please head on over to Apple Podcasts or wherever you
listen to rate and review us. It is so helpful.
If you've listened to all eight episodes, awesome, thanks so much.
If you haven't, please go back and check them out.
(23:26):
Let us know what you think. We're still deep into
healthcare and you can see what we're up to on
Bloomberg's Prognosis page. That's bloomberg dot com slash prognosis. This
episode was produced by Lindsay Cratterwell. Our story editor was
Drew Armstrong. Thanks also to Liz Smith, francesco Leavia's head
of Bloomberg Podcasts. Thanks for being with us.
We spend one and a half times more per person
on healthcare than any other country, but we aren't any
healthier for it. This is one of the reasons that
insurance preimus have gone up three times faster than wages.
That's why so many employers, especially small businesses, are forcing
their employees to pay more for insurance warror dropping the coverage.
(00:26):
It used to seem so easy, a trip to the
doctor's office, a prescription, sometimes a hospital stay. Healthcare plain
and simple. But somewhere along the line, healthcare became an
incredibly complex and lucrative business. It's a world in which
patients can feel unheard and lost, but increasingly some are
(00:46):
making their voices known and fighting back. Welcome to Prognosis,
a podcast about health, medical technology, and the mind blowing
innovation under way across the globe. I'm your host, Michelle
fe Cortes. Today, there are two major power centers in
(01:08):
the drug world, those who make medicines and those who
pay for most of them. That's big pharma and insurers.
These two camps often battle over how healthcare dollars in
the US are spent. But where does that leave patients?
People like you and me. We'll hear from patients who
have taken matters into their own hands by helping pay
(01:29):
for the development of treatments for their own disease. Patients
are fighting for their lives, but while they're at it,
they're often helping the financial interests of drug companies. Companies
have figured this out and are working to cultivate a
new kind of booster, the patients themselves. Here's Bloomberg's biotech
(01:55):
reporter Rebecca Spalding with the story. Here's how the drug
industry works in a nutshell. Farmer makes money when sures
cover their drugs, Ensures save money when they don't. That
(02:16):
was the first thing I learned when I started covering
the healthcare industry. The second thing I learned is a
little more difficult to understand. It's not always obvious who's
on which side. I don't mean pharma and the insurers,
that's easy. I mean all the people in between, hospitals, doctors, politicians, middlemen.
(02:38):
The more you learn about the healthcare industry, the more
you learn that there's a web of murky financial incentives
that can tie actors to one side or the other.
But one thing isn't murky. Patients often end up near
the bottom of this power structure. That becomes clear when
someone gets seriously sick or needs an operation. What seems simple,
(02:59):
I doctor's visit, a prescription, a hospital stay can feel
like falling into a bottomless pit. Some patients find out
their drugs will cost them thousands of dollars. For others,
there's no drug for their condition at all. That's where
people like Bob Coughlin come in. Bob is a lot
of things. His history a politician. Now he works for
(03:21):
the drug industry in the Massachusetts one of the biggest
industry clusters in the world. It's very clear who he
is and what he's about. He has an agenda and
he can't wait to tell you what it is. He's
the CEO of the state's biotechnology trade group. But he's
also a dad and a patient advocate. I'm a completely
recovering politician. I served in elective office, and when I
(03:43):
was in the legislature in Massachusetts, I got a first
you know, firsthand. I was a front row seat as
to weird policy intersected with science. And the reason that
was so important to me is because it's personal. Um,
you know, when I was running for the legislature, my
wife and I were having our third child, and we
(04:03):
found out in utero when my wife was twenty one
weeks pregnant, that that little baby in her belly was
going to have cystic fibrosis. And it really shocked our world.
It shocked us. It was horrible. It was the worst thing,
you know, we've ever been through in our lives. And
you know, I found myself as someone who wasn't a doctor.
(04:24):
I wasn't a scientist, you know what was I was
a member of the legislature in Massachusetts and the most
important thing to me was trying to find a cure
for my kid. And I didn't want to go. I
used to have nightmares about going to his funeral and
I wanted that to stop. And um as a type
of personality, I decided to get involved. And how could
I get involved? I could really work with the biotech industry,
(04:49):
the leaders of industry, to say what can government do
to do better? And this is this is where this
all came about. Cystic Fibrosis is a deadly childhood lung disease.
Back in two thousand two, Bob's son was diagnosed. It
was a death sentence, a genetic defect leads to a
build up a thick mucus in the lungs. It's harder
and harder to breathe. Infections are common as patients age.
(05:12):
Some patients die in their teens, others live longer. At
the time Bob's son was diagnosed, the median age of
survival was about thirty two. You know, I remember when
when I found out when we when Christine and I
found out that we were going to have a kid
with CF, a baby with CF. My first thought was, Okay,
(05:32):
we got to find the doctors that are going to
fix this, that are gonna come up with a cure.
And I talked to some other folks from the CF
community and they said, no, no, no. Most drugs don't
come out of government labs or university towers. To actually
make a drug, kind of drug that Bob's son needs,
(05:53):
you need a pharmaceutical company, and developing most drugs takes time,
usually a decade, and on average costs about two and
a half billion dollars. What's more, drug companies get to
choose which diseases they research and which diseases they don't.
And the sad reality is that some diseases are more
profitable than others. Like so much else in our consumer culture,
(06:19):
diseases have brands, they have cachet cancer is hot. Everyone
wants to cure for Alzheimer's. There's a liver disease that's
particularly buzzy right now since it's tied to obesity, meaning
there's plenty of patients. There's tons of pharmaceutical company backers
and optimistic Wall Street analysts cheering them along the way.
At the time Bob's son was diagnosed, cystic fibrosis was
(06:42):
not on the radar of the pharmaceutical industry, but it
did have one powerful force that would set it apart
from other diseases and would eventually make the industry pay
attention patients and the parents of patients. People like Bob.
A gentleman who's still a mentor to me and one
of my heroes, told me, we're got to go out
(07:05):
and raise money and buy a cure for your kid.
His son had passed away from cystic fibrosis, and he's
dedicated to his son's legacy that he was going to
continue to raise money until there was a cure so
my son won't die. And when he said it was
quite sobering. He said, you have to. We have to
buy a cure. And I remember that like it was
this morning, because who in their right mind would think
(07:28):
that we have to buy cures? Back then, I thought
doctors just did it. Scientists just did it. It was
the right thing to do. I didn't understand the whole
business around it and how difficult it is to actually
develop a therapy, never mind a cure. Bob is a lobbyist,
but he's also it's known as a patient advocate. It's
(07:49):
an idea that's been around for decades, patients fighting for themselves.
But a more recent year, something else has happened. Remember
that web of healthcare and sentence I mentioned, patients are
in there too. The Cystic Fibrosis Foundation was founded in
nine by parents who watched their children die. They vowed
(08:09):
to find a cure. Around that time, the average age
of survival was about ten years old. They raised money
and began funding basic academic research, but they still didn't
have drugs at the time. Pharma wasn't interested to see
(08:31):
a foundation decided they would have to get them interested.
In two thousand, two years before Bob Soun was born,
the foundation made a controversial bet. Rather than fund academic research,
It decided to invest forty million dollars in a small
biotechnology company to find a cure for cystic fibrosis. That
investment eventually turned into the first ever drugs approved that
(08:54):
treat the underlying cause of the disease. Today, Vertex, the
maker of those drugs, is a darling of Wall Street.
Vertex Pharmaceuticals will be presenting new data on its cystic
fibrosis drugs next week. VerTech stock also rising today, and
the company has high hopes for the drug and development.
But it's not just that Vertex sells a successful drug,
(09:16):
it also charges a lot for them, about three hundred
thousand dollars a year. Drug prices have become a huge
issue in the United States for many patients and politicians.
That means railing against the drug companies that invented the products.
But not Bob. He's unapologetic about companies charging that much
for their treatments, especially when it's the insurance companies that
(09:38):
are picking up the tab. People talk about, oh, well,
how can these companies make money off things that were
invented in with within i H funding and hospitals and universities. Well,
they'll sit on a shelf for decades and never turn
into anything that could ever help a patient. If vcs
don't get involved, investors get involved, business people get involved
(09:58):
and actually take that. You know, to use a football
and analogy. The NIH funding and the science can get
you on the field, but you're still gonna go ninety
nine yards to get a touchdown to invent a drug. Well,
that's what businesses do, and it cost money, and it's
high risk, and there needs to be a reward to
incentivize people to do that. And that's why a lot
(10:20):
of people, especially in rear genetic disorders, parents will call
me and they're like, what can we do? Raise money
in investing companies and buy a que for your kid?
And again, it looks like there are deer in headlights
when I say that, because nobody thinks that that's what
you're supposed to do until it happens to them. At
this point in our conversation, I'm wondering how that would
(10:41):
even work buy a cure for your kid? How would
someone actually go about buying a cure? And so is
that really what when you're a patient or organized patient group?
Is that why patients organized? Or can you walk us
through kind of more of that landscape, not just within
the CF world, but other disease others you mentioned, Yeah,
(11:01):
good Disease foundations focus on a few things. First and
foremost awareness, Right, You're not going to raise money to
invest if people aren't aware. Look what folks from the
you know, breast cancer have done around awareness. It's beautiful.
I mean, you raise awareness, then you can raise funds,
and then also patient support and policy and advocacy. Disease
foundations need to support their community, give them access to information,
(11:25):
give them access to support groups, give them access to
you know, use them in a positive way. With politicians. Politicians, Hey,
I was one, right, I listened to the people that
live in my district, my constituents. I didn't want to
meet with the CEOs from companies to hear what they wanted.
I wanted to meet with the people that that lived
in my district that could vote me in office or
vote me out of office. And I'm curious how that
(11:47):
works because you mentioned, you know yourself, that if a
patient came into your office when you're a legislator, I
mean that's you want to talk to. You don't want
to talk to the CEO of my own tech company.
But by virtue. It sort of seems like patients might
be doing the marketing of some of these companies UM,
and you know, they're the ones spreading awareness about the disease,
doing basically free marketing, raising money even in the cases
(12:08):
of CF and other diseases for these companies. The companies
turn around and to your point, you know, these these
treatments can cost hundreds of thousands of dollars, So do
patients help companies charge those those rates? Or I could
see how a cynic would look at it that way.
And again is speaking as a CF dad. I've sat
with many CF patients and and CF families, most i
(12:31):
should say, more CF moms and dads than patients. To
explain that when a drug like UM, like Kaleitako, which
was the first drug, was priced at you know, keep
in mind this is before discount of rebates. That's a
whole different animal that we can get into as it
relates to the future of healthcare. But let's say the
list price was you know, three d thousand dollars. That's
(12:52):
not in a sense to pay for Kalitako, that's to
pay for the next drug. In other words, Vertex has
invested over nine billion dollars to get to a point
where they've got a drug for fift oft People think
of the revenue model here. This is going to be expensive,
and again it will save money to the health care
(13:13):
system over time and costs avoided later. But we don't
have a payer system that tracks costs avoided. For all
the money Bob is raised for disease research and the
industry at large, his son still doesn't have a cure.
Vertex has drugs only work in about half of all patients.
(13:36):
The company is researching promising drug combinations it hopes will
help reach more. Bob hopes they'll work for his son.
That might be why he's not as concerned about what
the current treatments cost. Vertex can charge as much as
it wants as long as it keeps going. They don't
have one that works for my son's mutation yet. Hope
(13:57):
to God, I think the next one will work. All
night work, the triple will work for him. I'm so confident.
I've never been this optimistic. They're confident. In the sixteen
years that he's been alive, but the clock is ticking.
He's not getting any healthier, so he gets sicker and
sicker every day, so we need this to happen. But
let's go back to the therapies that existed, the chronic therapies,
(14:19):
the antibiotics, the anti mucalytics, the CHESSPT, the constant clean
outs in the hospital, the dozens, if not hundreds of
pancreatic enzymes that these kids need to take every day
just to eat food. These are expensive patients as and
they still get sicker and sicker every day and ultimately die.
(14:40):
You know, they ultimately need a transplant of sort, whether
it's a liver transplant like in my son's case. In
most cases it gets to the point where they need
a lung transplant, and then they die. And it's it's horrible.
It's a horrible, horrible thing, and it's a very very
expensive thing. It's it's difficult to talk about dollars and
(15:00):
sense when you're thinking about a loved one's life. Remember
some of those hidden incentives I mentioned at the beginning
of the episode, this is one of them. No matter
how much patients may criticize high drug prices, the reality
is that insurance companies don't develop drugs. Pharma does. If
you're dying, it's a drug made by a drug company
(15:22):
that might save your life. Pharma knows this, and they
know that patients are a lot more sympathetic a voice
than a CEO. That's why they give patient groups so
much funding. Kaiser Health News found that the pharmaceutical industry
gave patient groups a hundred and sixteen million dollars in
two thousand fifteen. The links are so interconnected that pharma
(15:44):
companies now have whole divisions dedicated to patient advocacy. Just
like press offices handle a company's relationships with reporters, patient
advocacy divisions work with patients, the awareness that patients raise,
the meanings they arrange with politicians. It is like the
one Bob mentioned that helps patients, but it also helps pharma.
(16:07):
Ever go on a walk or run that benefits disease
research next time, look at who the sponsors are. You
may be surprised to see if pharmaceutical company listed the
generous sponsors who make this possible. Here today, this this
event has grown so much over the last five years
that we have to have it in a hotel now.
We couldn't fit in another space, and we couldn't do
(16:27):
it without our sponsors. For you folks that are trying
to log onto the Internet. The password is actually Surrepta
is hiring capital s. There is no periods in there.
And how ironic is it that the password name is
actually that Surreptor is hiring. Like, take it. That's a
sponsoring opportunity right there. It's pretty clever. Ladies and gentlemen, please,
(16:51):
that's Bob. A few weeks after I spoke to him,
presiding over an industry conference about how to best work
with patients. The summit was held at a hotel and
Cambridge and sponsored by some of the largest biotechnology companies
in town. Drug executives mingled with disease advocates over pastries
and artisanal coffee. If I hadn't already known about the ties,
(17:12):
the scene might have struck me as bizarre. One of
the patient advocates who spoke at the meeting you just
heard was a woman named Laura Greco. Laura used to
be a lawyer. She's in her forties and has two
children at home. A few years ago, she learned she
had lung cancer. Laura never smoked, but she resents the
(17:36):
fact that that's usually the first question she's asked when
she tells people her diagnosis. Even if she did smoke.
Does that mean she deserves to die? Nobody wants cancer,
But if all the cancers out there long as high
on the list of bad ones, many cases, it's a
death sentence. Laura wants to change that by doing many
(17:56):
of the things that the cystic fibrosis community once did,
raise awareness about the disease and fund basic research to
help make pharma pay more attention. In a way, I
thank god for the pharmaceutical companies because UM, lung cancer
has historically been ignored by our federal government. Lung cancer
is responsible for of all cancer deess and yet receives
(18:20):
only six percent of federal funding. So re word for pharma. UM.
Seeing the huge potential of what is a lung cancer,
I don't think I'd be alive today, you know. I'm
very thankful to them on the one hand. On the
other hand, they're obviously problems, right. I mean, the drug
I'm on is about fifteen a long, which is a
(18:43):
lot of money, And of course my insurance does cover it,
and there's a co paid cards, so I pay five
dollars a month, No big deal, right, But UM, if
I were in Medicare or Medicaid, I would pay a
lot more than that. That doesn't strike me as very fair,
and it doesn't strike me as a viable economic model
to charge someone you know, over a hundred thousand dollars
(19:07):
a year for a drug to keep them alive. But
she has some words for drug executives, and she wasn't
afraid to share them when she was on the panel
at the Patient's Summit in Cambridge, like about how expensive
it is for patients like her to participate in the
clinical studies pharma so desperately needs. You know, Boston is
not cheap. I think you got to know that every
(19:29):
time we come here in seven hundreds, not thousands of dollars,
and none of that is compensated by the trials and
in matas I've been told there's a law about this.
Let's change that um clinical trial participate travel costs and
at earlier in SPAT should begin to page on clinical trials.
(19:52):
It's you know, heart time valuable and certainly we should
reimburse just for our costs and getting there. As she speaks,
advising on everything from how to share clinical trial results
to not patronizing patients by handing out magnets, I noticed
executives around the room taking out their notebooks and writing
(20:13):
down her advice. After the panel, I spoke to Laura
outside the hotel asked her what her thoughts were on
the pharmaceutical industry. In part, she's grateful to them because
they developed the drugs she's on, but another part of
her thinks they don't really get it. Offering her a
magnet when she's a stage for a lung cancer patient
is not the kind of engagement she's looking for. She
(20:36):
wants better drugs, more funding, more research. My end goal
is to live. My end goal is to survive. That's
really the ultimate goal. UM. But you know, barring living, UM,
I still think I'll be successful if I am able
to look at my kids and say, look, I tried
(20:58):
everything I could to be alive, and I hopefully move
that needle so that parents who get a lung cancer
diagnosis UM sometime in the future aren't quite as devastated
as I was when I was diagnosed. I mean, it's
still probably going to be the worst day of their life,
(21:21):
but maybe one day, UM, and one day soon, someone
can be diagnosed with lung cancer and not be the
death sentence it usually is. That's Bob's goal too. I
think patients do help companies succeed when they should because
(21:43):
it's in their own it's in my son's best interest
for me to help any company that is doing CF
research and hopefully, you know, these drugs get priced right
that will in a way that will help the companies
get the money they invested back plus a reasonable and
I say reasonable profit and still allow enough money for
future investment for the next drug. If if Kaletko wasn't
(22:09):
successful in our comedy, wasn't successful, and Samedko wasn't successful,
my kid wouldn't have a drug out of Vertex. And hey,
I don't maybe I sound selfish, but I got into
this to help my own kid, and I'm not going
to stop until there's something for him. And that's it
(22:41):
for this week's prognosis. This season, we've been exploring the
edge of innovation in medicine. It's not limited to one group.
A revolution is underway in pharmaceutical laboratories, sure, but also
on people's kitchen tables and in their garages. Whether you're
interested in rare diseases that affect one in a million
people or the genes found in everyone, change is coming.
(23:06):
Thank you so much for listening. To Prognosis. This is
the last episode in our series. If you like the show,
please head on over to Apple Podcasts or wherever you
listen to rate and review us. It is so helpful.
If you've listened to all eight episodes, awesome, thanks so much.
If you haven't, please go back and check them out.
(23:26):
Let us know what you think. We're still deep into
healthcare and you can see what we're up to on
Bloomberg's Prognosis page. That's bloomberg dot com slash prognosis. This
episode was produced by Lindsay Cratterwell. Our story editor was
Drew Armstrong. Thanks also to Liz Smith, francesco Leavia's head
of Bloomberg Podcasts. Thanks for being with us.
Host
Jason Gale
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