Amy Rick (President & CEO, FDLI) Talks to Stephen J. Ubl (CEO, PhRMA)

September 22, 2016

This is an excerpt from a longer interview; see below to hear the full audio.

Amy Comstock Rick: We are very lucky today to have with us Steve Ubl, the CEO of PhRMA. Prior to being the CEO of PhRMA, Steve for many years was the CEO of AdvaMed and before that he was at the Federation of American Hospitals and I understand began his career on Capitol Hill.

For those who don’t know, and especially for those who are not in DC, can you just give us a quick rundown about PhRMA?

Stephen Ubl: Sure, PhRMA stands for the Pharmaceutical Research and Manufacturers of America and we represent the country’s leading innovative biopharmaceuticals research companies. Our members are devoted to discovering and developing medicines that enable patients to live longer, healthier, and more productive lives. We represent most of the major players in the industry.

ACR: This is your first year as the CEO at PhRMA. How’s it going?

SU: I am ten months in and it’s a very exciting time. I’ve spent just about every week since I took the position going out to visit the leaders of the companies as well as the heads of research and development and patients who have benefited from our companies’ innovations, and I have to say it is just an incredibly exciting time in terms of our understanding of human biology, harnessing the human immune system to treat cancer, and understanding disease at a molecular level.

But it’s a bit like A Tale of Two Cities in the sense that we also have a challenging policy environment where I don’t believe policy makers truly appreciate the ecosystem that is necessary to produce the next wave of medical progress. We have issues that we need to address with policy makers to ensure the ecosystem remains as vibrant and world-leading as it is today.

One of the things that I bring from my AdvaMed days is just a keen appreciation for how fragile the ecosystem is. Over the course of my ten years as CEO at AdvaMed we used to host a lunch at JPMorgan every year with venture investors investing in start-up medical device companies. My first year we had a room of 25 to 30 people and in my last year we had to cancel the lunch because there were so few VC’s investing in true start-up companies and you know we’re going to pay the price for that as a society in the coming years.

ACR: Building on what you said about A Tale of Two Cities one could take that to mean we are in the best of times scientifically but the worst of times in terms of regulatory hurdles—I’m sure it’s not that simple and straightforward but what are some of the proposals that PhRMA is working on to address those regulatory hurdles?

SU: Well one of the things I’ve been trying to bring to PhRMA is a solutions-oriented approach. I look at these issues in a right way / wrong way context and some of the policies that concern us really focus on approaches—government price-setting, re-importation, things that we think would have a negative impact on innovation—and we’ve been trying to [take the] lead on talking to policymakers about pragmatic consumer-oriented policies and enhance the private market. So things in the FDA area, for example, that would modernize the clinical trial process, better harness and leverage real world evidence, validating more clinical biomarkers, these are things that would reduce the cost of development, bring your product from the bench to bedside, which still takes too long and costs too much, and will also enhance competition and address some of the issues that are being discussed relative to cost.

ACR: You mentioned drug pricing, which has certainly been in the news in the last 12 months, and you just mentioned it as if it’s not an “if” we will get government regulation of pricing but when. What do we do about the drug pricing issue?

SU: Our companies are increasingly interested in negotiating outcomes-based arrangements with payers but there is a lot of law and regulation that stands in the way of allowing our members to do that on a broad basis. For example, our companies are precluded from engaging payers before a product is approved, or from discussing a product that they know would reduce hospital readmissions and it’s related to something that’s on the label but it’s a sub-population.

ACR: This is an issue of great interest to FDLI members: We refer to it as the “off-label communication” issue but it is actually obviously much broader than that as you indicated with sub-populations and such. What is PhRMA’s engagement on this very specific issue and do you actually have proposals out there on where you would draw the line between what a lot of people consider should be encouraged—more communication between industry and payers or in scientific exchange to promote research—to the other extreme of direct-to-consumer marketing for unapproved uses (which obviously makes a lot of people uncomfortable)? Do you have proposals of where you might draw that line?

SU: Yes we do and we’ve given a great deal of thought to the issues that you just raised. Clearly the label is the most trusted source of information but there are other forms of science-based information that we think can help physicians, patients, and insurers better understand the full value of a medicine and as we better harness real world evidence and other sources of information I think it’s important for FDA to modernize its regulation to ensure appropriate science-based data can be used to better inform physicians prescribing for patients.

So we’ve outlined principles in this area; we’ve been joined by BIO in this effort. I just would briefly enumerate those key principles:

The first is really a commitment to science-based communication. We have to acknowledge that there are many types of information and analysis that are scientifically and statistically sound and that we think could help improve patient care and we think we should increase access to those types of information.

But we should remain mindful and provide appropriate context around these types of information and data, so we believe communication should clearly disclose appropriate contextual information about the data that’s presented, including limitations of statistical methods and study design, to ensure that healthcare professionals and payers are clearly informed about these emerging forms of data and effectiveness in the value of medicines.
And then, finally, a commitment to tailoring the communication to the intended audience. I think we have to keep in mind the sophistication of the intended audience to ensure the information is clearly communicated and incorporated into existing knowledge and expertise.

ACR: Certainly another area of significant change has been patient engagement as a result of some of the aspects of PDUFA V and legislation. FDA has really shifted how it engages the patient community and the patient voice in some of its work, although patient organizations say that they have a long way to go. How does the patient engagement movement change how your members actually engage patients?

SU: I think the North Star for our member companies has always been the patient and at PhRMA we keep the patient at the center of our advocacy. I believe that the effort to better operationalize patient input in all aspects, whether it’s regulatory decisions or reimbursement decisions, is an enormously positive trend.

As many people know, my own son was diagnosed with type 1 diabetes about a year-and-a-half ago and it’s given me a new appreciation for what it’s like to live with a chronic condition or to live with somebody with a chronic condition. I can just tell you that the things that are important to him don’t necessarily correspond to commonly accepted quality standards or measures around his condition. I was recently on a panel with Marc Boutin, who leads the National Health Council, and I think is doing a tremendous job, and Marc made the point that in the course of FDA reaching out to patients […] they learned an awful lot and in many cases were not fully appreciative of the things that really matter to a patient by disease area. So we think it’s absolutely essential to make sure the patient views are at the center of regulatory reimbursement decisions.

ACR: When you say that it brings to mind the old saying “not everything that counts can be counted.” This will be an interesting challenge, as you indicated, for FDA to take into account more what matters to your son even if there isn’t an easy biomarker for it or an easy way to measure it. As a former patient advocate I think the advent of focusing on what matters to patients is very exciting but in other ways it could complicate how we determine what efficacy means.

SU: You’re absolutely right but I think we’re going to have a much richer discussion in both the regulatory and reimbursement areas by opening the aperture on what is valuable to patients.

With regard to my son and type 1 diabetes, A1C levels are a commonly accepted quality measure and it is an end point involved in regulatory decision-making. But I can just tell you this—that’s only one piece of the puzzle, whether it’s time and range, avoiding hypoglycemic events, or other things that impact his day-to-day life, those things over time are going to open the aperture and lead to more medical discovery and better real-time feedback in terms of patient input.

ACR: I want to close with a question about your experiences at AdvaMed and what you brought to PhRMA. As you just indicated about your son, every time each of us in life has a significant experience I think it gives us a different perspective on our work and our family and all aspects of our lives. Certainly every time I’ve changed jobs I have a new perspective—“I kinda wish I could have known that in my old job”—you see things a little bit differently. Switching from AdvaMed to PhRMA, what has surprised you about changing fields from device to pharmaceutical, what did you learn that you didn’t know you were going to learn?

SU: That’s a great question. There are key similarities and differences. The most obvious difference is that the innovation models are really quite different so in the device space you have this rapid incremental improvement—short life cycles of the product that are 18 to 24 months long. It’s almost more like the software industry, than it is the pharmaceutical industry. On the pharmacy side you have much longer development cycles and it’s almost like the Big Bang theory. You’re testing a number of compounds, you find one that works and it doesn’t fundamentally change for the most part over the course of its patent life.
The innovation models are quite different but with regard to similarities—the ecosystem, again we have this world-leading ecosystem where we have access to capital, the world’s leading academic centers, tech transfer, the ability for government to collaborate with the private sector stakeholders in the pursuit of better treatments and cures—that ecosystem feeds both industries and there’s a lot of commonality in the challenges that are faced there.

The challenges we are facing in the device side I think are foreshadowing of potential challenges on the pharmacy side and they are concerning to me. The reason that venture investment moved away from the medical device space was really around FDA regulatory uncertainty and question marks around whether new technology would be recognized by payers. We see some of those same discussions occurring on the pharmaceutical side where we’re going to see we have 7,000 new medicines in the pipeline, 70% of which have the potential to be first-in-class medicine.

We have this incredible engine of both public health and economic growth and at the same time we’re all wrestling with how we ensure access and affordability. […] I’ve also been able to look at the convergence of various fields and I have enjoyed spending time in the diagnostic industry and seeing now how pharmaceutical companies are leveraging diagnostics to stratify risk and target the right drug to the right patient at the right time. And with data aggregation, we spend a lot of time with companies on the AdvaMed side that are involved in electronic health records and tools outside of electronic health care records to better leverage patient-specific information. So it’s given me a unique perspective on the life sciences sector as a whole.