Gil Bashe Kristie Kuhl
Gil Bashe & Kristie Kuhl authored this piece.
Today, headlines on how patients can be treated for deadly diseases such as hepatitis C and genetic high cholesterol often feature “how much” before “how innovative.” PR and IR colleagues wince at the Mylan EpiPen pricing misstep and subsequent disclosures. Yet, the pricing “outlier” is not a new phenomenon. KV Pharmaceuticals was heralded in 2011 when it introduced a Food and Drug Administration-approved version of an off-label $15 a treatment for the prevention of premature birth in women. The applause stopped when KV priced its newly approved product at $1,500 per injection. Initial supporters, including the March of Dimes, crossed the isle to become strong opponents, and KV Pharmaceuticals ended up filing for bankruptcy.

O'Dwyer's October '16 Healthcare & Medical PR MagazineThis article is featured in O'Dwyer's Oct. '16 Healthcare & Medical PR Magazine

Turing Pharmaceuticals and Valeant are not newbies to pricing quicksand danger. A sole focus on shareholders — important investors supporting biomedical advances — are among the health eco-system stakeholders. To succeed, biopharma companies must recognize that their decisions impact other healthcare business models, and that by securing patient access to these therapies with payer support, their shareholders ultimately benefit.

The Kaiser Health Tracking Poll finds most Americans feel drug companies play a vital role in society (62 percent) and a sizable minority have positive feelings for biopharma innovators (42 percent). At the same time, consumers note that drug costs are unreasonable (72 percent) and that drug companies put profits before people (74 percent). In their desire to gain easier access to innovation, 83 percent of patients suggest that the Federal government should be given leeway to negotiate with drug companies to improve Medicare prices. Of course, those opinions open the door to others advocating for government involvement to keep drug costs down.

This year, the Fortune “10 Most Admired Companies in the World 2016” did not include a pharma company. The pain of being so disenfranchised has led to biopharmaceutical CEOs to question historic approaches to communicating price. Allergan CEO Brent Saunders, recognized for bold approaches to advancing drug innovation, has stepped forward with a social contract on pricing parameters that outlines this company’s commitment to responsible steps on increases and collaboration with other parts of the diverse health system. A pioneering first for the pharma industry, it signals why PR executives must now understand how price and reputation are connected.

Marketing is charged with generating return on investment for the millions and even billions invested to develop a new pharmaceutical product. Medical is held accountable for the science that reaffirms patient value. PR must be included during the decision-making around cost to protect that precious investment in resources and talent. Product cost to the patient and payer is part of the news cycle. Once passive about new pharma product pricing, the health ecosystem is pushing back when product cost is perceived as too high.

There’s a good reason why economics and pricing are central to the drug access and innovation conversation. The fragmented U.S. healthcare system forces consumers to navigate medical care on their own, putting convenience and cost into the forefront of their decision-making. Consumers who change health insurance plans frequently switch their primary care physicians just as often, requiring them to be the owners of their medical history and regimen. Consumers now cite convenience and cost as the two priority considerations in making medical decisions. When companies make access hard, consumers go with an alternative.

PR pros must ask: “Why are so many people critical of biopharma companies?” Especially if the industry’s intent is to extend and save lives? Consumers expect pharma to come up with life-saving answers. They hold the industry to a higher standard than other Fortune 500 sectors. Ultimately, the pharma industry has the potential to rally investment, talent and imaginative persistence to tackle disease.

People with deadly illnesses hope research laboratories and physicians — neither of which set drug prices — will extend their lives quickly and in comfort. They expect payers to find a way to make medical innovation accessible. They look to policymakers to encourage drug development and affordability. At the heart of the reputation debate, patients are quick to put aside judgment. They want a cure!

Stop hiding behind the cost of developing new molecular entities. For years, the pharmaceutical industry has explained that the price of drugs is related directly to the costs involved in their development. The consumer response is “Your business model is broken. Fix it.” The time-worn response of development cost without guarantee of market success no longer wins’ friends.

Leaders listen to their customers. CEOs must leave their offices and understand the concerns of their patient customers. Patient advocacy consists not only of investment in therapeutic franchises, it provides insights that guide thought out C-suite decisions.

One price may not fit all. Bold companies will be proactive with pricing approaches to secure public buy-in as part of its drug introduction strategies. Alexion, the developers of a life-saving drug for an ultra-rare disease took that approach in introducing Soliris and ensured access for all patients regardless of ability to pay. Payers, providers, policymakers and patients understood this company’s decision-making process and rewarded innovation with support.

Be bold and do well. When Allergan CEO Brent Saunders stepped forward with a social contact on pricing, he changed the landscape for the pharmaceutical industry. Who will be the next pharmaceutical executive to take that bold step and transform people’s lives and a company’s reputation? PR pros can serve and that ambassador for the “outside-in” voice of the customer when pricing decisions are about to be announced.

For biopharma companies, large or small, to secure patient respect, stay close to the health ecosystem and understand that economics is now part of the news cycle. Innovation is still the patients’ and physicians’ hope. However, access to care remains the path to success.

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Kristie Kuhl, JD, is Senior Partner at Finn Partners. Gil Bashe is Managing Partner and Global Health Practice head at Finn Partners.