Do you remember a few years ago when Martin Shkreli argued he had a “fiduciary duty” to his shareholders to hike the price of Daraprim by 5,000%? Well it turns out that not all investors share the Pharma Bro’s notion of profits-over-everything.
I regularly hear from biopharma investors and financial analysts who are concerned about the industry’s exposure — reputational and financial — to backlash over US drug prices that appear to be entirely untethered to value. This week, Morningstar’s report on socially conscious investment strategies praised AstraZeneca for making “smart strategic decisions on drug pricing” by choosing to price multiple products within ICER’s recommended range for cost-effectiveness.
The media often try to pit ICER against the pharmaceutical industry — cobra vs mongoose. But frankly, this portrayal is short-sighted and incomplete. Increasingly, the more forward-thinking biopharma companies are rolling up their sleeves to engage fully in ICER’s assessments. They’re aware that a favorable ICER report provides 1) a reputational boost for their company among legislators and the general public, 2) improved leverage when negotiating with payers, and 3) a progressive pitch to investors who are looking to put their money behind socially responsible companies.
I hope we all soon forget the antics of Martin Shkreli. But I pray we never lose sight of the wisdom of George W. Merck:
“We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.”