Happy Easter, readers! Anyone else see this retro Cadbury commercial running on cable TV last week? After a successful egg hunt, we tucked into our second chocolate bunny of the day (TWTW always eats the ears first)—but before our sugar coma officially set in, we wanted to share our thoughts on a few news items. We’re even starting this week by taking on STAT—so without further ado, here’s The Week That Was…
WE’RE UN-STAT-TISFIED WITH THIS PRICING GUIDANCE
Like the majority of folks who work in the life sciences industry, we love STAT. Ed Silverman of Pharmalot fame has created an intelligent niche that illuminates many uncovered biopharma trends, presented in a thoughtful balanced way. So we were surprised to read Damian Garde’s recent STAT article on drug pricing—which, in our opinion, really misses the mark. Garde argues that a good way of avoiding public relations backlash on drug pricing is to “keep the cost of new medicines to yourself,” citing recent choices by Biogen, Tesaro and Neuroscience who did not disclose their prices at FDA approval. Our email boxes exploded with questions—given that Garde’s suggestion runs counter to our usual pricing guidance.
What Garde’s brief, 400-word article failed to mention is pretty much 90% of the context. While we don’t presume to know all of the business circumstances in play, there are a few reasons why a company might take a calculated media risk in delaying a pricing announcement. Timing of commercialization is one. The FDA has been approving drugs ahead of PDUFA dates this year; if a company’s supply chain and payer contracts aren’t finalized at approval, revealing the price before product is available may put them at a competitive disadvantage. And in the case of Spinraza, Biogen stayed mum until Bloomberg published its three-quarter of a million dollar list price (for the first year of therapy), and initiated speculation on the part of analysts and pundits about whether it would become the “straw that breaks the back of orphan drug prices.” A media maelstrom ensued—not exactly avoiding backlash, as Garde suggests.
Yes, there are a few circumstances in which holding disclosure of your list price may be advisable. But pharmacos that take this approach also face risks. For starters, it allows others (friends and foes) to infer and characterize what your list price will be. This often results in a company chasing down press and investor speculations to correct inaccuracies instead of owning their own price story from the start. All the while, the stock is often under pressure. If you wait for others to contextualize your drug’s value, odds are, it won’t be as clear or accurate, as if you do it yourself. If you believe in your drug’s value, own it—and provide the context to your stakeholders to understand on the runway to approval.
THE ONGOING BATTLE IN THE LESS-THAN-FRIENDLY SKIES
Between “leggings gate” and the “re-accommodation” scandal, United’s PR team has been having a bad spring. United’s stock was down 4% last week after passenger David Dao was forcibly removed from a plane Monday after refusing to give up his seat to a United Airlines crew member. So how did United respond? United issued four statements over four days, including some pretty significant victim-blaming that helped the story go viral. Finally, the beleaguered airline announced that it will no longer allow employees to take the place of civilian passengers who have already boarded overbooked flights. While United kept swinging and missing, Delta rubbed some salt into the competitor’s wounds by proactively announcing that it has revised its own policies, authorizing compensation of up to nearly $10,000 for voluntary denied boarding.
One would think that the U.S. Communicator of the Year, United’s Oscar Munoz, wouldn’t need quite so many tries at saying sorry—and PR Week seems to agree. In fact, with so many failed apologies, it’s hard for the public to accept that any of these messages are genuine. It goes to show that companies must respond immediately and sympathetically to mishaps and missteps (like the Chicago Department of Aviation, which quickly and quietly issued a statement after the incident, largely avoiding implication). In the court of public opinion, vague statements and victim-blaming won’t do—even if the letter of the law is your side.
PhRMA SAYS “R&D OR THE HIGHWAY”
Remember when PhRMA announced that it was reviewing membership criteria in the wake of recent deflazacort pricing pushback? While the organization will formally vote on new requirements in May, PhRMA saw its first member casualty when Mallinckrodt resigned from the group. In contrast to a statement a company spokesperson made about the exit being related to the time and monetary commitment of membership, a “person familiar with the matter” believes the company resigned ahead of being asked to leave pending PhRMA’s expected R&D requirements.
Nearly two years later, the industry continues to feel the effects of Turing Pharmaceuticals’ Daraprim pricing decision, which planted the seed of division between “innovator” vs. “marketer” companies. As the quest to explain the reasons behind the cost of medicines has spread from media to the public, policymakers are demanding information about R&D investments as compared to other product-related expenditures, like marketing and sales initiatives. Vague statements about innovation no longer suffice as evidenced by legislation being watched in California this week. We advise to be as specific as possible about your value story, including patient support plans and opportunities for system savings. While R&D is flagging as a justification for price, companies that don’t have an investment story are finding it very difficult to avoid pricing scrutiny when they are perceived as “buy and hike” bad actors.
MAKING FRIENDS: GOOD AND GOOD FOR YOU
America’s opioid epidemic has been front and center in the news for some time now; giving rise to a whole host of legislation, litigation, and campaigns aimed at addressing the public health crisis. The latest effort in the battle shifts the focus from health care providers and drug manufacturers to the education system. This week, Adapt Pharma announced that it is partnering with the Clinton Health Matters Initiative to donate 40,000 doses of its nasal spray for the emergency treatment of opioid overdose to college campuses across the country. The program expands upon an initiative the company launched in 2016 to offer free nasal spray to high schools in the U.S. and to support the educational efforts of the National Association of School Nurses.
No matter the “issue” facing a company—be it a public health crisis, price, access, product defects, or some combination of these challenges—having a history of goodwill toward the patient community can only help your cause. That goes double when “doing the right thing” helps develop relationships with a range of stakeholders. Good press is always a positive (and leaves a digital footprint that helps counter the negative), but in times of crisis, an established, broader network can also help you quickly hear concerns from and share your perspective with key communities. While stakeholders can be your greatest validators and spokespeople, they will only show up and speak out when the relationship is genuine—and being proactive is key. Companies that wait until the throes of a crisis to reach out will find themselves shut out.
As always, thanks for reading. We’ll be back next Sunday to share our views on the most interesting (and infamous) stories of the week—but in anticipation of tomorrow’s celebration at the White House, we’ll leave you with these 15 little-known facts about the White House Easter Egg Roll.
Until next week,
– The Issues Management Practice @inVentiv Health PR