Learning to Love Big Pharma

That's the message from World Health Organization head tadrus Adnam Gabrie at a briefing in Geneva today, just about six months after the w h O became aware of the virus. He said some countries are having a resurgence of the outbreak. The America's account for half of all deaths, and there is no global solidarity around the disease. Tad said, quote this virus can be suppressed and contained using the tools at hand end quote, and countries shouldn't wait for a

vaccine to deal with it. He also said, quote if any country is saying that contact tracing is difficult, it is a lame excuse end quote. Worldwide deaths from the virus surpassed five hundred thousand, and confirmed cases exceeded ten million. In New York, officials are reconsidering a plan to allow indoor dining beginning July six. Other states have blamed reopening restaurants and bars for surge in COVID nineteen cases. Mayor build a Blasio said the city and state will make

a decision within the next few days. As how officials are increasingly concerned. One statistic is growing at an alarming pace in some US hotspots, the rate of positive cases. In Florida, thirteen point seven percent of people tested for the virus came up positive on Monday, a jump of over one percentage point from the previous day, and Texas COVID nineteen positive test rate searched to more than fourteen percent,

the highest yet for the state. And now for our main story, Gilead Sciences announced today that it will charge the US government and other developed countries three hundred and ninety dollars per vile for its coronavirus fighting drug Remdessevere. That begins to answer a big question as drug company's race to find treatments and develop vaccines for the virus. How much will it cost us? But drug companies in the wake of the pandemic hope people will stop paying

so much attention to the cost of medicine. Riley, Griffin and m a Court report that the pharmaceutical industry is hoping COVID nineteen will give it a chance to rebrand from price gougers to life savers. The drug industry is disliked more than any other sector, including lawyers, the gas industry, and the federal government, according to a Gallop poll that boils down to one reason, drug pricing, which is increasingly

prompted outrage from politicians and patients. The US pays the most for prescription medications of any country in the world, in part because the government doesn't negotiate drug prices like many others and the country's healthcare system is more fragmented. But the pharmaceutical industry hopes that the COVID and King crisis will turn around it's bad reputation. Here's Spencer Perlman, director of healthcare research at the consultancy of Beta Partners,

who has long been covering the drug price debate. A lot of Americans are now changing their mind, at least for right now, about how they view the pharmaceutical industry. I mean, the pharmaceutical industry was about as popular as mass murders a few months ago, and they are you know, their their popularity, if you will, has increased pretty substantially. UM And I think a lot of that has to do with the fact that, again, these are massive companies

that when they want to can develop miracles. May just it's a fact that cutting edge science is what the pharmaceutical industry would prefer to talk about. Case in point Michelle McMurray Heath. She's the new leader of the Biotechnology in Ovation Organization, a powerful trade group in Washington, d C. Michelle's background is in science and regulation rather than lobbying, and she was initially reluctant to take the job. As an m d, pH D, former U S regulator and

most recently VP at Johnson and Johnson. She's the perfect representative of the new image Farmer wants to convey advocates for good medicine rather than wielders of political power. I'm not a typical lobbyist. If that's what you're looking for for this role, I think you have the wrong girl. You know what I am is a person who understands and believes in the power of science, and I'm a

committed and um engaged advocate for science. That's what I bring to the role, and they looked to me and said, well, actually, our entire search is about changing the national dialogue. Michelle says she was convinced and saw the job as an opportunity to advocate for cutting edge science that would fundamentally change the lives of patients. Proposals aimed at reforming drug

pricing could endanger that innovative medicine. She says. The industry has long made this argument, but it takes on a particular resonance with the whole world betting that pharmaceutical companies can get us out of this public health disaster. It's been clear that in recent years there's been a lot of public misunderstanding about what biotechnology has been attempting to do for for the country, for human health, for the

food supply, for the environment. UM we are not among the most trusted quarters of the culture, and if we don't have a strong and vibrant biotechnology UM ecosystem, we are not going to be prepared to combat this crisis, or any of the crisis we are likely to face in the coming years and decades. It is the critical lover to move us forward, and I think that's becoming

clearer now than it has ever been. Now Michelle, the Biotechnology Innovation Organization and its member companies are making this pitch to the American public. Earlier this month, the organization drew thousands to a digital conference that featured headliners like Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, on a panel about how to win the

war on COVID through such drug development efforts. Meanwhile, Johnson and Johnson has been streaming an eight part series on its own road to a vaccine. The industry's largest trade organization, the Pharmaceutical Research and Manufacturers of America, has even taken out e v ads with a heavy handed tagline, science is how we get back to normal. The pharmaceutical industries villainous reputation wasn't built in a day. Criticism about high

US drug prices has mounted for decades. In recent years, a series of crises paired with broader changes in US healthcare, like greater exposure to high deductible health plans, kicked it into high gear. Generic drugmaker Mylens years of price hikes on allergic reaction treatment EpiPen exploded into an affordability crisis as parents stocked up on them during back to school season.

More recently, individuals with diabetes have struggled to afford life saving insulin, even though the drug has been around for nearly a hundred years. The drug industry argues that what's happening isn't their fault. Instead, they point a finger at health and sures and other players in the supply chain, like pharmacy middlemen. But advocate Margarita George, campaign director for the Coalition Lower Drug Prices Now, says there are clear lessons to take away from all this history. This is

an industry that we couldn't trust on insulin. We couldn't trust them on EpiPens. We couldn't trust them on prep true VADA or HIV medicines. We can't trust them on HEPC. Why on earth would we think that we could trust the prescription drug industry to create a vaccine that then they would price at a fair rate that everybody could get access to. The U S government has also poured billions of dollars into pharmaceutical companies for the development and

manufacturing of new treatments and vaccines. That makes for even thorn in your questions about how much COVID nineteen products should cost, because it's not just company taking on the financial risk of making new drugs, it's taxpayers too. The first test came this week with Gillads Roum Desiviere. The company came out with two price tags. It will charge the US government and other developed countries about three nine

dollars of vile. Private US health insurers and other commercial payers, though, will pay a higher price five dollars of vile. Guilliad says most patients will need only five days of treatment, putting the total price roughly in line with a cost effectiveness threshold for the drug set by an independent nonprofit called the Institute for Clinical and Economic Review that the cost for commercial payers on a five day course will

run somewhat over. In a statement on Monday, Steve Pearson, Iser's founder and president, said Gillad's price tag was quote reasonably cost effective and end quote demonstrates restraint and a promising precedent for future drug pricing during a pandemic end quote. But he also said the conversation about ram Dezevier's price wasn't over and should be reassessed as we learn about

how well the medicine works. The drug pricing debate continues on in Washington, d C. Though many see today's public health crisis stymying a bipartisan package geared at penalizing drug makers for price hikes. Senate Finance Committee Chairman Chuck Grassley, a co sponsor of the bill, told us it's not off the table, at least not yet. The Iowa Republican is pushing for the policies to make it into the next package of coronavirus relief. That was Riley Griffin and

Emma Court. Their story on Big Farmers Big Rebranding can be read in the June issue of Bloomberg Business Week or on Bloomberg dot com. And that's it for our show. A reminder, starting this week, the Prognosis Update will be coming to you on Monday's, Wednesdays and Friday's, so there

will be no show tomorrow. For coverage of the outbreak from one and twenty bureaus around the world, visit Bloomberg dot com Flash Coronavirus and if you like the show, please leave us a review and a rating on Apple Podcasts or Spotify. It's the best way to help more listeners find our global reporting. The Prognosis Daily edition is produced by Tophor foreheads Jordan Gaspore, Magnus Hendrickson, and me Laura Carlson. Today's main story was reported by Riley Griffin

and Emma Court. Original music by Leo Sigrin. Our editors are Rick Shine and Francesca Levi. Francesco Levi is Bloomberg's head of podcasts. Thanks for listening.