Thank you very much Mark.
Thank you for the invitation from Medicines Australia and I'd also like to thank Ministers, Senators, Members of Parliament, all of the leadership of the Australian Public Service who are here, the professionals who have the challenging job of delivering medicines to Australians, and all of the members of the Industry who have taken the time to join us in Canberra for this evening. I particularly want to acknowledge the Minister for Health, Tanya Plibersek and the Shadow Minister for Health, Peter Dutton. Thank you very much indeed.
It's a real pleasure to be here. So, despite my accent, I can say that it feels a little like 'coming home' to be back in Australia, and specifically in Canberra tonight. I spent three wonderful years with Pfizer in Australia until 2007, during which time I served as Chair of Medicines Australia. In that period we spent a lot of time working with government and policy makers on reform of the PBS – and it's a pleasure to see so many familiar faces in the room tonight sharing an abiding interest in the healthcare eco-system in Australia.
I'm struck by the diverse nature of this audience tonight and it is heartening to see industry leaders sitting alongside patient organisations, officials from the Department of Health and Ageing and other policy makers and stakeholders.
This provides a powerful example of what is so 'right' about the health sector here in Australia. Working together as Government, industry and the health sector – and adopting a solutions-oriented approach to key policy issues – has enabled you to create a balance of sustainability, affordability, predictability and patient access of which Australians should be very proud.
One of the great things about working in the healthcare eco-system is that there's always a lot we could talk about. I would like to focus my remarks tonight on two key challenges which I believe are critical to every one of us here, and also to every Australian: the funding challenge, and the innovation challenge. Getting the balance right on these two issues is essential to the broader health agenda in Australia.
Let me start with funding.
I doubt there is a person in this room who doesn't appreciate the need to prioritise and ensure value for money when it comes to spending. That applies equally to business and government, health consumer organisations and individual households and consumers.
That need for balance and prioritisation is one that is keenly felt at Pfizer right now. The expiry of the Lipitor patent last year, and the loss of revenue from other patent expiries around the world – coupled with global economic challenges – has led to some pretty difficult decisions for us. No one should forget that structural changes in an organisation don't come without a real human cost as we at Pfizer, like every household, align our investments with the reality of our income.
And I'd like to take a moment to recognise the Pfizer team here in Australia for the very professional way in which they have handled these tough challenges.
It is a reminder that significant changes – whether due to patent expirations or the unanticipated impact of a policy change which impacts business – do have real consequences on business and our ability to invest for the future.
We recognise that Governments around the world have tough fiscal choices to make, and we are seeing that especially in Europe today. The measures being taken impact many areas of public expenditure, but are no less severe on areas that are our focus this evening – including patient access to life prolonging medicines – and the ability of governments to ensure patients have timely and affordable access to them. This is ever more acute given the additional challenges of an aging population.
Thankfully, the Australian economy has weathered the economic storm so much better than many other countries. No doubt many factors have played a role in that – including the strong economic management you've implemented here over many years.
I also genuinely believe that one of the reasons governments here have avoided some of the acute funding challenges in healthcare we've seen in other countries, especially Europe, is in part because of the policy reforms Australian governments have put in place over time and in which we hope our industry has played a constructive part, and in which Medicines Australia has been central.
We know that strong economic management for government also requires choices. As an industry we clearly recognise that here in Australia the Government is grappling with rising health care costs and declining tax revenue, despite your economic strength. We also recognise the rightful drive to achieve greater efficiencies and effectiveness for every dollar you spend.
This pressure to find efficiencies in the medicine bill certainly requires us in turn to become more efficient, to reduce our costs and to adjust our business models to place an even greater focus on innovative research which delivers improved health outcomes for patients. And I am sure that every research-based company represented here tonight is doing that.
But as I mentioned earlier, there is a clear conundrum we need to address. As an industry, we are seeking to be constructive in our dialogue with governments and payers in addressing the near term financial challenges all countries face. But the discovery and development of medicines is a long run play – very long run. And we need to have a care not to be so preoccupied with the present fiscal challenge that we risk the future bio-science research and innovation of tomorrow.
We also need to understand patient expectations regarding health. And on that point, it's great to see representatives from so many patient organisations with us tonight. We have a strong history of collaboration – between industry and your organisations – the voice of the patient contributes critical insights into the health policy debate, and the kinds of issues we are considering tonight.
As we all know, patient expectations are rightly high when it comes to health. Patients want, and expect, access to the new medicines, new technologies and new procedures which enable us to live longer, and to stay healthier. So while governments are feeling cost constraints, and looking to the healthcare system for a solution, patients are expecting more, better – and often more costly – health solutions, to give them better or longer lives.
So governments need to be able to fund medicines that will help patients today, and our industry needs to be able to invest in innovation that will help patients tomorrow. It can't be a contest between us.
As payers, governments need confidence in the medicines we produce: Are they are safe? Are they effective? And of course – how much will they cost? As industry, we need confidence that the medicines we discover and develop will garner a fair return. That we can rely on the stability of pricing agreements over agreed timeframes. That the ground rules will not change arbitrarily.
During my time in Australia in the mid 2000s, I was part of the industry team that worked with government to support reform of the PBS, and I am very proud to have been part of that effort.
There has been some discussion this week about whether the PBS is getting value for money when it comes to off-patent, generic medicines. It is an important question.
I think the Minister said this week there had already been a $1.2 billion price cut for generic medicines, with a further billion dollars in savings in the pipeline, and another 60 medicines to take a price cut from the first of April 2013. Some 1400 brands of more than 100 medicines have already taken price cuts, leading to lower prices for patients.
Let us be very clear.
As an innovative industry we unambiguously support greater competition and efficiency in the off patent sector. Our lifeblood is innovation and our ability to get that innovation to the patients who need it at fair prices and without undue delay.
We need a health care system that is efficient in order to make sure that innovative medicines that deliver better health outcomes get to the patients who need them. And that absolutely means having the most efficient generics market possible.
I know that many people, including many here tonight, are already thinking about a new agreement between government and industry from July next year. But at the same time, we are seeing an increasing number of ad hoc and cost driven reviews into various medicines and therapeutic areas.
It's my sincere hope that these diversions do not undermine the ability of the government and industry to continue to deliver innovative medicines to Australians. I'm not arguing for no change – far from it. Where we can do better, we must. But I'm hoping that a focus on short term fiscal challenges, critical as they are, do not have the consequence of removing the reward and incentive to conduct innovative research in areas of real unmet clinical need, both here, and around the world.
This brings me to the second challenge I'd like to consider tonight – Innovation.
And again let me give you our experience to set the context – and this is shared across our industry. At Pfizer, innovation is at the heart of everything we do – it's who we are. We focus our research and development efforts in areas where we believe we have the strongest potential to help people ? Alzheimer's and pain; cardiovascular and metabolic diseases; Cancer; inflammation and immunology; and vaccines. Historically, we've spent more than US $7 billion a year in R&D. Now in 2013, with one of the strongest pipelines in our history, we continue to prioritize and focus our R&D resources to drive the next wave of innovative medicines to truly make a difference in patients' lives.
That said, it is well documented that the last few years have seen a decline in research productivity in our industry as the number of new medicines being approved globally has fallen over the course of a decade. But standing here tonight, I am reminded of Mark Twain's famous quote "The reports of my death are greatly exaggerated".
For example, industry wide we have 49 new medicines listed on the PBS in the last three years; and in the US, there were more approvals by the FDA last year than in the last 16 years – 39 new medicines in 2012 alone.
In short, our industry continues to be part of a global trend of targeted innovation, providing governments, healthcare professionals, and patients with solutions to real unmet healthcare needs.
But innovation is not just about discovering a new molecule. The discovery process ends one very challenging task but is the start of many more. We need to be able to engineer the formulations; test them for safety and efficacy; and manufacture them to quality and scale, while we conduct the large-scale studies which regulators and payers demand.
And we're moving to a world increasingly dominated by complex molecules and vaccines which are much more difficult to manufacture than the small molecules we've relied on in the past. This is not a small challenge.
So innovation is not an abstract construct. But it does take a kind of alchemy. It takes very talented people with insight and curiosity and relentless commitment. And these talented people need funding and resources. In the past, society has sufficiently valued our work so that we could continue to innovate. But we live in a different environment. Governments are responding to the needs of patients and changing demographics by increasingly demanding greater value and more sophisticated and targeted innovation from us, while simultaneously trying to manage health care costs.
I am concerned that we may inadvertently lower our sights and focus on resolving the cost problem more than the need to find new treatments where they are needed. I think that will be a disservice to the patients who need us today and in the future.
Let me step away from policy for a moment and get back to what we might call the important stuff – helping people stay well and get well. Australia's National Health Priority Areas are a good place to start, because they show us where the burden of illness falls most heavily on the Australian community. Cancer control, cardiovascular health and dementia are all National Health Priority Areas.
So how are we doing?
The innovations we've seen in medicine over the last 25 years have benefited Australia's cardiovascular health enormously.
The cardio-vascular death rate fell 78% in the four decades to 2009. Yet cardiovascular disease remains the leading cause of death in Australia, resulting in one Australian death every 12 minutes.
What about cancer? We have also made inroads here. The survival rate for many common cancers has increased 30 per cent in the past two decades – and today, more than 60% of people diagnosed with cancer in Australia will survive more than five years after diagnosis. However, cancer is still the second-most common cause of death in Australia – and an estimated 125,000 new cases of cancer will be diagnosed in Australia this year.
Progress in the area of dementia is less obvious. And further inroads won't be made without innovation. There are 321,000 Australians living with dementia today, and another 1.2 million people providing support and care for them. The number of people with dementia is projected to triple to around 900,000 by 2050.
These numbers speak of the very real human impact of illness – but they also underscore the critical role that innovative medicines can play in helping individual patients.
But in a room of policy makers, industry leaders and budget holders it is appropriate that we also consider the economic and fiscal impact of illness.
Recent studies were conducted by a team led by Dr Deborah Schofield, from the NHMRC Clinical Trials Centre and School of Public Health at the University of Sydney. Dr Schofield also worked in the Federal Treasury, including as Director, health policy and retirement and income policy, specifically contributing to the analysis that underpinned the Intergenerational Report.
To give us some context – a study drawing on 2009 data found an estimated 415,000 Australians aged between 45 and 64 were unable to work because of ill health. This resulted in a national annual loss of income of about $17 billion. The total lost tax revenue to government was $2.1 billion, and the impact on social security payments was increased spending of $1.5 billion.
A related study, using 2003 data from the Australian Bureau of Statistics, also looked into the economic impact of older Australians not working because of ill health. It estimated a $14.7 billion decline in Australia's annual gross domestic product, and concluded that the prevention of long term health conditions may help older Australians remain in the labour force longer, thereby increasing revenue to fund healthcare for the ageing population.
The reason I raise this is it's tempting to always look at health funding as a cost. We need to also look at it as an investment – not just as an investment in the health of individuals, but also as an investment in the broader economy and as a real enabler of enhanced workforce participation.
Is there a fail-safe formula for preventing dementia? Curing cancer? Conquering cardiovascular disease? Sadly not. But I'd like to suggest there are some essential elements that might help us get there.
Firstly, we need a predictable and impartial environment to provide a stable climate for investment.
We support collaborative approaches where industry and government can agree on a path to achieve both short-term and long-term goals, while avoiding volatile changes in the policy landscape. Decisions on pricing, reimbursement and access of medicines must be transparent and subject to appropriate safeguards, such as the right of appeal.
Secondly, we need a holistic view of value in health care, and to avoid silo budgeting.
Health is a key determinant of future economic prosperity, and prevention programs that reduce chronic illness need to be a priority. But in addition, incentives for the uptake of cost-effective new medicines that deliver societal benefits should be built into the health system.
Thirdly, we need pricing and procurement systems that incentivise and reward innovation, and value quality.
A healthy innovative market includes multiple treatment options, including medicines, that address areas of high unmet clinical need. Pricing and reimbursement systems for new medicines should grant a price for medical advances to encourage new entrants in line with their value. Procurement systems should value quality and security of supply, as well as cost. Similarly, pricing and reimbursement arrangements for post patent medicines need to be consistent and reliable, while also delivering value for money.
These needs cannot be beyond us.
I want to go back to where I started to some degree, and end on a positive note, because I believe the environment here in Australia can remain positive – notwithstanding the funding and innovation challenges confronting us.
Successive Australian governments, those involved in medical research, those involved in day to day healthcare, and indeed our own industry, have worked together well to provide Australians with an enviable healthcare system.
In Australia we see a system that can deliver sustainable spending for Government, predictable policy for industry and access to emerging new therapies for the Australian community. It is something to be proud of. It has helped avoid some of the worst examples of failures in medicines policy that we've seen in other countries – be it patients being unable to get their prescriptions filled, companies not being paid, hospitals running short of essential medicines, or governments not being able to perform one of their basic functions – providing a strong healthcare environment for their community.
My sincere hope is that we continue to navigate our sometimes competing priorities to maintain that outstanding legacy. Let's get the balance right on funding and the cost of medicines. Let's get the balance right on supporting innovation.
Pfizer is very proud to be part of the Australian Medicines Industry and to work alongside other companies in contributing to the ongoing success of the PBS.
It is a truly remarkable scheme and one we should all ensure, endures.
Good afternoon and thank you. I'd like to begin by talking about courage and specifically women and courage. When I first learned that I was going to receive the Brent Award, courage seemed like an obvious first thought. Why? Because it was scary to think of adding my voice in a meaningful way to the roster of women with whom I am privileged to share this award: my close cousin, Judith Resnik; my dear friend Sheila Birnbaum who taught my mother who was herself a law school graduate at the age of 45; Elizabeth Cabraser, a terrific adversary of mine from my days in private practice; Judith Vladeck, who started the firm where my mother first practiced; and Justice Ruth Bader Ginsburg, who shared a Clerkship with my father in the Southern District of New York, to name a few. So courage in the sense of believing I could join the Brent conversation in a meaningful way. Courage because so many of my predecessors had the courage of trailblazers. Joining me here today, include: Joan Hall, the first litigation partner at Jenner & Block, Tani G. Cantil-Sakauye, the first Pacific-American Judge in California, and others. And preceding them, of course, is Margaret Brent herself — the first woman acting as a lawyer in these United States.
Being the first is definitely a courageous and often a lonely act. But as one of my sons observed, that sort of courage doesn't really apply to me, a general counsel at a Fortune 500 company. Of course, courage is very contextual. To another of my children, this time my 12 year old, courage is not freaking out if you find a spider on your face. General Counsel and Business Lead at Pfizer is not exactly an 18-year-old's definition of courage. So as I was sitting there feeling humbled, and since courage is often about conquering fear, I thought of the first fear I remember conquering. And I'd like to begin with that story. Mind you, it's a story about courage with a small "c" — a very small "c" — but it is one of the first scary things I remember overcoming. I was 7 and in the 2nd grade.
I grew up in New York City as a young child (very young child) in the 1960s. My amazing mother had a few quirks — including her own sense (or lack thereof) of time. Invariably, I was the last child picked up from school. So at age 7, we devised what seemed like an ingenious plan; namely that I would learn to take myself home from school. This involved 2 bus transfers and, significantly, crossing a busy street with 2 way traffic. I was in 2nd grade so, unlike now, I was pretty short. So where did I find the courage? Well it's simple. My mother. She taught me how to cross a street alone. She told me, "You just need to brazen your way across the street, stare the cars down and walk with confidence." Cars turning in both directions, horns blaring, 2-way traffic in New York City, but her simple solution was: "Brazen your way across. Find a point of entry, make eye contact and wade into the fray without hesitating." Good advice. There was a second part to this advice. She also told me if you get scared, find someone, probably a woman who looks nice, maybe another mom, and tell her you need help crossing the street. Brazen your way across and if you get scared ask a woman for help. Thank you, Mom. Pretty solid advice even today. Okay so now we've established that I know how to cross a street. (Or at least I do in most places other than Seattle where evidently it's illegal to jay walk).
So what does crossing a street have to do with courage in any meaningful sense to this 51 year old? How much courage, if any, does it take to succeed as a woman in the legal profession today? Is courage an operative principle when many of us, many of my colleagues and certainly my children's contemporaries think we should live in a world beyond gender. Do professional women still need to act as pioneers and, if so, what does that cost us?
And here's what I'd like to ask those of us who have a seat at the table: Do we have the courage to persist in a conversation many people think is over because they believe in a de-gendered world or that these are irrelevant conversations by out-of-touch people who "want to have it all." And yet the statistics are not reassuring. Roughly 18% of equity partners at law firms are women; less than 3% of the CEOs of Fortune 500 Companies are female, though we've added a few notable ones lately; and only 17% of U.S. Board seats are held by women. The issue is clearly not about entry level access or explicit institutional norms, but rather about true inclusion that demands that the dominant logic or voice of an institution make way for a more nuanced inclusive palette.
And here, I'd like to have courage and invite you to wade into the fray just a bit. I'd ask why does the question of the role of women in the work force so frequently get framed as a question of whether we "can have it all?" It isn't accidental that this complex issue of women's persistent inequality gets posed as a question about "having it all." That formulation is a lens that subtly but powerfully sidesteps institutional unconscious bias and makes binary and individual a series of interrelated choices and assumptions that somehow want too much or are careless about the price our ambition costs others.
It's not that I don't recognize that it's complicated or how uniquely privileged I am. I am the first to say and believe that my choices are simply that, and that no one "has it all." I have 3 amazing children but I am not the parent I would be if I were home full time (thank god, they say, imagining me at home all the time!). And if I were home more, I wouldn't have the career I have had or the network of extraordinary colleagues, many of whom are have joined me here in Chicago today. Thank you.
But what's wrong is not that we want too much or blithely think we are entitled to it all. But that as long as we allow that to be the lens through which we explain the persistent failure to achieve full equality in our own voices that will be the vehicle through which we are divided and conquered. We need to have the courage to insist on calling out pernicious false choices and refuse to remain hostage to unconscious biases.
So join me in wading into the midst of this noisy and clamorous intersection of women in today's workplace. I hope we all have the courage to brazen our own way across what used to limit women from having the full range of opportunities. And remember when you get scared, ask a friendly woman for help. Thank you.
Good morning everyone, and thank you, Doug, for that gracious introduction.
It's a privilege to be here today to deliver the President's address for CBI's 9th Annual Pharmaceutical Compliance Congress. I had the chance in 2008 to address the 5th Annual Congress and I'm thrilled to be here again for many reasons, but there are three in particular that I'd like to discuss during my remarks this morning.
I'll address each of these points in turn over the next several minutes, closing with a challenge as to where we must quickly aspire to be.
Few topics are as important to me, to Pfizer and to our industry as compliance and integrity in everything we do.
This is an obvious statement that anyone addressing you this morning would be expected to make, but it's important to be clear about what this really means, as, I believe, the future viability of our industry is at stake.
Most of us know that it didn't used to be like this. Rather than jockeying for position on annual "least admired industry lists," the pharmaceutical industry had for decades been widely admired and respected — and for good reason. I could go on at length with charts, statistics and other irrefutable evidence, demonstrating the incredible contributions the industry has made over the past 100 years toward the eradication, remission and relief of serious diseases:
As these examples and our history attest, the innovative biopharmaceutical industry has a noble purpose — simply put, to advance science and improve lives. The chance to build on and contribute to the fulfillment of this purpose is what first drew me from a pharmacy career into the industry nearly 30 years ago.
Today, however, our entire health care system is at a crossroads. As a society we face a multitude of complex and contentious legislative, policy, legal, fiscal and social issues, here and abroad, whose outcome over the next several years will determine the future of health care for generations to come, and in turn, significantly impact the viability of the biopharmaceutical industry. Whether our industry's future contributions will be able to match the remarkable accomplishments of its past, depends on several things, including:
As of today, I question whether the momentum is very favorable for us on any of these three items. While I'm concerned, let me be clear: I believe strongly in the future of our industry. But like anything worth having, there is a lot of hard work ahead to secure that future. Without getting into the merits of any of the policy, legal or other issues to which I've alluded, I know that our industry has uniquely valuable ideas and contributions to make that can help to shape the right outcomes.
But our ideas will never be heard or considered if we are not at the table. The fight for that seat is tenuous these days, and it won't be secure until we have won the battle to clearly and convincingly demonstrate that as an industry we are a credible partner and a trusted voice.
So what to do about it?
We have to get ourselves off those "least admired lists." We have to re-write the headlines that have become all too common over the past 10 years. Headlines about the allegations, the investigations, the civil and criminal prosecutions, the settlements and the Corporate Integrity Agreements. These headlines have eclipsed the great work that we have done, have helped shape the public view of who we are and what we aim to do, and have firmly formed a widespread perception and opinion that we can't be trusted.
We have to turn back the clock to a time when what we do — our noble purpose — was recognized, valued and admired. We were trusted before, and now we have to re-earn the trust of all our most important stakeholders — patients, their families and caregivers, physicians and the health care community at large, payers, state and federal legislators, regulators, our own colleagues, friends, families, neighbors and more.
Ensuring compliance and integrity in everything we do is the first and most important step to re-earning that trust. Without compliance and integrity at the core of our mission and operations, there can be no trust. Without trust, which is far more than mere compliance, the viability of our industry is in jeopardy.
In demonstrating our compliance commitment, Pfizer and the industry have a lot to show for themselves and to be proud of. As urgent, yet daunting a task as re-earning trust may seem to be, I'm encouraged in that much of the heavy lifting on some of the most fundamental and important steps has already taken place. Based on first hand experience, this is certainly the case for Pfizer, but I also believe it to be so for much of the industry as well.
There's something akin to a "12-step journey" required to really get one's hands around this situation. For our industry there are four key steps:
I'm confident that the first step has been embraced by the entire industry — just look at how many people are in this banquet hall. I also know that at Pfizer, we're well through steps two and three, and are firmly committed to the fourth. I'm sure that many of the other companies present here today can say the same, and hope that very soon so will the entire industry.
As an industry I think we've come to appreciate that while we are businesses, we aren't just any business, nor do we want to be. We have that "noble purpose" I spoke of and we aren't just making widgets. The price of admission is high and we must accept that being held to a higher standard on many levels is simply part of the deal. While compliance is the essential starting point, our stakeholders expect far more. Understanding and embracing this reality, has helped us to acknowledge the situation and the issues we face.
Having done so, the response is obvious. Every effort is required to convincingly demonstrate the industry's commitment to compliance and integrity, and to dispel any potential for misperception. Let me be clear about what this means.
Our challenge isn't actual compliance. That's a given and there are many compelling legal reasons that demand and incent us on that front. Our ultimate challenge is to overcome the "presumption of noncompliance" that so often exists and has, to a certain extent, been fueled by our own mistakes. A deep hole has been dug over the past 10 or more years, fueled by more than a few self-inflicted wounds from across the industry. This "presumption" fuels an unacceptable misperception about our commitment to compliance in the minds of patients, their families, physicians and many healthcare professionals who come to believe that the industry cares more for profits than patients.
We have to overcome this "presumption of noncompliance" and get to where every stakeholder interaction starts with a hard-earned "benefit of the doubt," an aspiration that I'll return to later in my remarks.
Although the battle is far from over, the industry has responded. It has raised the bar.
Beginning with the 2002 issuance of the PhRMA Code on Interactions with Healthcare Professionals, which was further expanded in 2009, the industry has adopted numerous reforms that have significantly evolved industry practices regarding the marketing, sale and promotion of its pharmaceutical products. The 2009 expansion included a requirement that participating companies certify annually that they have implemented policies and procedures to assure compliance with the Code. Updated earlier this month, PhRMA's website currently lists nearly 60 biopharmaceutical companies, including Pfizer, that have made this commitment.
With the most objectionable industry practices long eliminated, a wide range of additional industry-initiated voluntary reforms, new statutory mandates, and increasingly, the "de facto industry requirements" established with each newly-negotiated CIA, provide that remaining industry practices are or will soon be subject to transparency and disclosure measures, unprecedented in any other industry. Examples include PhRMA's Principles on the Conduct of Clinical Trials and the Communication of Clinical Trial Results, or the Physician Payment Sunshine provisions of the 2010 Patient Protection and Affordable Care Act. Collectively, these and other measures ensure transparency of interactions with physicians and many other components of the health care community, whether related to the conduct of clinical trials or the publication of their results, support for unrestricted medical educational grants, independent investigator initiated research grants, charitable contributions, payments for consulting services, or, as in Pfizer's case since early last year, even the cost of a few cups of coffee and a bagel.
Whether driven by the need to address actual compliance issues, to mitigate conflict of interest concerns, or simply to respond to reputation-based criticisms, the bottom line is that today the practices at Pfizer and across much of the industry bear no resemblance to the practices that underlie most of the major government settlements announced over the past 10 years.
Unfortunately, there continues to be limited awareness among many of our stakeholders and the public at large about the extent of these changes. With every announcement of the latest government settlement, often lost is the fact that in many cases the conduct in question is several years old, pre-dating the impact of the many reforms that have already been made. Settlement announcements and the ensuing publicity often serve to reinforce perceptions that we are a rogue industry that puts profits over patients, and considers fines and settlements to be an expected cost of doing business.
To be sure, our work is far from finished, and no matter how robust the changes and reforms are to date, only the passage of time will prove their effectiveness and sustainability. Nevertheless, for meaningful progress to continue, more must be done to ensure that all industry stakeholders — supporters and critics alike — understand the changes already made and the related impact.
Beyond the industry-wide reforms, many companies have gone further. At Pfizer, we have of course learned many difficult lessons arising from our own government settlements and resulting Corporate Integrity Agreements. We have a deeply embedded commitment to a culture of compliance that permeates our entire organization; backed up by a comprehensive and innovative compliance program.
Buoyed by the launch several years ago of the "It's Mine" campaign under the leadership of Pfizer's Executive Committee and our Chief Compliance and Risk Officer Doug Lankler, our commitment to compliance has been driven throughout Pfizer to every colleague in the U.S. and around the world. Its message being the simple reality that compliance is not the responsibility of the legal or corporate compliance departments, but of each and every colleague at every level of the organization, from every discipline and function and in every country where we do business. The responsibility for compliance at Pfizer is "not theirs or yours, It's Mine" goes the campaign. While catchy, it's not just a mantra and a fancy lapel pin, but a philosophy and belief firmly embraced by all Pfizer colleagues. This campaign has permeated the organization, re-awakened the inherent nature and instincts we all had toward compliance and facilitates an ongoing, transparent and highly engaged dialogue across all quarters of the organization as to what compliance really is, how it's achieved and the critical role every colleague has to play.
The "It's Mine" campaign has also taught us that compliance is not a stand-alone goal. Although essential, compliance for compliance's sake, has limited utility. It is most valuable when integrated real-time as a conscious consideration into every decision we make. Doing so consistently results in better decision-making that not only ensures compliance, but optimizes the potential for legitimate business objectives to be achieved, and anticipates potential environmental or reputational issues that might exist.
We've backed up this culture of compliance with a tangible investment over the past several years in an extensive compliance infrastructure and innovative, industry-leading compliance systems. Since my last CBI address in 2008, some of the organizational enhancements Pfizer has made to further establish the oversight, accountability and effectiveness of our compliance operations, include:
We've also implemented several formal compliance system innovations that greatly enhance our ability to ensure the effectiveness of and adherence to our existing compliance policies, procedures and training programs. Two notable examples are:
As effective as we believe our efforts to be, no system is capable of guaranteeing 100-percent compliance, although that remains our goal. When instances of noncompliance do occur, our program is designed to ensure they will be isolated, non-systemic events that occur despite a clear understanding of our policies and the consequences for non-adherence. We are diligent in our efforts to identify any instance of potential noncompliance as soon as possible. Through our PQA program, our long-standing open door policies, a well-publicized and anonymous compliance hotline, extensive HR requirements, our new Office of the Ombudsman and reports from third parties, including other biopharma companies, HCPs and government officials, we cast the net wide to capture any and all reports of actual, potential or even perceived compliance violations. Each is swiftly evaluated, thoroughly investigated and, when necessary, remediated up to and including termination. Root-cause evaluations determine whether modifications to our systems are needed.
With the addition of these and many other elements, Pfizer today has what we believe to be among the most comprehensive and effective Corporate Compliance programs in our industry, or any industry.
Within Pfizer we've often discussed the notion that industry-leading compliance can be a competitive advantage. I get that concept, but frankly I'd rather have our competitive advantage flow from the excellence of our scientific discovery capabilities, the quality of our clinical trial designs, the health outcomes achieved by the products we provide, or in the development of new, creative and valued ways to meet the needs of our customers.
While a competitive advantage based on a commitment to compliance and a sophisticated compliance system may yield certain benefits in the short term, in the long term, I believe we are far better served, as an industry, when all biopharma companies have an equal commitment to compliance and when we've all implemented effective compliance systems that are diligently maintained and continuously improved.
Our industry continues to be painted with a broad brush, with the lowest common denominator driving public perception and opinion. The announcement of every new government settlement, as devastating as it might be for the company in question, also triggers the "there they go again" sentiment, reinforcing the worst perceptions of our industry, and serving to set back hard-fought gains on our efforts to re-earn trust.
At Pfizer, we clearly are proud of our compliance commitment and program. I don't know if it's a competitive advantage or not, but if so I'll gladly give it up to raise the game of every company in our industry.
Like Pfizer, I know that many in the audience today are likewise proud of their own compliance programs and the enormous progress made in recent years. For any remaining outliers, it's time to up your game. If the culture and commitment to compliance within your organization is not where it could be - you have to get it there. Make your business leaders part of the process. Commit the resources to build the necessary infrastructure and implement the governance and oversight required to ensure long-term sustainability and effective results. Leverage the compliance best practices and innovative ideas that others have implemented. Reach out to them for help and advice; Pfizer is ready and willing to help in any way.
Let me turn now to the third point that I wanted to address, which is whether we are ready to begin a serious discussion about what a world above and beyond today's compliance landscape might look like for the innovative biopharmaceutical industry.
I think we are. Let me try to explain.
I've spoken at length this morning about the measures taken by the industry in response to the compliance and trust crisis it has faced. I've acknowledged that we've all had to learn some tough and unfortunate lessons. I've acknowledged that there may still be outliers within the industry and that we all may not yet be at the shared level of commitment and effort required. Without diminishing the gravity of this very regrettable phase in our industry's history, I've cautioned that we also not forget how vital this industry, with its "noble purpose" is, and how much society needs for its future contributions to meet or exceed those of the past 100 years. Finally, I've acknowledged that our work is far from over. That as firm as our collective cultural commitment to compliance is, and as robust and effective as our compliance programs and systems may be, as an industry, we still have to complete Step #4 of our four-step recovery process — to prove it with a long-term sustained track record of compliance. In other words, only time will tell and our actions will speak louder than any words.
Let's assume for a moment that we do just that. Five or 10 years from now the data is in and we'll have knocked Step #4 out of the park. We'll have proven the claim that the innovative biopharmaceutical industry is committed to compliance and integrity and that any residual instances of noncompliance are merely the isolated acts of wayward employees who will be swiftly dealt with. Compliance and integrity will have become so ingrained in our respective cultures and businesses, that like breathing, they're achieved subconsciously and effortlessly. Then what?
Is it only then that we will have re-earned the trust of our stakeholders? Is it only then that we can ask patients, the health care community, regulators, other government officials and legislators, and the public at large, to start giving us the "benefit of the doubt," rather than the "presumption of noncompliance"? To begin to believe that we are committed to compliance, that we don't regard the risk of massive government settlements to be a routine cost of doing business, and that we don't put profits over patients! Is that when we can expect supporters and advocates for the industry, and its "noble purpose," rather than critics and detractors? Is it only then that society will once again recognize the critical importance of the innovative pharmaceutical industry and the contributions it has the potential to make? Five or 10 years, maybe longer, does it have to take that long? Can society afford to wait that long? I don't think so.
Earlier, in discussing my concerns about the long-term viability of the innovative biopharmaceutical industry, I identified three conditions that must exist to have any hope that the industry's future contributions will match the remarkable accomplishments of its past. Let me repeat them again now. They are:
Considering the many complex and contentious legislative, policy, legal, fiscal and social issues presently at play in our society, here and abroad, that will impact the future of health care for generations to come, and in turn, the viability of the innovative biopharmaceutical industry, so long as the industry remains suspect and untrustworthy, the odds of securing any of these three conditions seemingly diminish each day.
The clock is ticking, society cannot afford for questions about the industry's commitment to compliance and integrity to continue any longer, much less five or 10 years. We need to be trusted now. So can we be?
Almost like a Subpart H drug seeking conditional approval, while we wait for the confirmatory long-term data to come in, do the industry's ongoing efforts to "re-earn" trust provide sufficient evidence that we mean it? A surrogate endpoint, if you will, to justify asking our stakeholders to begin to let go of the "presumption of noncompliance" and to start giving us the "benefit of the doubt"?
I sincerely hope and believe that the answer is yes. But if not, then I urge that we acknowledge what's at stake and commit that getting there is a goal we all must share — industry, patients, the health care community, payers, regulators, government entities and society at large. It's imperative that we take up the challenge to work urgently and pragmatically together to get to a world where compliance throughout our industry is a given, where trust has been "re-earned" and where the industry's contributions towards the eradication, remission and relief of serious diseases and conditions continue to benefit us, our families and generations to come.
Thank you for allowing me the privilege of being with you today. I truly value the chance to share my perspective and hope to join you again at future meetings.
A year ago, the world was a very stable and predictable place. Not so any more. Cutbacks, bankruptcy, job losses, deficits all abound.
Yet I see in this turmoil a real opportunity for Canadians. The global recession has forced everyone to re-examine not only how they do business, but why they are in business.
Given these new realities, I believe there is a way we can build a more competitive economy, a more productive workforce and lasting prosperity. We're better positioned to do this than many other nations.
But we have a problem because, frankly, we seem to be stuck in the past.
Much of Canada's economy is rooted in the past. The drivers of our wealth creation have been largely resource-based. There's nothing wrong with minerals, oil and forest products, but our business model of simply extracting and selling commodities will not be enough to ensure our prosperity in tomorrow's global economy.
Our weakness is in creating the wealth that comes from innovation. Our American neighbors excel at this, but we do not embrace or reward discovery. We do not have either the total environment or the entrepreneurial culture that will naturally create and foster a society and an economy based on research and innovation, even though we know - and even our governments accept - that this is the roadmap to future prosperity.
We do have a few stunning examples of success through innovation, such as Research in Motion and its famous BlackBerry. Just 10 years ago, BlackBerrys didn't exist. Now, they have become so useful and ubiquitous that it's easy to forget the true innovation they represent. Unfortunately, we know and are so proud of this Canadian success precisely because it is such a rare example of a Canadian innovation that has been developed to create real wealth on the global stage.
Canada scores high on the innovation index in terms of research output, which is measured by the number and quality of scientific articles. But we are low when it comes to developing inventions. That is, filing patents and in translating research initiatives into products that can be marketed around the world - and thus creating wealth.
This shortfall was highlighted just last month in the first public report of Canada's Science, Technology and Innovation Council, a body created in 2007. This distinguished panel includes Heather Munroe-Blum, principal of McGill University. In commenting on their findings, she said: "We need to work together to nurture the capacity to create, apply new ideas and finance their translation into commercial successes in the global marketplace." I couldn't agree more.
Among the world's 17 largest economies, Canada ranks 13th in terms of innovation. And we've been a consistent laggard since the 1980s. Indeed, our position has fallen in the past three years. In other words, compared to the rest of the industrialized world, Canada is growing less innovative at the very time when it must become more innovative. Even in telecommunications, which has long been a strength for Canadian innovation, we are slipping badly.
I will leave to others how this lack of innovation will affect the traditional sectors of our economy. I want to discuss how these problems impact the bio-pharmaceutical industry, and how that, in turn, has serious implications for both our economy and our healthcare system.
Let me first explain a bit about the hurdles we face in our industry, and what they mean for the future of all life sciences research and innovation in Canada and on our healthcare system and economy at large. Then let me present some options for a different and much more promising future.
Life sciences research and innovation in Canada is facing a perfect storm. One which, if we don't head it off, could spell the end of this vital sector as a key player in our economy, with all the negative impact that would have.
I see four factors producing this "perfect storm" for biopharmaceutical research.
The first is that we are at the end of what has been a tremendous cycle of innovation, what could be called the golden era of chemical-based pharmaceuticals. For 50 years, we have developed medicines that have transformed healthcare, allowing us to live longer and better lives.
Over the next three years, the research-based pharmaceutical industry faces an unprecedented number of patent expiries that will eliminate more than 25 percent of our revenue in Canada. This is not news, and we have been anticipating for this for years, but our industry faces a serious decline.
The second factor is that research has never been more difficult. We are on new turf, leaving the familiar confines of chemical-based discoveries and embarking on an amazing new journey into biologic medicines, gene-based therapies and targeted treatments to treat very complex diseases. We are doing some amazing things, and more is to come, but the transition is difficult and costly.
For example, look at the number of products that our industry is actually able to bring to patients. In the last three years, the U.S. FDA approved just 60 new molecular entities, less than half the number approved in the corresponding three years of the 1990s. So the markets for new products are smaller while the costs to develop them skyrocket - even while we are losing huge amounts of our traditional revenue. This challenging combination was not foreseen.
The third factor in the perfect storm facing bio-pharma innovation in Canada comes from abroad. Like many others, our industry has become completely globalized. If we want global companies and global investors to choose Canada as a centre for research and development, we have to fight against many other countries. Three weeks ago, I was at the huge annual BIO meeting in Atlanta - it was a United Nations. The whole world wants in on the life sciences, and the many senior political leaders who were present - including Premier Jean Charest of Quebec and Premier Dalton McGuinty of Ontario, as well as federal Industry Minister Tony Clement - show they do have an interest in and understanding of what is at stake.
As in other industries, the emerging markets such as India and China are gaining incredible advantages in attracting investment due to their market size and the growing capabilities of their workforces and medical systems.
The final factor is our attitude toward innovation. Instead of rewarding innovation, our health system is fighting it. The numbers speak for themselves. A study last year by Wyatt Health Management looked at 36 innovative medicines that were evaluated for public reimbursement in 18 western countries.
In European countries, an average of 91 percent of the drugs were reimbursed and in the U.S., 88 percent. In Canada, only 61 percent were even recommended for reimbursement by the Common Drug Review and far fewer had then actually been reimbursed by our individual provincial drug plans.
In fact, of 96 new medicines studied over five years by the Canadian Common Drug Review, as of last September the best province for actually reimbursing was Quebec, which was paying for 54 of them. Ironically, Quebec has not joined the other nine provinces in participating in the Common Drug Review so it can make its own evaluations in the context of its desire to recognize the value of pharmaceutical innovation. At the other end of the scale, Manitoba and British Columbia were paying for less than 20 of the 96 medicines. That means in those provinces only one in five new medicines was available to patients relying on those public drug plans.
Two provinces, British Columbia and Nova Scotia, have even adopted policies of reference-based pricing, policies that say the cheapest drug in a category is good enough, and that they won't pay for any other innovation in that drug category.
Those are the four factors in the perfect storm I fear. But to understand the full potential impact of that storm, it's important to understand the inter-connectedness of the bio-pharma research sector which is all threatened by this storm. This isn't just a matter of big pharma companies facing tough times. It's far more than that.
The life sciences sector includes not only large pharmaceutical companies, but also biotechnology companies and academia which rely on a continuous stream of public and private investment to keep operating, with much of that private investment being R&D investments of the innovative pharmaceutical companies, which total more than one billion dollars in Canada every year.
The biotech companies create thousands of jobs, as does academia, and their activities complement those of large pharmaceutical companies. The real challenge, then, is to allow the whole sector to succeed by allowing each part to complement the other.
But the perfect storm I have described threatens all that by seriously diminishing the ability of profit-making bio-pharma companies to invest in Canadian R&D. The result? A sector which is seen by so many as a key pillar of our economic future is at risk.
So, while Canada describes itself as being "pro-innovation," our health system sends a contradictory message in refusing to pay for innovative medicines. This has two consequences, one for patients and one for investors.
Only a major paradigm shift can take us from this course. But how could we do it?
The first change we can make is a long-term one. We need to create an environment for our children to, first, stay in school and, second, develop an interest and enthusiasm in exploring science and technology. We have to reaffirm the importance of this sector for the economy of tomorrow.
We also need public policies that embrace all aspects of creating an environment for innovation. For example, Canada must ensure its provisions for respecting intellectual property at least match that in effect in the U.S. and Europe.
An interesting model for embracing innovation can be found in North Carolina. Thirty years ago, the foundations of manufacturing in that state were textiles and furniture, and neither was doing well. That sounds very much like Quebec in recent years.
But in the past 10 years that state - whose population is just a bit larger than Quebec's - invested more than $1.2 billion in bio-technology facilities, research, training programs and incentives for companies. It now has more than 54,000 people working for some 500 biotech companies and is considered the third-largest biotech centre in the U.S., behind only California and Massachusetts.
Why? Not because they had any huge natural advantage beyond a few excellent universities like we have in the province of Quebec. They made it work because they had the will and foresight to make difficult choices for the future by investing to make it happen.
There are some promising signs here, things that if nurtured give hope for the future. We at Pfizer are investing in several vital projects that we believe shine a light on the way we can progress with public-private partnerships and cooperation.
One is the creation of 12 Centres of Excellence for Commercialization and Research, a key element of the federal government's Science and Technology Strategy. All of these initiatives have the potential to fast-track the commercialization of some of Canada's most promising research. Since last year, Pfizer has invested a total of $15 million in four of these ground-breaking public-private partnership projects. Beyond the sum invested, Pfizer also works with these partners by investing time and expertise to support them and the whole Canadian life sciences sector, acting as a connector between academia and the commercial world. This is an example of the type of mutual support I referred to as being vital to ensure future success.
Another vital initiative of which I am particularly proud is a unique public-private partnership right here in Montreal called the Quebec Consortium for Drug Discovery, or CQDM by its French acronym. On the private side of the partnership is Pfizer, as well as AstraZeneca and Merck Frosst, both also key players in pharmaceutical R&D here in Montreal. On the public side is Quebec's ministry of economic development, innovation and export trade, as well as Quebec's public-sector health research funding agency, and the federal government.
The CQDM promotes synergy between academic and industrial research through the creation of a network for exchange and cooperation among research at universities, hospitals, biotechnology companies and the broader pharmaceutical industry.
The work it does is at the precompetitive level. This means its projects do not set out to develop new drugs themselves. Rather they create enabling tools and technologies that will accelerate drug discovery and development, such as new tests for toxicity or efficacy, new models, or new biomarkers to evaluate a certain condition. This work is done in an atmosphere of partnership so it is known in advance that the research projects are relevant to the needs of industry, thus greatly enhancing their marketability upon development.
In this way, public research funding is leveraged into meaningful results with market value, governments can see their research investments creating real results, private companies can get insight into the new thinking of a broader range of researchers, and researchers can get facilitated access to turning their research into commercial opportunities. Instead of a perfect storm, we get perfect synergies through which everyone wins - particularly patients who are the ultimate beneficiaries of the new treatments which result.
We are making these positive steps despite the current environment I have spoken about. Imagine what further great progress we could make for patients and for our economy if we truly embraced research and innovation!
I would like to leave you with some further thoughts - perhaps radical - about how governments, academia and the bio-pharmaceutical industry can and need to work even more closely to in "co-creating" the environment that will foster innovation and benefit patients.
I'd like to suggest a different way to do things. Rather than governments and industry fighting, let's agree on a system that embraces both innovation and the appropriate use of all medicines, based on the principle that innovation is welcome because it benefits patients and the health system when used appropriately.
We can co-create such a system. First, we need a constructive and open system of dialogue for payers, physicians and innovators to fairly assess the value a new medicine brings to patients and to settle on reimbursement policies based on appropriate use. Second, that review should happen at the same time Health Canada is doing its safety and efficacy review, not after.
As a result, when a new medicine is approved by Health Canada, it could immediately be reimbursed by provinces. Patients would benefit, companies would have a more predictable business model and a real "pro-innovation" message would be sent to the whole world.
To complement this, I also recommend regular evaluations of appropriate use of medicines with payers, physicians and patients. These re-evaluations can take into account new data or new uses for a medicine and ways to eliminate any inappropriate usage.
Let's remember, it's not medicines that are expensive - it is medicines not being used properly. By ensuring the right medicines are used by the right people at the right time, governments can save overall healthcare costs, patients would benefit and we would help secure our economic future by reinforcing the life sciences sector.
I firmly believe we can co-create an environment and system that could make Canada a world leader in research, innovation and healthcare. I want to be a part of that, Pfizer wants to be a part of that, and I'm convinced that by working together we have the means, and the motivation, to make it happen.
Canada has a choice. Where do we want to be in 50 years? What will be the pillars of our economy? Those are the real questions.
Thank you for the opportunity to share my vision with you, and I wish you all good health and prosperity.
Good afternoon. Thank you for this extraordinary honor and for the wonderful work of Legal Momentum - a powerful force for women's place and voice in our complicated professional world.
I want to start by telling you a story about the first time I attended this lunch. I heard Esta Stecher, the general counsel of Goldman Sachs, speak. Being me, I even remember what she was wearing, of course. It was a white turtleneck. But mostly I remember what she said because she started off quoting Allen Ginsburg and the beat poets. And I thought about how cool she was. I loved that Esta was unafraid to speak in a way that revealed she had a life. She didn't feel she had to check her personality, her true voice, at the door because she was a successful professional woman.
So when it came to my remarks, I thought, 'This should be easy - just speak in my voice.' After all, I am long past the days of contorting my voice to fit someone else's idea of what a professional woman should sound like. I wasn't always so comfortable. Let me tell you another story - Early on, when I took my first deposition, I was convinced that I needed to look more imposing in order to truly bring my witness into line. So I pumped the chair up so high that I actually wound up toppling over, leaving me on the floor with my skirt over my head.
Since those days I've learned to speak in a more authentic voice. I have spent a lot of time through my career coaching women on how to act confident without being presumptuous, how to ask without seeming needy. And to get organizations to recognize that they need to be far more accepting of the range of women's voices without suggesting there is one authentic female voice, or that we need to make way for a female voice simply because it is female.
But it wasn't so easy to talk about voice after all. I continued to feel that the concept seemed both incomplete and unfair.
Here I'd like to share a Pfizer story that helps to explain why the voice concept didn't satisfy me. I am one of the executive sponsors of a global diversity and inclusion effort at our company, and we've been doing some root cause research. I should warn you that this data is not finalized, but an early look at the data showed us that, lo and behold, the men surveyed thought there were far more women in senior management than there really are. And these same men thought there was a distinct career advantage to being female. Women, of course, had the opposite (and more accurate) view, and identified, correctly, that there are not so many of us in senior management and that being female may not be such a business advantage.
So, this got me thinking, and it explains why I am not satisfied with talking simply about women's voices. Personally and institutionally, we are long beyond the days of wondering whether we have a voice - instead we must ask whether our organizations are willing to make room to hear them. I am sure that this explains why for some men, those whose voices must make way for other voices, it may feel like a zero sum game. These are some of the unspoken prerogatives of owning the discourse - the short hand of the institution must give way to allow other voices, because few things can be so paralyzing, or so lonely, as to speak and not be heard. It is our historical moment to ask of our organizations that they hear us, not whether we have a voice. Now I'm a realist, and I know it's our job to speak in a way that can be heard.
So I realized that what I really wanted to say is thank you. Thank you because the confidence I have in my voice belongs to so many of you here. As I look around this room, I'm struck by the fact that the various strands that inform my voice are only possible because so many of you have helped to create an environment in which I and others are unafraid to speak.
My father, who is here today, and who always encouraged his three daughters to speak out and do our best.
My mother, who went to law school at the age of 45 and was always a role model, is no longer here - but her incredible network of female friends continues to support me.
My four best friends from college, all of whom are still much cooler than I but who supported me as the philosophy major nerd in a group full of film students.
My husband, who has a unique perspective on how I deal with not being heard.
My former clients, who allowed me to speak for them.
My colleagues and friends at Pfizer, a truly supportive place for women led by our CEO, my boss, who does really get it, and the women of Legal Momentum, who are committed to ensuring that our voices are heard.
At the end of the day, this is the gift we can and must give each other - one that is so critical to real change - to listen to voices that may sound a bit different in tone, content or pitch. To allow these distinct voices to reverberate. And to require of our organizations that they be willing to change to hear all of our voices. That will be and is a measure of leadership, and I know we all are committed to this and recognize we have a way to go.
Thank you all for being here and for your support of Legal Momentum.
When I was invited to join this panel of speakers to talk about collaboration, I started to think about the role partnering with academia and research institutes plays in my daily role at Pfizer. And it occurred to me that rarely a day passes that I, or a member of my team, is not working with a university or medical research center to further a project.
These partnerships go far beyond photo-ops and press releases — they have become an absolutely essential part of commercializing biomedical innovation.
As Winston Churchill so grandly stated, "If we are together nothing is impossible. If we are divided all will fail." While perhaps not as epic as Churchill's notion, it's undeniable that a major factor influencing a company's ability to turn today's innovation into tomorrow's life-saving medicine is establishing and maintaining strong and diverse partnerships in both the public and private sectors.
With so many challenges faced in successfully bringing a medicine to market, we need all the members of what I call the biomedical ecosystem to collaborateýThis ecosystem includes academia, public research institutions, government agencies, industry and nongovernmental organizations.
The business model for pharmaceutical R&D is evolving. In the past, my company relied mostly on internal efforts — our own scientists in our own labs — but we have moved towards establishing greater and greater numbers of partnerships that span the entire spectrum of our activities.
Given the complexities and the expense of R&D, we can accomplish much more, in a shorter time, with less cost and duplication of effort, when each of our organizations brings their special strengths to bear.
There are plenty of immediate opportunities for partnering to meet challenges:
Of course, we need all the help we can get as we wrestle with the growth of chronic and complex diseases like cancer, diabetes, depression, AIDS, cardiovascular diseass...and the list goes on and on...
Japan is a model of successful partnerships — with government, academia and industry working together very effectively. And while it can be a somewhat controversial issue for some policy-makers and scientists, the world needs even closer cooperation between industry and academia.
One study, by professors at the Massachusetts Institute of Technology and Boston University, looked at the 21 most "important" drugs introduced in the U.S. between 1965 and 1992 and assigned credit for who discovered the drugs and who made the "key enabling discovery" that led to the drug's discovery. Not surprisingly, their study demonstrated that publicly-funded research — occurring at universities and the National Institutes of Health — produced the key enabling discoveries underlying nearly 80% of the important drugs. But private industry actually turned these enabling discoveries into viable medicines, with industry inventing more than 90% of the drugs themselves.
The average lag time between the 'key enabling discovery' and the introduction of a drug is 24 years, which reflects the significant work required to turn the discovery into a medically-useful, market-oriented product. So, the enabling discoveries, while incredibly valuable, are not enough.
Collaboration with industry is the key to actually developing cures. The research done by these two sectors is highly complementary in the U.S., and in the words of a National Institutes of Health report, it "has created the scientific capital of knowledge that fuels medical and biotechnology development." Pfizer has built robust partnerships around the world, with a wide-ranging array of institutions. I would like to briefly highlight a few of them.
The Genetic Association Information Network — known as GAIN — is a public-private partnership involving the Foundation for the National Institutes of Health and the private sector, with Pfizer as a major funder and scientific adviser. The network's goal is to help find genetic causes for common diseases, including Attention Deficit Hyperactivity Disorder, diabetic nephropathy in type I diabetes, major depression, psoriasis, and bipolar disorder. The information derived from GAIN is publicly available to researchers worldwide. By comparing the genetic makeup of healthy people with that of people suffering from disease, scientists should be better able to target diagnosis, treatment and prevention strategies. GAIN scientists have genotyped more than 18,000 samples in six major common diseases in the past 18 months.
Another important collaboration is taking place with our Center of Research Excellence site project, or CORE. The aim of the CORE project is to improve the speed of clinical study recruitment, while also improving the quality and cost effectiveness of trial execution. This is being done by establishing relationships with multi-therapeutic research institutes worldwide — each dedicated to Phase II studies.
We launched the program earlier this year by partnering with Mexico's National Institute of Medical Sciences and Nutrition and Argentina's Instituto Medico Especializado. Additional sites are being identified in South Korea, France, Poland, Canada and the U.S. And in July of this year, Pfizer and the University of Pennsylvania entered into a three year strategic alliance to work together in areas such as basic and translational research, clinical development, and clinical care and policy projects.
Clearly, when defining the parameters of these partnerships, we must avoid conflicts of interest. But we can strengthen these natural links — and we must. This includes fueling innovation by providing needed resources to academia and research institutions. Commerce is not a bad thing across the system; it enables science to flourish.
More scientists are also beginning to understand that to fuel innovation further, they must reach beyond the immediate community, and engage across the ecosystem. Such collaboration enables cross fertilization of ideas across institutional boundaries, facilitating each party's ability to "do good science."
One reason why external sourcing is so important to us is the key challenge of ever-increasing R&D costs, caused by high failure rates that lead to attrition in R&D for new medicines. The discovery and development of new medicines is a complex, risky and very expensive process — a long, exhaustive journey through research, discovery of potential medicines, pre-clinical development tests, expensive clinical trials and regulatory approval. Almost one billion dollars later, if all goes well, a new compound may end up helping a patient. Even when we succeed, we still rarely make money on a given medicine — barely one in three return their investment to the company.
Governments play an important role in the biomedical ecosystem — they have an intrinsic role in sustaining a successful healthcare system. That is, a healthcare system with efficient delivery and distribution of services and efficient pricing and reimbursement for services that stimulate investment, resulting in further innovation and enabling patients to realize the fruits of innovation. And this system must be supported by an effective use of intellectual property — including enforcement of IP rights so that investments in the discovery and development of new therapies will continue.
Public health can be advanced by placing some pre-competitive ideas and resources in the public domain, but without the proper rewards, companies will be dissuaded from pursuing the time-consuming, risky and expensive work required to develop useful medicines. Thus, it is not always in the patients' best interest for IP to be open to all. Rather, it is imperative to have strong intellectual property protections that encourage innovation. IP provides predictability and serves as the glue that holds partnerships together.
With all of these challenges come opportunities, and I am convinced that advances in biomedical research — across therapeutic areas — will yield effective treatments that will improve medical outcomes and create efficiencies in healthcare.
The biomedical ecosystem — from academic centers, national laboratories and the biomedical industry to regulatory agencies and nongovernmental organizations — must be maintained and strengthened — and we must work collaboratively in the pursuit of scientific and biomedical innovation.
Let's work together more deliberately and creatively to advance science and improve health around the world.