December 14, 2015
Interviewed by: David Snow
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Pharma CEO: Daraprim Price Hike is ‘Terribly Unfortunate’

Dr. Francois Nader was CEO of NPS Pharmaceuticals, and recently sold it to Shire Pharmaceuticals for $5.3B. He shares with Privcap his analysis on the Daraprim pricing controversy, in which a new owner of this drug vastly increased the price, causing many to wonder what the effects will be on the pharmaceutical industry.

Dr. Francois Nader was CEO of NPS Pharmaceuticals, and recently sold it to Shire Pharmaceuticals for $5.3B. He shares with Privcap his analysis on the Daraprim pricing controversy, in which a new owner of this drug vastly increased the price, causing many to wonder what the effects will be on the pharmaceutical industry.

Pharma CEO: Daraprim Price Hike is “Terribly Unfortunate”
With Dr. Francois Nader, Former CEO of NPS Pharmaceuticals

David Snow, Privcap: Today, we’re joined by Dr. Francois Nader, the former CEO and President of NPS Pharma and current Chairman of Acceleron Pharma. Dr. Nader, welcome to Privcap. Thanks for being here.

Dr. Francois Nader, Acceleron Pharma: Thank you, David. Pleasure to be here.

Snow: Dr. Nader, having run NPS Pharma for several years successfully, I’m interested in your views on a controversy taking place in the pharmaceutical industry having to do with drug price wars, I guess you could call it. There was a drug called Daraprim—its new owner jacked up the price dramatically, which has led to controversy and also worry among some that there will be great price volatility in the pharmaceutical industry. What is your take on this most recent event?

Dr. Nader: Very simply, I don’t see any justification or rationale for jacking up the price of a drug that is needed by patients who have very limited other alternatives. This being said, I think as an industry, we owe it to ourselves really to continue communicating the value of our work and the risk associated with it. One has to remember that out of 100,000 compounds, only one makes it to the finish line. One has to remember that this is a process that could take 15 to 17 years and…that, throughout this process, there are many go/no-go decisions that have to be made. Then, at times, we get to the finish line and the product is not approved.

Lastly, if the product is approved, then we have a short period of time to recoup our investment. Obviously, as an industry, we owe it to our investors to give them a return that is commensurate, if you will, with the risk they’re taking. This being said, it is also our responsibility to continue characterizing the value of the drugs we put in the market, and there are many tools to do it. At the end of the day, we need to make sure our drugs are cost-effective and that [they] improve the quality of life and ultimately reduce the healthcare cost. If we meet these three criteria, then pricing is irrelevant because, at the end of the day, society accepts to pay for a return on its investment in a way, call it healthcare investment or public-health investment.

When we move away from this rationale, this is where we get ourselves into trouble. And this one example is terribly unfortunate because it reflects very badly on an industry where you have terrific people trying to do a terrific job saving the lives of patients. It’s very unfortunate that this situation might reflect negatively on what we do as an industry.

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