. . .the bigger issue with Witty’s stance is the direction that he is taking GSK. His company has a long and proud history of delivering new drugs to patients. Unfortunately, he has seemed to have lost his appetite for the difficult challenges faced in drug discovery. Sure, vaccines and consumer health care product are necessary and important. But so are new drugs for cancer, rare diseases, Alzheimer’s disease, etc. For a major company like GSK to deemphasize this type of research, especially given all of its R&D experience and capabilities, will correspondingly decrease the amount of innovation devoted to curing these diseases. That’s a shame.
He’s referring to Witty’s statements recently on drug pricing, and his calls to move GSK out of areas that depend on pricing power. I have long-term worries about this myself, but at the same time, if you come up with a really groundbreaking drug, you do indeed get to price it at what you think it’s worth. That’s your reward for taking on those substantial risks. (If you come out with a drug that makes your flu symptoms five per cent better for the last two days of the flu, on the other hand, you’re not going to get many takers at $50k per course of treatment).
So if Witty is saying that the industry needs to be careful with its pricing, because we can’t use that tool forever, for everything, I think he’s right. But if he’s saying that a fifty-thousand-dollar drug that saves the healthcare system a hundred thousand dollars is not a good deal, then that’s harder to support. (You do, of course, have to make sure that the hundred thousand in savings are real!)