Forbes: Biotech CEOs: Don’t Let EpiPen Threaten Innovation
Guest Post Written by: Ron Cohen, Paul J. Hastings, Rachel K. King, Jeremy M. Levin, John M. Maraganore and Michael A. Narachi
Sept. 13, 2016 | View at Forbes
Recently there have been numerous articles and editorials understandably scrutinizing the increases in pricing of EpiPen produced by Mylan, a generic drug company. The strong reaction to the behavior of Mylan and a few other companies is threatening to impede the ability of R&D-focused innovator companies to provide innovative, life-changing new therapies to patients.
The drug industry comprises thousands of companies broadly separated into two business segments: generics companies and about 4,000 large and small innovator pharmaceutical and biotechnology companies. The generics industry exists to provide a competitive marketplace for older drugs (whose patents and/or other exclusivity have expired) at reduced prices; the biopharmaceutical industry invests in inventing new medicines.
Our healthcare system needs both innovators and generics to operate efficiently. A strong, competitive generics industry supports drug innovation. When multiple generic versions of a medicine are available, this serves to lower the cost of medicines after innovator companies have received a fair return for the enormous risk and investment in research and development of new therapies.