Pharma stepped up to the plate this year to deliver vaccines and desperately needed therapeutics in record time. Will these historic achievements change the industry's reputation in the eyes of the public? Chief Content Director, Karen Langhauser, and Senior Editor, Meagan Parrish, take a look back at pharma's accomplishments — and stumbles — during the pandemic.
Meagan Parrish: 2020 — This nightmarish year is finally over. We are rounding the corner 2021 and vaccines are making their way around the country and the world and there are finally some glimmers of hope and relief at the end of this very dark tunnel we’ve been in.
2020 was a depressing and nutty year for everyone — but there was perhaps no other industry that was impacted in quite the same way as pharma.
So before we say goodbye to 2020 completely, we’re taking a look back at what it’s been like covering pharma during what has definitely become a watershed year for the industry — and in particular, what it could mean for how the public views pharma going forward.
I’m Meagan Parrish and you’re listening to Off Script, Pharma Manufacturing’s podcast that goes beyond the pages of our magazine to discuss the issues that matter to the industry most.
Today, we’re going to talk about pharma’s topsy turvy year — all the highs and all the lows — and how it’s impacted the industry’s reputation.
In March 2019, I wrote a cover story about pharma’s reputational standing, which a Gallup poll showed had been in decline in recent years. So, the article discussed why pharma has these image problems and what the industry could do to turn things around. Little did we know, we were on the cusp of pharma being given a huge opportunity to tackle a global problem and win back the public’s trust.
So, has the industry measured up to this challenge?
I’m joined today by Karen Langhauser, our chief content director, to take a look back at how well pharma companies performed in 2020 in terms of behaving as good corporate citizens at the center of this epic struggle to end the pandemic.
Karen, thanks for joining me.
Karen Langhauser: Thanks for wanting to chat with me, I’m happy to be here.
Meagan: So, before we dive into this issue of how well pharma companies have behaved in 2020, I want to take a moment to reflect on what it’s been like to be a journalist in this industry during the last year. You’ve been an editor on the pharma scene for a while — about 8 years. How was 2020 different for you?
Karen: I think on a personal level it's worth mentioning what it's been like being a journalist covering the pharma industry during all of this. It's the first time I can remember that we are competing with mainstream media for stories. All of a sudden, our industry sources are being interviewed on CNN and Fox. Normally, when I tell someone I'm a journalist, their first question is always "oh, for what magazine?" and up until 2020, "Pharma Manufacturing" was really the end of the conversation. Nobody cared, right? And now, finally, the general public finds the pharma industry, and pharma industry journalists, interesting and sees pharma for the innovative and life-saving industry that it is. And I’m really excited about that.
Meagan: I’m curious, as someone who’s followed pharma for so long: How did you think this pandemic was going to play out once it all got started?
Because I remember when it all started and my dad said to me something along the lines of “Well, the pharma industry sure is going to rake in a ton of money.” And I said, “I doubt it” because at the time, I thought this was going to go the way of SARS, which fizzled out within about a year and by the time pharma companies had vaccines ready, there weren’t enough patients to even test them on. In other words, I was way off in my prediction and my dad was right…again.
So, what were your feelings about it back in the early part of the year?
Karen: To be honest, I drastically underestimated the extent that this pandemic would affect the United States. I immediately thought of Ebola in 2014, when the possibility of it spreading completely dominated the news for weeks and ultimately there were less than ten cases and no one who contracted Ebola while in the U.S. died from it. From that, I mistakenly overestimated our country’s ability to contain and treat contagious diseases.
But at some point early on it hit me that this was the perfect storm of so many issues that have been bouncing around in the pharma industry but never adequately dealt with:
For one, you have not enough value attached to R&D in infectious diseases, which ultimately has led to a lack of pandemic preparedness: How many countless simulations, conferences, workshops and committees have assembled to evaluate and improve global pandemic preparedness only to come to unsettling conclusion that the world was woefully underprepared for a pandemic?
And then you have an overreliance on China – not just for drug ingredients but personal protective equipment, raw materials needed to make medical devices, and surgical equipment. Much of the life sciences industry, our publication included, has been talking about the impending dangers of letting one country control so much of the health-related supply chain.
And then there’s speed, or lack thereof. The pharma industry and even the FDA, has a reputation for moving slowly when it comes to change. There’s very much a “if it aint broke don’t fix it” attitude in many parts of the industry.
And finally, there’s pricing and patients’ inability to afford treatments. Disparity in health care has never been more apparent than it is during this pandemic. And now, with so many people out of work, there’s even more urgency surrounding drug pricing and people not being able to afford not just COVID treatments, but drugs in general.
Granted pharma isn’t solely responsible for all of these issues, but the pandemic kind of forced pharma to deal with all of these things at once.
Meagan: So as reality sunk in that this virus was going to hang around for a while, all eyes turned to pharma for hope, which is different. Usually, pharma just gets the stink eye from everyone.
Karen: Yeah, that’s true. For the cover story I wrote on vaccine skepticism, I interviewed the former president of Pfizer Global R&D, John LaMattina. John is also the author of several books about the pharma industry and is a bit of an expert on pharma’s reputation. After I interviewed him, I read his book “Devalued and Distrusted: Can the Pharmaceutical Industry Restore its Broken Image?”
The book starts with a story about how John was asked to be a guest on “The Dr. Oz Show,” and it wasn’t until he was on the show that he realized the title of the episode was “4 Secrets the drug companies don’t want you to know.” John thought he was there for a healthy debate about the pro and cons of the pharma industry and it turns out he was cast as the villain and people were not interested in what he had to say. And through this experience he really saw how much people truly hate the drug industry. In the book, he seeks to explain a lot of things that are being misunderstood and misinterpreted by the public.
One thing he pointed out that I thought was interesting was that the pharma industry used to have a great reputation. Starting in the late 80s, Merck was deemed “the world’s most admired company” for seven straight years by Fortune magazine. As recently as 1997, pharma companies were still in Fortune magazine’s Top 10.
But then pharma’s reputation started to tumble. Drug prices were sky high, there was scandal after scandal involving collusion, fraud, payouts to doctors. Recently there have been issues with tainted medications and recalls and of course pharma’s role in the opioid crisis, and all of this was dominating the news until the pandemic.
Meagan: Right, and as the coronavirus spread, it became clear that pharma really had an opportunity to step up and save the day.
CNBC Clip "How pharmaceutical companies are responding to the coronavirus outbreak:" “Well thanks Joe, and as we’ve seen those case numbers tick higher, we’re also hearing from more pharmaceutical companies responding to the outbreak. Some are developing potential vaccines, including Moderna Therapeutics, which is working with the NIH, others are exploring the development of new drugs like Regeneron and Vir Biotechnology.”
CNA Clip "Pharmaceutical companies scramble to produce coronavirus vaccine:" “Big pharma companies are scrambling to be the first to produce a COVID-19 vaccine. At least 17 different vaccines are in production, but it will take months before any one is made available to the public.”
CNBC Clip "The Race To Develop A Coronavirus Vaccine:" “In terms of vaccines, the U.S. has moved at a pace we have never seen before, but still it’s going to be at least a year to a year and a half until they have a vaccine broadly available to deploy.”
Karen: During my interview with John LaMattina, he said that he felt the pandemic was a turning point for pharma’s reputation. One of the things he says, I actually have a quote written down here, he said: “things seem to have really turned around for them last March when a lot of companies basically dropped what they were doing and devoted resources to COVID-19. And what was fascinating was people suddenly started to get it. In this crisis, who’s going to come up with the therapeutics and vaccines? When you really want to gear up and run a clinical trial of tens of thousands of people and manufacture a billion doses of vaccines, only one place does that. And that’s the pharmaceutical industry.”
Meagan: Yeah, and I have to point out that this emphasis on a pharma-fix was also being driven by the Trump administration. Prior to the pandemic, Trump treated the industry like one of his main adversaries. But once it became clear that we were in hot water with this virus, he called many of these major pharma CEOs to the White House to ask all of them basically “How soon can you fix this?” And throughout the entire pandemic, it’s been clear that Trump is more interested in approaching the coronavirus with therapeutics and vaccines than with mitigation efforts like masks and lock downs.
CBS News Clip "Trump to meet with pharmaceutical CEOs amid growing coronavirus outbreak:" “President Trump is said to meet with the heads of pharmaceutical companies. He says he plans to discuss a Coronavirus vaccine.”
CNBC Clip "Trump meets with big pharma to tackle coronavirus:" “The president and the Coronavirus Task Force meeting with the CEOs of major drug and vaccine makers — Regeneron, Gilead, GSK, Moderna — and research chiefs from Pfizer, J&J and Sanofi Pasteur. The president trying to get a sense of a timeline from these companies.”
Meagan: And, of course, we’ve seen this play out in the biggest way with Operation Warp Speed, which has funneled an astounding amount of money into the efforts to quickly develop a vaccine.
Karen: Yeah, while I’m guessing most health officials would have preferred to see a more balanced federal approach – one that combined mitigation with treatments and vaccines – I don’t think anyone would argue that the pharma industry hasn’t held up its end of the bargain here. Right now, with Pfizer getting emergency use authorization and Moderna likely right behind them, all eyes continue to be on pharma.
Meagan: Right, so how has being at the center of attention worked out for pharma?
Personally, I think it’s mostly been positive but there have been a few challenges for the industry.
So, let’s look at the bad news. Here are the moments when I think pharma has stumbled on this sprint:
Let’s start by following the money. There have been several times during the development of these vaccines when pharma companies have released preliminary results that look good — but include minimal data. And naturally, every time a company does this, their stock prices shoot up. So, many have pointed this out and have accused companies — like Moderna for example — of purposefully releasing “positive” news to give their shares a boost.
Now, it is worth noting that these companies say that they are just trying to be as transparent as possible and that’s why they have sometimes released very preliminary results that project good news, even if they don’t reveal all the details. Either way, this perception that companies could be manipulating stock prices has raised eyebrows.
And the same goes for a number of questionable stock sales that executives at pharma companies developing vaccines have been a part of.
I’m going to keep picking on Moderna for a second because their vaccine has been one of the front-runners for approval and so they’ve been at the center of this major race for a vaccine. Back in September, NPR published an article detailing how executives at Moderna have made tens of millions of dollars cashing in their stocks this year. Here’s a quick rundown:
Moderna’s CEO, Stephane Bancel has sold about $40 million worth of stock this year, the company’s chief medical officer sold about $60 million worth of stock and the president sold about $10 million.
And we’ve seen this pattern repeated at some of the other major companies involved in the development of coronavirus vaccines or treatments.
Now, again, it’s worth noting that these stock sales don’t appear to be illegal. As long as they happen after public announcements are made that could impact the stock price and not beforehand, then they are more shielded from insider trading accusations.
Some have also argued that these were pre-planned sales and it would look just as bad to pull out of them. Here’s how Stephane Bancel, CEO of Moderna, explained it to CNBC in July:
CBNC Clip "Moderna CEO Stephane Bancel on executive stock sales:" “So, what we have done is we have set up 10-B-5 plans a long time ago, if you look most of the teams set up plans when we went public, you might remember Andrew this was in December 2018. Obviously, when we set up those plans, none of us had any idea what was going to happen in 2020.”
Meagan: But either way, as a former SEC official quoted by NPR pointed out, “It’s not good optics.” So unfortunately, I think company executives are casting a dark cloud over their vaccine development efforts by appearing to personally profit so much from the pandemic.
Karen: Well, in all fairness, pharma leaders are certainly not the only CEOs to cash in on stock gains during the pandemic. Jeff Bezos has cashed in more than $7 billion of Amazon’s shares this year. The CEO of Microsoft apparently sold almost $19 million worth of shares in September alone. Profiting while people are dying from a pandemic isn’t a good look for any leader, but in my opinion, it shouldn’t taint the accomplishments of these companies that have developed incredibly impressive vaccines during one of the darkest times in history.
Meagan: Right and that’s a fair point. And we’ll see of course what everyone chooses to focus on going forward.
But still thinking about 2020, I wanted to point out another challenge, which was the political pressure that was created around the approval of vaccines, which also hasn’t reflected well on pharma — even if it’s not really the industry’s fault. I don’t think it helped at all that during his campaign President Trump kept talking about how vaccines might be approved before a “very special day” — meaning election day — as if he was playing a hand in how that situation was progressing and whether or not one would be approved.
Karen: Yeah, that was definitely a mess. You had the President saying one thing and the pharma companies developing the vaccines saying another, and heads of health agencies saying something else. All of a sudden, the vaccine timeline was a partisan issue. Even the FDA got dragged into it when Trump accused them of being, as he said, in the deep state and basically saying they were stalling progress for political reasons. And ultimately all this did was generate more skepticism about these vaccines. And, as we know, if not enough people are willing to get vaccinated, a return to any sense of normal may never come.
Meagan: Absolutely. And to their credit, pharma companies have been trying to stay above the political fray and stay focused on the science.
Karen: Yeah, right around the time when vaccines were getting really political — early Sept I believe — nine vaccine makers, all the major players in the COVID vaccine race — released a joint pledge to continue to make the safety and well-being of vaccinated individuals the top priority in their COVID vaccine development.
The media was quick to label the pledge as “historic,” and it really was. The pledge included a bulleted list of four specific promises, and was intended to provide reassurance to both health professionals and the general public that vaccine makers were committed to science and safety and were not going to cut corners.
Meagan: Right, which is a good transition for me to talk about what I think the industry has gotten right throughout this whole situation.
First of all, I love that the first company to get a vaccine approved was Pfizer, which did not take development funds from Operation Warp Speed. I liked it because I think that it showed how individual companies were willing to make massive at-risk investments in developing and manufacturing vaccines to end the pandemic.
It’s also worth noting that Pfizer has decided to bypass the government’s distribution channels and go it alone to get shipments of its vaccines out, and that it has created these new shipping containers to handle its ultra-cold vaccine that include real-time data tracking. And so, this really shows off the innovation happening right now in pharma.
Karen: Yeah, this is really one of the largest mass mobilizations in pharma’s history.
We are watching it unfold with Pfizer right now. Basically, every link in a complicated chain has to hold to pull this off. Like you said, Pfizer is leading the distribution of its own vaccine, as opposed to the Warp Speed vaccines that will be distributed by McKesson — the federal government’s appointed partner.
Meagan: Right and that’s an important distinction that I think it’s going to factor in when we look at how vaccines are priced.
Because first of all, any company that received massive investments from the government is going to be scrutinized hard when it comes to pricing — and we’ve already seen that.
And to their credit, pharma companies have been careful to either price their vaccines low or at the cost of production. In other words, they’re planning pricing them at non-profit levels, at least for now.
And to the government’s credit, they are supposedly planning to distribute vaccines to all Americans, along with some of these innovative treatments we’ve seen, for free.
But despite this, because the coronavirus is expected to be around for years potentially, pharma companies could still make out like gangbusters on these vaccines. Morgan Stanley, in fact, just recently projected that Pfizer and Moderna, alone, could pull in a combined $38 billion in sales for their vaccines — and that’s just in 2021.
I’ve seen predictions from analysts that put sales for the vaccines at blockbuster levels at least the next five years.
Karen: It’s my understanding that the first batches of vaccines from all of the companies in Operation Warp Speed, as well as Pfizer, will be covered by government contracts. These vaccines were pre-purchased by the government at a set price and will be given to the first in line -- health care workers, the people in long term care facilities – for free.
Of course, after government programs phase out, the vaccines will likely be pricier. But I think the industry is going to keep it within reason. I think I read, for example, that Moderna’s wholesale price to the U.S. government was $15 per dose, and Moderna estimated the vaccine will be sold for $32 to $37 per dose for regular customers.
Meagan: Yeah, and I believe those prices are right in line with what we expect from many vaccines such as the seasonal flu vaccine. But it’ll still be interesting to see how this pricing and profit dynamic impacts pharma’s reputation over the long run. Because on the one hand I think people understand that these companies need to recoup their R&D investments. But on the other hand, there’s something unsavory about making a lot of money off a pandemic.
Karen: Well, here’s the thing, when you’re in the business of making life-saving treatments, your profit is going to come from life-saving treatments – it’s the nature of the pharma business and I know that it doesn’t sit well with a lot of people. Personally, I don’t care how many millions of dollars Albert Bourla makes as long as his vaccine allows my 94-year-old grandma to leave the house without fear, right? At this point, name your price.
Also, we have to keep in mind that these mRNA vaccines are the first in history. This is an entirely new vaccine. We've never had a vaccine that worked in this same manner before.
Even during non-pandemic times, getting a vaccine like this approved would be huge, and a moneymaker.
Meagan: Right but again, the fact that major government investments have been involved in the development and manufacturing of these vaccines, I think sort of changes the dynamic of the conversation. And of course, because every move being made by pharma is suddenly being examined really closely, that means that the industry is going to be very exposed in an even more pronounced way to these kinds of discussions and potentially to these kinds of criticisms.
Of course, this is new for pharma — it’s just going to be happening on such a larger scale than usual.
But for me, long story short, I think pharma’s dealing with a mixed bag when it comes to its reputation amidst this Coronavirus pandemic. I think all of the scrutiny has some downsides for the industry. But at the same time, I think that if the public can overcome its vaccine skepticism and allow vaccines to get us out of this mess, I think there will be a lot of fresh gratitude for pharma companies.
I even saw a column a few weeks ago arguing that pharma companies should get a Nobel Prize for developing these vaccines so quickly. The author of this column acknowledged that there’s about a zero chance of this happening, given the for-profit nature of the industry. But I think it illustrates that attitudes towards pharma companies have likely shifted in a very big and meaningful way during this pandemic.
Karen, what’s your final takeaway?
Karen: I think any time you pull the curtain the back on an industry, you risk having people see things they don’t agree with and form opinions that aren’t favorable. But lack of transparency has been a big criticism of the pharma industry and they have done a lot to change that during this pandemic.
I don’t know about you, but watching the video of those first truckloads of vaccines leaving the Pfizer facility gave me hope. It’s been a long year for everyone and those vaccines are definitely something pharma should be proud of.
Meagan: Definitely. Well Karen, thanks for joining me to talk about what a wild year 2020 has been, and I look forward to reporting on it more with you in 2021.
Karen: Thanks for having me.
Meagan: You’ve been listening to Off Script: A Pharma Manufacturing Podcast. Stay healthy and safe everyone and stay informed. Happy New Year.