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Baker says high drug prices are fueling discontent

Governor Charlie Baker addressed the Massachusetts Biotechnology Council’s annual meeting Thursday in Cambridge.
Governor Charlie Baker addressed the Massachusetts Biotechnology Council’s annual meeting Thursday in Cambridge.Josh Reynolds for The Boston Globe

CAMBRIDGE — Governor Charlie Baker told a big biotech gathering on Thursday that rising drug prices were contributing to the wave of public discontent shaping the presidential campaign.

Much of the governor’s address to the Massachusetts Biotechnology Council’s annual meeting was devoted to reassuring executives about his commitment to the industry. But Baker also cited a poll showing most Americans believe the country is heading in the wrong direction, saying the costs of health care and higher education are partly behind the disillusionment.

“The price of drugs has gone up pretty significantly,” he said.

Industry leaders, meanwhile, pledged to counter what one called “political demagoguery” by highlighting breakthrough therapies that are curing diseases and shaping a shift to value-based pricing, which ties the cost of a treatment to the health outcome for patients.


In an interview after his address, Baker, a former chief executive of health insurer Harvard Pilgrim Health Care, said he wanted to be part of an emerging public dialogue about how to price medicines that are expensive but often save the health care system money in the long term.

“There’s a value-based conversation to be had,” said the governor, who was sporting a buzz cut after taking part in a fund-raiser in which people shaved their heads in solidarity with cancer patients.

That conversation was already underway at the opening of the two-day MassBio meeting, which drew more than 450 executives to the Royal Sonesta Hotel. Some industry leaders bristled at what they said were efforts by politicians, including presidential candidates, to arbitrarily cap the prices of life-saving therapies and to demonize companies that develop the medicines.

“The headwinds create opportunities” for the biotech industry to explain itself to the public, said MassBio president Robert Coughlin. “Bring it on. We can’t lose this argument, so let’s get together and kick some butt.”


John Maraganore, chief executive of Alnylam Pharmaceuticals Inc. of Cambridge, alluded to “political demagoguery” and gave a full-throated defense of the industry.

“We need to focus on the value of our medicines and the access of these medicines to all patients,” said Maraganore. “We also need to remind the public that the medicines we pay for today are free for our children and our children’s children” when they come off patent and lower-priced generic versions become available.

Earlier, Baker cautioned that the prices of generic drugs — which he said accounted for about 70 percent of all subscriptions — are seeing some of the fastest increases.

An afternoon panel at MassBio focused mostly on efforts to set new pricing models for the specialty therapies — targeted at smaller sets of patients with specific genetic mutations — that are being developed by many of the companies in the state’s biotech cluster.

While no industry critics were invited to address the group, Peter Neumann, director of the Center for the Evaluation of Value & Risk in Health at Tufts Medical Center, offered some advice to drug makers: “If people in this room want to command a premium price, you have to demonstrate value.”

The government does not set drug prices in the United States, unlike other countries, Neumann said. But he said a number of private organizations — ranging from the American Society of Clinical Oncology to Memorial Sloan Kettering Cancer Center in New York to the Boston-based Institute for Clinical and Economic Review — are stepping in to propose “drug value frameworks” for tying prices to how well medicines work. This process is evolving, and there is no consensus on how to account for price variations in different countries or the reality that most drugs benefit some patients more than others.


Katrine Bosley, chief executive of Editas Medicine Inc. in Cambridge, said many drug developers may be working on treatments for rare diseases in part because they feel they cannot get the reimbursement from medicines like vaccines and antibiotics that would enable them to recoup development costs.

“There is a tension between health care costs and the imperative to innovate,” Bosley said.

Pointing to drugs that have cured once life-threatening diseases such as the hepatitis C virus, Bosley lamented that the drugs are mainly known for their price tags rather than how much money they save by keeping patients out of the hospital.

“We in the industry have to own that we’re not handing the discussion right,” she said.

Baker avoided criticizing the biopharma industry. Instead he cited its role as an engine of the Massachusetts economy and said his administration will work to expand the industry by focusing on workforce training, improving infrastructure, and collaborating with private investors and the federal government.

“The crown jewel that you’ve created is something we don’t want to just nurture,” Baker said. “It’s something we want to grow and do great things with.”

Baker said Travis McCready, the new president of the Massachusetts Life Sciences Center, is working to plan its “second act” after its initial run under former governor Deval Patrick.


“This guy is really thinking hard about this stuff,” the governor said of McCready. “The next act should reflect not the old game but where the new one is going.”

Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.