MAKING A MARK
‘Differential Pricing Won’t Work For Us’

Genzyme Chairman, President & CEO Henri Termeer spoke to BW in a recent interview. Excerpts:

In which countries have governments stepped in to pay for patients whom Genzyme has treated free with its enzyme therapies?
It has worked in numerous places — in Russia, in smaller countries such as Croatia and Poland. Sometimes it has taken years, depending on the circumstances. The Chinese are very interested in our products, technologies and gene therapy. We will be making investments around innovation in China. But we are also making them aware that we are treating Chinese patients free of cost for 10 years. They know that it cannot go on forever because markets drive investments, and not charity unfortunately. Now it is a matter of building consistent support for these patients. I am very confident that it will work in China and India.

What about differential pricing? Can it be made to work?
It would be probably difficult for these products. These are very expensive therapies, and very rare diseases. It is very difficult to arrive at differential pricing based on GNP (gross national product), because it never stops. It is simpler to say ‘this is how we do it, help us with it’. We will treat the disease around the world, set up the registries and ways to follow the therapy and its success. I would say that there are many (healthcare) challenges in the world where this would be a good way to think about it. In HIV, for instance. There is a component where you can commercialise and one where you cannot. When you only serve one side, you lose importance because people look at both sides. The pharma industry have had a hard time on this. They have sometimes taken positions that were too narrow, too parochial and they lost global respect.

In your home market, the price of Cerezyme has been questioned for a while.
In 15 years, we never increased the price. It’s just recently that we had a small price increase for inflation. We invested the money in two ways, in the free-of-charge and in developing additional therapeutic options for three other diseases that had nothing. We have made large investments in those other disease areas. I see our responsibility as two-fold — the most important is to continue to innovate, find treatments for patients that cannot be treated, and therapy options. As soon as we lose the courage to do that, become very risk averse and want to do more incremental things, I think we have lost our reason to be. The second is if we have a discovery, say, in multiple sclerosis which is useful, (it turns) from opportunity to responsibility. We have to roll it out, and do whatever it takes. If we hesitate because we cannot find the resources, then again we lose our footing.

gauri dot kamath at abp dot in

(Businessworld Issue 27 Jan-02 Feb 2009)