Backed by $200 million in Series A financing, a biotechnology startup dubbed EQRx announced yesterday it intends to do to Big Pharma what Jet Blue and Southwest did to the airline industry: dramatically undercut prevailing prices.
Chairman and CEO “Alexis Borisy said he saw a disconnect between the innovative new medications that are now available and the financial hardships facing patients. About 24% of Americans report trouble affording their prescription drugs, according to the Kaiser Family Foundation, and financial stress is especially acute for those with diseases like cancer,” writes Emma Court for BloombergQuint.
“We’re at this golden age, yet clearly something’s not right,” Borisy tells Court. “We think we can create new drugs and bring them to people in need in a way that society can afford in a sustainable manner.”
“EQRx will focus on medicines still protected by patents; Borisy and his team aren’t planning to develop generic drugs or biosimilars (he calls the company’s future drugs ‘equivalars’). He wouldn’t name specific drugs they plan to undercut, but said the company will take aim at products introduced over about the last five years, or which will hit the market in the next five. The goal is to get 10 drugs approved over the next decade,” writes CNBC’s Meg Tirrell.
“And their planned prices? A fraction of those of competitor medicines, Borisy said -- about one-third to one-fifth of price tags now,” Tirrell adds.
The Wall Street Journal’s Joseph Walker refers to “equivalars” as “me too” drugs -- “industry jargon for medicines that emulate the biological function of existing drugs but have molecular structures distinct enough to avoid infringing patents of drugs on the market while they earn their own patent protection. Drugmakers have sold ‘me too’ drugs for decades but have typically sold them at prices similar to competitors.”
“The goal is to bring market-based competition and pricing elasticity into the pharma market, much like budget airlines did in their industry: ‘With JetBlue and Southwest, the legacy carriers had to merge and figure out ways to be more efficient,’ Borisy said,” writes Amirah Al Idrus for FierceBiotech.
“If all goes to plan, the equivalars will help the market settle on lower prices. If a drug developer is selling its drug at a reasonable price, EQRx’s copy will be following a more established medicine to market and should end up with just ‘modest share,’ Borisy said. But if the company is selling its drug at too high a price, the equivalar should take over its market share,” Al Idrus adds.
“Borisy, 47, is a fixture in Boston biotech, known for his striking felt fedoras. He co-founded Foundation Medicine and Blueprint Medicines, both of them based in Cambridge, Mass., and focused, in different ways, on using genetics to treat cancer -- the kind of approach that has produced remarkable outcomes but also driven up the price of drugs,” Matthew Herper observes for Stat.
“I’ve spent the last 25 years creating breakthrough new medicines,” Borisy tells Herper. “We’ve ratcheted up the prices on them ever higher, frankly, because we can,” he said. “And the reality is we can create a lot of these great new medicines, and turn that into a viable business charging a lot less for them. This is not fantasy world. This is something that can be done.”
“The drug industry is bracing for potential pricing regulations from Washington, either this year or after the presidential election, because of popular outrage over costs. Price inflation for drugs has slowed in recent years under the threat of new regulations, but expensive brand-name drugs remain unaffordable for some patients,” the WSJ’s Walker points out.
“Soaring drug prices have become an election issue in the U.S., as both Donald Trump, president, and Democratic presidential candidates rail against drugmakers in an effort to appeal to voters. But drug prices were already an important campaign issue in 2016, and neither side of the political divide has managed to push through any significant regulatory changes since then,” Hannah Kuchler writes for Financial Times.
“Mr. Borisy says that the company could be a ‘market-based solution’ to this problem, offering a more effective alternative than the ‘really thick mallet’ that could be used by the government and destroy any incentives to make new drugs. ‘We see this as a fundamentally capitalistic enterprise. A business with a very, very nice rate of return,’ he said,” Kuchler continues.
Peter Bach, M.D., director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center, is co-founder of EQRx. Melanie Nallicheri, former chief business officer and head of biopharma for Foundation Medicine and senior vice president at McKesson Distribution Solutions, will be president and COO.