Amgen

Friday, May 28 visit to Amgen - Our last meeting of the day, but certainly one that sparked an interesting discussion. Ms. Dominique Debiais, Corporate Affairs Director, was kind enough to take time out of her incredibly busy day. She had received news that day that Prolia (denosumab) was approved for sale in the EU. Prolia is for patients that have bone loss conditions and was proven to increase bone mineral density. Our discussion included background on Amgen and the challenges the company faces, as well as information on the French health care system and lastly some information on drug pricing.

Background on Amgen
Amgen is a leading biotechnology company that was founded in 1980. EPOGen was one of the first durgs the company produced in 1983, it is used to treat anemia by increasing the production of red blood cells. The company has eight products on the market (Prolia is the ninth) and has been very successful. The challenges that Amgen faces are as follows:
- extremely high R&D costs, it takes between $600 million and $1 billion to bring a new drug to the market (this includes the cost of failed drugs).

- the drugs that Amgen manufactures are large molecules which are complex, unstable and can be difficult to duplicate (this means that good manufacturing practices are very important to be able to replicate the product).

- 90% of projects never reach the market.

- strategic location selection for conducting clinical trials.

- threat of generic brands entering the market.

French Health Care System
France has a social security system which includes retirement, unemployment and healthcare. The system was created in 1946, however it has amounted to a deficit of approximately 9 billion euro. Despite the deficit, Ms. Debiais believes the coverage provided by the French government is wonderful. The care is free and the outcomes are very good in comparison with other countries. Aside from the debt, the other draw back is that this system does not provide much preventative care, however she believes it is still very efficient. Coverage seemlessly continues within the EU member states when traveling.

This part of the discussion led to interesting questions about the care within the US. Based on Ms. Debiais' slides, France spent ~ 10% of GDP on healthcare in 2003, while the US spent ~ 15%. How can the percentage of spending be so large when the quality of care in the US is not as efficient? Has the recent healthcare reform really changed the system or is it just contributing to a higher percentage spent on healthcare? One side of the argument is that universal coverage in the US did not address the issue at hand which is how to fix the major inefficiencies within the healthcare system. What is the role of insurance companies and how can a single payer help the system?

Drug Pricing
The EU law prohibits direct to consumer marketing for prescription drugs and does a good job controlling this issue. The over all price of drugs is much lower in the EU than in the US because of the way the healthcare system is set up. In France the price is very transparent.

Unfortunately we ran out of time and were unable to obtain more detail on the pricing.