乌鸦传媒

Several years ago, I found myself in the office of the CEO of a major pharmaceutical company. These kinds of meetings are very rare. The last thing a CEO wants to do is to meet with a clinical investigator.

Companies have many people whose job it is to talk to folks like me.

The CEO is not one of them.

But this meeting was not about medicine or science; it was about money.

The CEO had to make the final decision about the price of a new drug. His vice-presidents were recommending a price that I thought was too high. So I requested a meeting with the CEO. I wanted him to cut the price by 70%.

If the price were reasonable, more people who needed the drug would have access to it. If the price were low, payers would place fewer obstacles in the path of those wanting to prescribe it.

I wanted people to benefit from the drug, because I had led the major clinical trial that had demonstrated its benefits.

This was not a discussion about ethics. Companies have a fiduciary responsibility to make a profit. They are delighted to make drugs that save lives. But they are really happy if saving lives means making money. That is the CEO's primary job.

I argued that the company would make more money if they lowered the price of the new drug. If it sold for $6000 a year, only 200,000 people would use it, because payers would block access. But if it sold for $2000 a year, 2 million people would receive it.

My argument: the company would make more money if the price were low. I was not there to talk about morality.

The CEO was an amazingly likeable person. He was really smart, made clear-headed decisions rapidly, and had great people skills. No one becomes the CEO of a major pharmaceutical company without these talents.

So he understood my argument within a few minutes. And he agreed with me.

But he said: "Milton, you are absolutely right. But I can't follow your advice." I was stunned. I asked why.

The CEO continued: "You see, I don't determine the price of this drug. There is a financial analyst in London who is looking closely at what I am going to decide. This analyst already assumes that 1 million people are going to receive the new drug. If I price the drug at $2000, that means $2 billion in revenue. If I price the drug at $6000, that means $6 billion in revenue."

Now he looked sad. "The problem is that our stock price is already based on the assumption that this new drug will generate $6 billion annually. That may be ridiculously optimistic, but that is what the financial analysts are saying. If my pricing decision leads them to project lower revenues, they will downgrade the company's stock. As CEO, I can't let that happen. So the price is $6000. That will make the analysts happy."

I tried to argue, but I would not prevail. The CEO was a prisoner of the financial markets, and there was nothing I could do to free him.

As I walked out of the office, I knew that there was one person in the world who was happy with the meeting. She was 28 years old and worked for a prestigious financial services firm in the City of London. I had never met her and never would. But she had just ruined my dreams and the lives of millions of people.

And sad to say, she was just doing her job.

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