While the biotech sector has recently come under fire by politicians for price gouging, biotech CEOs say the conversation should focus less on placing blame and more on finding a proper balance in drug prices that allows for innovation and affordability.
GlaxoSmithKline CEO Sir Andrew Witty said Tuesday that despite possible concerns about patients not being able to access new medicine, the No. 1 driver for employees in the biotech industry is to find better treatments.
"What we need to do as an industry is work harder to work with other stakeholders including potentially members of government to make sure that pricing is sustainable, that we get a decent return for the risk that's taken on those drug discoveries. Those scientists get rewarded for all of the risk and hard work they did," he told CNBC's "Squawk Alley."
"But we also get the balance right to make sure that everyday people can afford these medicines. We need to do a better job at making sure that that conversation is going forward, it's progressive."
His comments were made shortly after Democratic candidate Bernie Sanders voted on Tuesday against President Barack Obama's choice to lead the Food and Drug Administration, citing concerns over the nominee's, Dr. Robert Califf, connection to the pharmaceutical industry.
"His extensive ties to the pharmaceutical industry give me no reason to believe that he would make the FDA work for ordinary Americans, rather than pharmaceutical industry CEOs who are more focused on making obscene profits than saving lives," Sanders said in a statement.
In response to this claim, Witty said that Sanders' "rhetoric" is not supported by the last six drugs launched in the United Sates by GSK, which were all set at the same or lower prices than the previous generation of medicines they were aiming to supersede. "We're delivering them at prices that I think send a message that we're not trying to simply maximize price," said Witty.
In another interview, Jean-Jacques Bienaimé, BioMarin Pharmaceutical chairman and CEO, stressed that his company also does not follow the business model of sharply increasing drug prices to turn a steep profit.
He told CNBC's "Power Lunch" on Tuesday that his company's drugs may already be at a high price point, but the strategy of increasing prices substantially is not something BioMarin has ever done or will do. "In the U.S., we have never increased the price of our drugs significantly above inflation level. Jacking up the price of a drug 10 percent, 20 percent a year is not in our business model," said Bienaimé.
Regeneron's president and CEO, Dr. Leonard Schleifer, similarly reiterated the importance of a pricing model that welcomes competition and balances incentives, risk and reward.
"If prices were to come down and upset that equation, that would be overall bad for the industry if the proper incentives aren't there," he told CNBC's "Squawk on the Street" on Tuesday. "On the other hand, we must price our drugs according to the value they deliver or there will be pricing pressure that's even worse."
