Biotech start-up seeks to make money by lowering drug prices
A NEW biotechnology company backed by some of Silicon Valley’s biggest investors thinks it can bring some relief from high drug prices.
The company, EQRx, is launching with the express purpose of developing medicines with prices as much as 66% lower than those of existing branded drugs. Led by a team of biotech insiders and backed by about $200 million in private funds, it has an ambitious agenda: to develop one drug in five years, and 10 in the next decade. It plans to work in costly areas like cancer and genetic disease.
Chief Executive Officer 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.
“We’re at this golden age, yet clearly something’s not right,” Mr. Borisy said. “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.”
Generic drugs can provide more affordable alternatives for some medications. But EQRx is focusing on the expensive brandname market, where drugs typically have patent protection and face less price competition.
It won’t be easy. The start-up will face challenges from the outset as it sets down the notoriously failure-ridden path of creating new drugs. It will also need to strike a balance between selling products at low prices and bringing in enough revenue and investment capital, while facing structural barriers in getting its drugs covered by healthinsurance plans.
“These folks are going to have to come out hopefully rapidly with a number of drugs and grow pretty quickly” to survive financially, said Steven Pearson, founder and president of the Institute for Clinical and Economic Review, an independent nonprofit that assesses the cost-effectiveness of medications. “But I certainly hope that they succeed.”