GSK exits BIO

On October 8, 2024, Endpoints News reported that GSK would exit BIO (Biotechnology Innovation Organization). The news was confirmed by a GSK spokesperson, who stated that GSK remains a member of PhRMA (Pharmaceutical Research and Manufacturers of America), the industry association representing large pharmaceutical companies.

To better understand this move, it's necessary to briefly understand the functions of the two major organizations, BIO and PhRMA.

Starting with PhRMA, formerly known as the "Pharmaceutical Manufacturers Association" (PMA), it was jointly founded in 1958 by pharmaceutical companies such as Parke-Davis, Pfizer, Merck, American Cyanamid, and Johnson & Johnson. In 1994, it was renamed "Pharmaceutical Research and Manufacturers of America" (PhRMA), with its original intention being lobbying.

Mainly composed of large pharmaceutical companies, PhRMA's lobbying focuses on traditional pharmaceutical industry issues such as drug pricing, health insurance coverage, and intellectual property protection, with lobbying activities concentrated on policy lobbying and public advocacy.

BIO, established later than PhRMA in 1993, has essentially the same function as PhRMA, which is lobbying. However, BIO has a broader membership base, including many start-up Biotech companies, and its lobbying direction tends to be more supportive of members, including financing advice, market access guidance, legal consultation, etc., with a greater emphasis on the cutting-edge fields of biotechnology.

GSK's exit from BIO is a further blow to the aforementioned lobbying organizations. Since last December, several large pharmaceutical companies have announced their exit from BIO, including Pfizer, UCB, Takeda, and WuXi AppTec, which voluntarily terminated its BIO membership in March 2024.

Similarly, in PhRMA, large pharmaceutical companies such as AbbVie, Teva, and AstraZeneca have also successively exited this year.

The "exodus" can be simply understood as a decline in the lobbying power of these organizations. The original intention of establishing these organizations was to lobby the federal government to support industry development and protect the interests of members.

In 2017, BIO lobbied the federal government on issues such as drug imports, Medicare Part D, the 340B drug discount program, and orphan drugs for rare diseases, spending over $9.3 million. From 2019 to 2022, the expenditure further expanded, with an annual spend of $12-13 million.

However, with the signing of the Inflation Reduction Act (IRA) by the Biden administration in August 2022, drug prices faced unprecedented challenges, and BIO and PhRMA successively appealed, but still failed to prevent government intervention in drug prices despite high investment.

This has directly led to the exit of major pharmaceutical companies, giving a sense of "paying money but not getting things done".

In addition, amidst the turmoil caused by the "Biosecurity Act", WuXi AppTec, as a BIO member, experienced two completely different attitudes from BIO before and after. Faced with congressional pressure, BIO not only failed to maintain its position and protect the interests of its members but also did not announce the cancellation of WuXi AppTec's membership. This move, to other members, at the very least, has damaged the organization's credibility.

In terms of external factors, with the Trump administration possibly returning, the IRA may not be expanded, and even might be demoted due to financing considerations. The benefits that lobbying organizations can bring may further decrease.

Lobbying organizations have always served pharmaceutical companies (members), representing the main channels for members to influence policymakers on issues such as taxation and regulation.

Now that the U.S. election has ended, previously enacted laws will undergo changes in implementation, and market competition patterns will change accordingly. Members may need to reassess their positions within industry organizations. As a GSK spokesperson stated in a declaration, "At present, we believe there are other areas where we can focus our resources."

【Editor’s note】The above content (~3735 words) is a quick translation of a Chinese article (posted on 2024-11-09) by DrugTimes team. To read the original article, please click here . All comments are warmly welcome. Many thanks!