President's Inaugural Address

President’s Inaugural Address
International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) 26th IFPMA Assembly

John C. Lechleiter, Ph.D.

Chairman, President and Chief Executive Officer — Eli Lilly and Company

October 31, 2012

Geneva, Switzerland

Thank you, Eduardo, and good afternoon, everyone.

I want to begin by acknowledging my predecessors, Mr. Nogimori along with David Brennan, for their strong leadership of IFPMA during a very challenging couple of years – with a number of significant issues to deal with. David was also a driving force behind updating our Code of Practice and a powerful voice on the importance of building trust between our member companies, associations, and all those we interact with.

I also want to thank Eduardo Pisani and our IFPMA staff and all the member company and association staff who have organized this meeting and who give voice to the importance of innovative medicines for patients the world over.

I am honored to represent IFPMA and to assume this office in the company of so many friends and colleagues who represent the patients we seek to serve. I bring the perspective of a scientist who has spent my entire career at one company in pursuit of pharmaceutical innovation to help people live longer, healthier lives.

I will continue to champion medical innovation and the collaborative efforts that are improving health for millions of people around the world and help ensure that all the companies and organizations represented here today can carry on the heroic work of healing and saving lives well into the future – with more and more patients having access to the medicines they need.

To succeed, we’ll need all of us – the IFPMA, our member companies, our trade associations, and so many others in this room today who understand the critical importance of our work,

  1. to stand up for policies that support and encourage innovation;
  2. to continue to build trust with all our stakeholders;
  3. and to continue to work for solutions through collaborations that offer the most effective approach to solving complex global health problems.

Despite the diversity among this audience, we all share a common mission of providing healing and health to people around the world and the conviction that medical innovation, the right expertise, and a passion for making a difference – regardless of the obstacles – are among the most powerful levers for making that happen.

It bears repeating that medical innovation in the past century transformed the basic expectations of human life that had prevailed since the dawn of civilization. Tens of millions of death sentences were lifted and once dread diseases were cured or became manageable chronic conditions.

In developed countries, we’ve seen dramatic declines in mortality rates for major killers such as heart disease and cancer.

But the impact of medical innovation is equally profound throughout the world.

Since 1928, scientists have discovered and developed 19 classes of antibiotics, leading to the treatment and cure of a myriad of infections and saving more than 200 million lives. Lilly is proud of our contributions in this area, having pioneered two of those classes, the macrolides and cephalosporins.

In the past decade alone, vaccines for measles, polio, and DPT have saved the lives of an estimated 2½ million children under the age of five each year. Between 2000 and 2006, immunization campaigns cut the number of deaths caused by measles by 68 percent worldwide and 91 percent in Africa.

Furthermore, between 2000 and 2009, infant mortality fell from 77 deaths per 1,000 births to 62 – a reduction of 20 percent.

Innovative pharmaceuticals have also led to a dramatic decline in death rates for HIV/AIDS and have brought us ever so close to our goal of finally eradicating polio from the planet.

For all of these individual advances, the cumulative impact of medical innovation is nothing short of mind-boggling.

One fundamental measure is life span.

While there is great variation among countries, if we take the entire world into account, a child born in 1955 had an average life expectancy at birth of only 48 years. In 2000, a child could expect to live 66 years. By 2025, life expectancy is predicted to rise to 73 years. That’s an increase of more than 50 percent in less than a century – unprecedented in human history. And developing countries are seeing the most rapid gains.

Innovative medicines are a big reason we’ve gained these extra decades. An analysis by Columbia University Professor Frank Lichtenberg found that the launches of new medicines accounted for 40 percent of the increase in life expectancy during the 1980s and 1990s in 52 developed and developing countries. That’s five months of every additional year.

If the sole impact of biopharmaceutical innovations was additional decades of life and health, we’d be hard-pressed to find their equals. But the economic payback from these gains is also difficult to overstate. The payback is years of productive work, economic value added, consumer spending, and taxes paid – which together outweigh the costs of treatment overwhelmingly, even if you resist putting a number on the intrinsic value of being alive!

And there’s a growing body of evidence that suggests in developing countries, that, in fact, health does not follow wealth – it’s the other way around. The 2001 report by the WHO Commission on Macroeconomics and Health concludes that health is a creator and pre-requisite of development. The Commission underscored that extending the coverage of health services and a small number of critical interventions to the world’s poor could save millions of lives, reduce poverty, spur economic development, and promote global security.

And there’s also compelling evidence that innovative medicines comprise the most cost-effective part of health care.

One of many examples is another study by Professor Lichtenberg that found that for every $1 spent on new medicines for cardiovascular diseases in OECD countries nearly $4 were saved in hospitalization and other healthcare costs.

When one takes into account both the health and economic benefits of innovative medicines, one is again hard pressed to find their equals.

Because of our historic track record of innovation, some may take ongoing progress for granted, or think we have all the innovation we need. But we must build upon – not rest upon – the contributions of the past. For all our tremendous progress, much, much more remains to be done.

We need ongoing innovation to tackle diseases that range from those that come with little warning – such as the H1N1 virus – to infections caused by resistant microorganisms to those associated with people living longer and longer – like cancer and Alzheimer’s, to name a few. Without new breakthroughs, we risk a human and economic catastrophe.

We’ve already talked in this meeting how the combination of longer lives, decreased infant mortality, and changing lifestyles has led to an explosion of non-communicable diseases – NCDs – including heart disease, cancer, chronic respiratory diseases and diabetes.

The impact is no longer just on developed countries – we know that NCDs are currently the leading causes of death worldwide. They now account for 60 percent of all premature deaths around the world and it’s estimated that by 2030, over 80 percent of premature deaths from NCDs will be in low- and middle-income countries.

Let’s face it: to make further inroads against these and other conditions, we must sustain medical innovation!

The good news is that advances in the life sciences are bringing treatments once beyond our reach finally into view.

Today, the biopharmaceutical industry has in some stage of clinical development:

  • Nearly 900 potential medicines for cancer;
  • More than 200 potential medicines for cardiovascular disorders … and nearly 200 for diabetes;
  • 80 potential medicines for HIV/AIDS;
  • and about 300 for rare diseases.

As a scientist myself, I believe that the juxtaposition of new insights into human biology, coupled with the application of new tools and advanced technologies, has the potential to revolutionize our business more in the next decade or two than in the past 5!

That is – if we don’t stop the revolution in its tracks!

As we know, the bar for innovative medicines is rising inexorably higher.

  • Many of the diseases we’re tackling have defied treatment throughout human history.
  • Development costs per drug have skyrocketed and, with the exception of 2011, new drug approvals have trended downwards, not upwards.
  • In the five-year period from 2006 to 2010, there were 151 new medicines launched globally – down from 211 in the five-year period a decade earlier – that’s a 30 percent decline.
  • And we’re in the midst of a five-year period when some $150 billion of branded pharmaceutical products lose patent protection. This is great news for consumers but translates into $150 billion less annual revenue to invest in R&D.

Partly as a result of these forces, over the past 20 years, 26 major independent pharma companies have consolidated into nine.

So, here is our challenge: What can we do to ensure we sustain the innovation required to conquer diseases and maintain the trajectory of longer, healthier lives while at the same time addressing the many problems that must be solved to expand access to quality health care for the large percentage of the world’s population without it today.

As to the innovation side of the equation: when it comes to health care policy, we need to speak up for policies that sustain and encourage innovation and against those that would undermine it.

What I call an “ecosystem” of innovation has several important elements – among them sound intellectual property protection and a regulatory system that keeps pace with 21st century science.

And when we see them under attack, we need to stand our ground and call out the potential consequences.

For example, the work of innovation is not possible and cannot be sustained without I.P. protection, which is the lifeblood of any enterprise creating value from ideas. On average, it takes nearly 14 years and one billion euros to bring a new medicine from the drawing board to the pharmacy. Without the ability to protect one’s intellectual property, medical innovation would not be sustainable.

And the benefits of I.P. protection include not only breakthrough medicines, but, over time, a broad range of low-priced generic medicines, which are an important legacy of innovation.

In addition, given the enormous investments necessary to develop new medicines, we need predictability and certainty in the regulatory process that will play a large part in determining when and whether those new medicines will ever reach patients.

Ultimately, we need to ensure that regulatory processes the world over are timely, predictable, consistent, transparent, and scientifically rigorous.

So, we have a key role – a responsibility – in helping people appreciate the incredible value of medical innovation and its profound impact on individuals and on society. And we need to do a better job of getting our story out and making our case with force and frequency.

But, if we’re to be seen as credible advocates, we must do more: we must live out our values and continue to build trust in our industry and in what we do.

Let’s face it – trust is a hard commodity to gain and an easy one to lose. The Edelman public relations company recently issued its 12th yearly study of public trust in a number of public and private institutions. They called this year’s report: “Trust on the Brink.” It found barely half of people surveyed said they could trust business to do the right thing.

So it is more important than ever that we rebuild that trust. And a good place to start is our expanded IFPMA Code of Practice we’ve developed on:

  • interactions with healthcare professionals, medical institutions and patient organizations;
  • promotional activities;
  • disclosure of clinical trial information;
  • continuing medical education;
  • and employee training.

All of these require that we:

  • hold ourselves to the highest ethical standards;
  • provide useful information and educate about both the benefits and risks of our products;
  • remain constantly vigilant about product safety;
  • and be transparent about our business practices.

Our Code is important, and I believe it has already helped improve our industry’s image and our standing. For it to remain effective, all of us need to be diligent in following not only the letter but the spirit of the Code.

As David Brennan has said, “This is not about doing the easy thing, but the right thing.”

Advocating for an environment that will enable us to sustain innovation and building trust among our key constituents are very important goals, but by themselves insufficient to solving complex, tenacious global health issues.

Making inroads against these problems also requires, as I stated this morning, an unprecedented degree of global cooperation.

Now, I admit that it has been said by some that our industry has tended to equate what is best for patients with what is in its own self-interest. Yet all my 33 years experience and my position as the CEO of a large research-based pharmaceutical company tells me this is not so: We believe our work is a mission – a mission to constantly improve treatments that can enhance, and even save, the lives of real human beings the world over.

So we must continue to put our best foot forward when it comes to using our ingenuity and resources to make our innovative medicines available to patients more broadly: to find ways to serve better those:

  • who do not have access to quality health care delivery systems;
  • who live where there is a shortage of health care professionals or where drug supply chains break down;
  • who are inhibited by stigma from seeking treatment;
  • or who could not afford our medicines even if they were otherwise available to them.

Of course, our member companies have many programs and partnerships – and collectively spend billions of dollars – to provide medicines to the underserved around the world. But we have a long way to go to be a trusted and welcomed solution partner with governments, NGOs and others in developing and implementing systemic reforms that will enable much broader access to quality health care.

IFPMA is well positioned to take a leadership role in the area of sustainable health care systems - and we must seize the opportunity!

So we must recommit ourselves to the broad public, private, and civil collaborations that have proven to be the most efficient and effective way of tackling these problems. We have a long track record of working to address unmet medical needs through partnerships – whether in R&D, capacity building, training, or technology transfer.

Tapping into the expertise and contributions of the global health community – nurses, doctors, governments, foundations, NGOs, academic institutions, and industry – has dramatically increased access to quality care and medicines, reaching the farthest corners of the world with life-saving treatment and care.

Now, we’re focusing more attention on addressing the growing burden of non-communicable diseases in low- and middle-income countries I talked about earlier.

For example, of some 3,000 compounds in industry pipelines to treat a range of debilitating diseases, about half target NCDs. Many efforts are focused on providing patients with treatments that are more effective and convenient to use – all with the goal of improving chances of healthier lives.

IFPMA members are also actively engaged in more than 200 partnerships aimed at addressing these diseases – providing support, education, training, awareness, screening, capacity building, and access to communities in need.

I’m proud that Lilly last year began a $30 million, five-year NCD Partnership designed to research new and comprehensive approaches to treat NCDs in Brazil, India, Mexico and South Africa.

This is just one of many examples of how IFPMA and its member organizations are making a difference to people around the world. We should be proud of the tremendous progress we’ve seen. I encourage all of us to keep up our efforts.

Several months ago, a Lilly colleague sent out an email telling her Lilly teammates that she had been diagnosed with acute myelogenous leukemia.

She said not to worry about her, but she did have a request. She wrote:

“Here is what I want from you: in addition to going home and appreciating your family and loved ones more than ever, I want you to do your jobs.”

I can think of no better tribute to our colleague than for all of us to “do our jobs” –

  • to stand united in championing the importance of medical innovation and to stand up for the policies that foster innovation;
  • to continue to build trust in the IFPMA and its member institutions and the good work that we do by earning that trust; and
  • to continue the effective collaborations that offer the best hope for addressing diseases that rob too many people of years and productive lives.

I appreciate so much the honor – and it is an honor and a privilege – of representing a group of people who devote their lives to alleviating suffering, inspiring hope, and providing additional years of precious life to millions of people around the world.

I promise to do my best to help ensure that IFPMA remains a valued strategic partner in our collective efforts to improve global health.

Thank you ever so much.

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