'By hook or by crook': BIO CEO urges biotechs to be flexible on funding to survive tough times

Rachel King said few things would bring her out of retirement. Leading the Biotechnology Innovation Organization—the largest biotech trade association in the world—just happened to be one of those things. 

Rachel King
Rachel King (BIO)

After nearly a year, King's reign as CEO is likely coming to a close, the interim BIO leader explained at the Fierce Biotech Summit early last week. The organization is actively conducting a search for a permanent successor, she told Fierce Biotech. 

The co-founder and former CEO of glycobiology-focused GlycoMimetics has guided BIO since November 2022, a longer shift than King had initially expected. Already a member of BIO’s board of directors, she was tapped for the top job after previous CEO Michelle McMurry-Heath, M.D., resigned in the days following a report that detailed clashes between McMurry-Heath and the board. 

It means that King has led the advocacy organization for the majority of 2023, a rocky year for the industry that has seen chilly IPO waters persist against a backdrop of industrywide layoffs, with smaller biotechs hit particularly hard.  

Despite the challenges, King said she holds a “data-driven optimism” about the sector, adding that being part of the industry requires a long-term perspective.

“We're not looking for the short term,” she said. “We recognize that things will take a long time and recognize they're going to take a lot of risk.”

Given her long-term lens, King urges biotechs to do whatever they can to hang on.

“In my own career, I've lived through a lot of highs and lows,” she told Fierce. “Companies need to find ways—by hook or by crook—somehow to persevere.”

Biotechs should “cast their nets as widely as possible in terms of access to capital and partnering,” such as considering alternative financing forms like grants and equity debt, the CEO suggested.

In efforts to galvanize biotech and keep innovation on track, BIO is currently pushing back on certain aspects of the Inflation Reduction Act (IRA), which many industry players have voiced concern over. The sweeping federal legislation signed by President Joe Biden last year limits out-of-pocket prescription drug costs for Medicare patients at $2,000 a year—a provision the sector has no problem with.

Instead, the main worry is that pharmaceutical cost savings now will slow the development of future medicines. At issue are the drug pricing reforms, which will let the federal government negotiate prices of dozens of drugs for Medicare part D and part B starting in 2026.

Big Pharma and biotech alike are arguing that pharmacy benefit managers (PBMs)—middlemen that negotiate drug prices on behalf of insurance companies, Medicare plans and large companies—swallow rebates and drive up drug prices.

“If you look at the amount of reward for innovation that goes to the innovator versus the amount of reward for innovation that goes to the middleman, an increasing share is going to the middle,” King said. “We really want to incentivize risky investments that yield innovation, not the middlemen.”

Both investors and company CEOs will make rational decisions based on the incentives instituted, King said, highlighting the importance of what the IRA incentivizes.     

BIO is advocating for PBM transparency rather than accountability, King explained, which means less of a reward for the PBMs, something that would hopefully translate into lower prices for patients. 

While the advocate organization is currently in the early stages of work with Congress to revise parts of the IRA, progress has been stymied by political divisiveness, according to King.

Though she’s still hopeful that agreements can be reached to shape more biotech-beneficial policies, King said it will take a lot of work to get there, especially “when we're trying to get people across the aisle to work together.”

The leader hopes for “a resurgence of moderates in both parties,” so innovation for patients can continue to flourish uninterrupted.