John Martin - Gilead Sciences

Pushing the envelope on pricing, and setting the pace as a global competitor

Name: John Martin
Title: CEO, Gilead Sciences

John Martin and Gilead ($GILD) aren't new to pricing controversies. But in establishing the wholesale cost for the company's new hep C drug and its combo follow-up at jaw-dropping prices, the CEO helped inspire a fierce payer backlash in the U.S. last year that will shape negotiations for all manufacturers for years to come. And they struck an innovative marketing approach beyond U.S. borders that should prove equally influential globally.

Gilead and Martin were natural leaders in the field of premium pricing. The biotech was already used to the tempests it could help foment with high prices on its market-dominating HIV drugs, a strategy that continues to this day as it hikes the price on Stribild. The hep C pricing on Sovaldi and Harvoni are essentially an extension of that strategy: Develop an antiviral that works well, put a premium price on it and back up the product when critics attack.

But this time the company was targeting a huge market niche, a fact that didn't escape activist groups like Doctors Without Borders, state governments, Medicaid, and physician groups as well as insurers and pharmacy benefit managers. That's a fact that certainly didn't escape Express Scripts' ($ESRX) Steve Miller, another top influential this year. Nobody wanted to pay for the drugs, but their remarkable efficacy made it an early standard, relegating drugs that once dominated treatment methods to the pharmacy dumpster.

Martin doesn't apologize for his pricing strategy, and he doesn't get stuck on neutral. Once AbbVie ($ABBV) came along with a rival, he helped direct a counterattack that managed to pull off a slate of new deals even bigger than the challenger's. And he executed a Q1 this year that dumbfounded most analysts.

Notch up another influential market strategy for Gilead for its ability to stay flexible.

In the poorest countries, Gilead has essentially handed over its brand-new drug to generics makers for them to sell cheap copies. That extraordinary flexibility helped circumvent the inevitable patent pushback and compulsory licensing that it would have seen otherwise, and helped muffle the kind of criticism that would have been amplified in the more affluent world--which should also guide the industry.

Despite all the criticism, and despite the naysayers, Gilead's approach to the field vaulted the company into the ranks of the top 10 global players, pushing past a struggling Eli Lilly ($LLY) and a more contained Bristol-Myers ($BMY). None of that would have happened unless Martin had set out to make Gilead into a global player. He has succeeded in ways few people could have predicted.

-- Tracy Staton (email | Twitter) and John Carroll (email | Twitter)

For more:
Prepping for spendy launches, pharma execs take a hint from Gilead's pricing fight
Gilead ready to take the cash from hep C superstars and buy something
Gilead's 'open to suggestion' on its next big M&A splash

John Martin - Gilead Sciences

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