Aug 7, 2026 · 24 min · 14 segments
As large pharma companies increasingly turn to China to fill their pipelines, what long-term affect will it have on their strategy and operations? Pfizer's Andrew Baum shares the large drugmaker…
I think there's a broader conversation about, and this really comes back to some of the topics raised earlier, about why has pharma prosecuted the same targets and the same crowding, and there's been limited innovation.
Um, part of that has been because of the rebate wall, which has enabled companies with a lead franchise and incentivized them to just come up with the next molecule, roll it, roll it.
Um, but when you think about, you know, what is gonna happen, my prediction will be that with the impact of FTC settlements and then with the predik- the, uh, impact of, uh, uh, PBM reform, you're gonna see shorter and shorter product cycles because you're not gonna have that rebate wall.
So companies are gonna be forced to take more risk with more unvalidated targets, and therefore, this feeds into all the discussion that we had in the previous question.
I-- You know, you've been sitting here in the front row and listening and, and watching in-intently as, as everybody here.
What's your view of, you know, some of the protectionist arguments that we've been hearing tonight?
Look, I, I find myself very aligned with Peter, um, which perhaps isn't surprising given I have a finance background as well.
I think Jason's points were made that there are tools in place in order to, um, enable a form of protectionism.
I think what, um, Peter was expressing is, um, there are all kinds of reason why this is a bad policy to do.
When you step back and say, "What is the causes of the major compression of returns for the industry?" Setting aside the biotech inf- ecosystem, so the industry, um, I can tell you, if you model it using dynamic modeling and systems, and I was playing around, thanks to Claude Cowork, which is just mind-blowing, um, the, the, the two biggest drivers, number one is, um, IRA, and number two is MFN, and then comes China.
So, um, if you look at the bulk of the damage to re- industry returns, it's not created by China.
And so China's a nice bogeyman to go after, but really it's, it's taking the heat away from what should be the focus.
I think there's a broader conversation about, and this really comes back to some of the topics raised earlier, about why has pharma prosecuted the same targets and the same crowding, and there's been limited innovation.
Um, part of that has been because of the rebate wall, which has enabled companies with a lead franchise and incentivized them to just come up with the next molecule, roll it, roll it.
Um, but when you think about, you know, what is gonna happen, my prediction will be that with the impact of FTC settlements and then with the predik- the, uh, impact of, uh, uh, PBM reform, you're gonna see shorter and shorter product cycles because you're not gonna have that rebate wall.
So companies are gonna be forced to take more risk with more unvalidated targets, and therefore, this feeds into all the discussion that we had in the previous question.
I-- You know, you've been sitting here in the front row and listening and, and watching in-intently as, as everybody here.
What's your view of, you know, some of the protectionist arguments that we've been hearing tonight?
Look, I, I find myself very aligned with Peter, um, which perhaps isn't surprising given I have a finance background as well.
I think Jason's points were made that there are tools in place in order to, um, enable a form of protectionism.
I think what, um, Peter was expressing is, um, there are all kinds of reason why this is a bad policy to do.
When you step back and say, "What is the causes of the major compression of returns for the industry?" Setting aside the biotech inf- ecosystem, so the industry, um, I can tell you, if you model it using dynamic modeling and systems, and I was playing around, thanks to Claude Cowork, which is just mind-blowing, um, the, the, the two biggest drivers, number one is, um, IRA, and number two is MFN, and then comes China.
So, um, if you look at the bulk of the damage to re- industry returns, it's not created by China.
And so China's a nice bogeyman to go after, but really it's, it's taking the heat away from what should be the focus.
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