The Antidote: Inside the World of New Pharma (28 page)

That’s how you do it. You have to put the energy into the reason for being of the company, instead of putting the energy into the financial performance of the company. Josh built the culture. He paid attention to the culture. He was fascinated with the culture.
It’s the culture, stupid.
That’s the difference between great companies and not-great companies.

A degree of caution was in order. Merck, lauded for its values and vision, was one of the companies that Jim Collins, inventor of the BHAG, featured in his 1995 bestseller
Built to Last
. Only a dozen years had passed, half a generation, and now when great companies with promising futures were discussed, Merck wasn’t mentioned. Nor was Sears, another of Collins’s prized examples of companies that seemed to get the balance of mission and cultural identity just right. Both could well come back, but not soon, and not easily. The “secret sauce,” as Garrison called it, had curdled. In presentations to the company and to the board, he identified the cause, which he called CLCD—“Corporate Life Cycle Disease”—the self-deception, corruption, and conservatism that come with time, experience, and Wall Street’s tyrannical expectation of year-to-year growth, which is particularly trying in pharmaceuticals.

As much as Boger was creating Vertex to last, the company was still in adolescence—still hemorrhaging $60,000 an hour—with a long way to go to launch. Whether it was a great company or even a good one had not been tested in the market. Only time would tell if, in its deepest structures, it had become the enterprise he and other Vertexians were wagering their careers trying to build.

As strained and remote as Boger’s relations got with his board, his ties to his top executives suffered from the opposite problem: the inevitable paternalism and fractured alignment of hub-and-spoke leadership. A majority of directors now distrusted him, feeling misled. They grumbled that he withheld data and switched subjects when questions came up that he didn’t want to discuss; that he was purposefully oblique. Emmens felt
a troubling “disconnect” in meetings—a palpable mutual distaste. But the ET members—Alam, Mueller, Smith, Garrison, Ken, and the others—owed Boger their positions, admired him, and were most effective only when they could enlist him on their side. They too met as a body, but if any of them had a problem, that person went in to see Boger one-on-one, sitting across from him as he continued to work at his computer, multitasking furiously, yet outwardly as attentive and still as a stork. On the Vertex ET, the “we” in “ ‘We’ wins” was much more “I and thou,” more “imperial we” than an expression of unity and teamwork.

In late June Vertex announced two new senior management appointments. Kurt Graves, hired as chief commercial officer and head of business development, came from Novartis, where he had launched a record nine drugs in eighteen months as chief marketing officer. “He had fantastic credentials,” Boger recalls. “He was the Novartis commercial guy who sat in on FDA phone conferences.” Still in his forties, Graves had started his career at Merck, where Roy Vagelos picked him to lead a new unit to market Prilosec, telling him, “Go build the twenty-first-century pharma company.” With a first-class strategic, business, and analytical mind, he also had the requisite deep appreciation for R&D. Several board members considered him ripe to be groomed as Boger’s successor, one of them going so far as to anoint him the “Golden Boy” in his interview—before he was offered the job. “Thanks for taking away all my leverage,” Boger recalls thinking.

The lawyer Amit Sachdev joined to direct the company’s government affairs and public policy efforts. He arrived from BIO, where he managed the health section and the governing board. Boger didn’t want just an in-house lobbyist with strong Beltway ties, though Sachdev was surely that: a former deputy commissioner at the FDA and before that majority counsel to the Committee on Energy and Commerce in the US House, where he was responsible for bioterrorism, food safety, and environmental issues after 9/11. Boger needed a strategic-minded activist who could wake up Washington about hepatitis C and, by extension, the urgent need for telaprevir and other new drugs. Unlike those of AIDS, the dimensions and costs of the HCV epidemic remained largely beyond the ken of politicians and bureaucrats, who failed to recognize the size of
the threat to public health and the nation’s unpreparedness to pay for and fix it. A kinetic figure, casual but intense, Sachdev could backslap, but first he and Boger knew he had to educate.

The next week, the board held a retreat. Boger led a three-hour discussion with charts and slides to determine the criteria for the next CEO. Ever since the subject of succession first came up three years earlier and Boger advanced Emmens as his “get-hit-by-a-bus guy,” the directors had supported his basic proposal: they should be on the lookout for someone with “a deeply experienced commercial sensibility married to a sincere appreciation for, if not mastery of, the R&D side.” Now they fleshed out the description in greater detail: a great speaker; someone who could project equally well the image of a fast-paced scientific company to Wall Street and a solid, progressive business entity to scientists.

“You weren’t going to find a lot of these lying around,” Boger recalls. “The board arrived at a profile which seemed to be unmeetable, but it was sincerely put together. But there wasn’t any search firm. I wanted their input on it—if we see the right person, then we should move, rather than a clock clicks, and it’s time to go do it. I said, ‘We’re not ready for the transition, but we’d better be ready intellectually for the transition if the right person comes along.’ Most of the board thought Kurt needed years of seasoning but that he had the right DNA and the right background. Kurt fit the profile except that he hadn’t been tested in a growth situation.”

Boger thought he might step down someday, but he saw no more than the same routine urgency for a thought-out, scalable leadership plan that had been there all along. Few modern CEOs lasted a decade, still fewer almost twenty years, as he had, and Boger knew that Emmens, for instance, the only serial CEO among the directors, thought that five years was the optimal tenure: long enough to take a company to the next stage or turn it around but not so long that you begin to think, like a professor or a judicial appointee, that the job should be yours as long as you want to do it. Taking seriously the dispensability of everyone in charge, including himself, Boger directed the head of human resources, Lisa Kelly, to develop succession plans for the entire ET. In parallel with Garrison, Kelly began to identify those within Vertex who seemed best equipped
to move up quickly in the organization if anyone in senior management left suddenly.

Boger and Sachdev huddled with small groups in Cambridge and Washington over the conundrum of having a blockbuster molecule for an underrated and undervalued disease. With diabetes or incontinence or depression or the other ailments depicted in the ubiquitous ads that now, because of demographics, saturated the nightly newscasts, there were few mysteries about the size of the problem or the market. The same was true with horrors such as CF and AIDS, where activists drove home the message. But hepatitis C was a true orphan disease—not by the FDA’s numerical definition but in the sense that it was dispossessed, without a home.

Drugmakers don’t invent diseases, but they do define how governments and people think about an illness by offering hope through treatment. The history of hepatitis C had none of the hallmarks of an emergency, an issue that would readily enlist a politician or an agency to get involved. Unlike AIDS, it rose from the shadows, a furtive infection resulting from shared blood that, in most cases, showed up only decades later, when it was too late to do anything about it. As it spread rapidly during the 1960s, 1970s, and 1980s—before the virus was discovered and the blood supply could be secured—it became stigmatized, a social disease. As disease historian Jacalyn Duffin writes in her book
Lovers and Livers: Disease Concepts in History
, sufferers “took on special identities or ‘types’ that became part of the disease concept.

“Infectious hepatitis affected the poverty stricken, the lax, the institutionalized and the unclean; it was a disease of beatniks, ‘street people,’ and ‘hippies.’ Those likely to develop serum hepatitis were a mélange of the ‘guilty’—self mutilators and needle-sharing drug users—and of the ‘innocent’—recipients of blood or the heroic nurses and surgeons who had cared for them.”

The marketing of peg-riba elevated awareness but elicited little sympathy. Schering’s Pegintron and Roche’s Pegasys were effectively the same drug, but Schering initially dominated, largely by sending doctors unsolicited checks for $10,000 to prescribe its product and paying others
enormous fees to run clinical trials that weren’t much more than marketing gimmicks. It sponsored unblinded, sloppily monitored, head-to-head trials with Pegasys for which the doses of ribavirin were altered to favor Pegintron’s cure rate. Doctors who strayed or even spoke favorably about Pegasys “risked being barred from the Schering-Plough money stream,” according to the
Times
.

The payoffs stopped, but since the 2006 Medicare drug benefit took effect, Washington now paid for almost half of all medicines sold in the United States, and government interest in the pharmaceutical market had spiked. Federal and state prosecutors across the country were aggressively targeting the drug industry, investigating alleged payoffs, Medicare and Medicaid fraud, and off-label marketing. Earlier in the year, Schering agreed to pay $435 million to settle charges including that it lied to the government about drug prices and promoting Intron A and another drug for cancers for which they weren’t approved.

Sachdev arranged for Boger to meet with Dr. Steven Galson, a top public health physician who directed the FDA’s Center for Drug Evaluation and Research (CDER). The problem Vertex needed to solve was what it would take to bring the issue of hepatitis C to the forefront. The disease was a time bomb, affecting a tight cluster of largely poor baby boomers whose medical care was paid disproportionately by Medicaid and Medicare. The older and sicker they got, the more the government would pay to take care of them. Within a decade, the costs would be enormous, dictated by what treatments were available. Yet because only one in four people infected with HCV knew they had it, the greatest savings would come by identifying them
before
they needed treatment. “That was the premise we took forward,” Sachdev recalls. “The system was designed to push the problem along, not solve it. How can we incentivize people to say, ‘You know what? We should solve this problem while it’s solvable.’ Steve told us, ‘You’re not ready to trumpet to the world that everyone should be screened. In all the noise of health care, what’s the urgency to solve your problem? Why do you have to solve this problem now?’ ”

Here was the necessity of Boger’s outside game writ large. Vertex, a company that almost no one in or out of government knew, held the lead
against a major public health threat. Once telaprevir made it to market, decisions would be made across the country and at every level of government to decide whether to pay for it and how much to pay. This was not a disease where prescribers and payers could be bought off, not that Boger saw any need—or value—in operating that way. To get its drug to patients, Sachdev believed, Vertex needed to entice Washington and the states to look at their contributions, then convince them: “You actually can put your money where your mouth is in terms of cost effectiveness.”

In October Bush named Galson, a retired rear admiral in the public health service, acting US surgeon general. Adopting the company’s preference for data, Sachdev began to assemble Vertex’s case. He commissioned a health care consultant, Milliman, to conduct an actuarial study of the consequences of HCV and the costs of a baby boomer epidemic of liver disease, to prove the disastrous cost impact on government and private payers over the next twenty years if better alternatives to peg-riba weren’t advanced quickly. Vertex needed to reintroduce hepatitis C to politicians who might not have an HCV epidemic in their districts but might appreciate the economics. In political terms, there wasn’t much time. “The message was not for the whole world,” Sachdev recalls. “I designed this for the government.”