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Pharma CEO On Opioids, Medication Prices And Overregulation

Anthony Tabasso, CEO of KVK Tech, talks with Chief Executive about the challenges in manufacturing a controlled substance, a highly-regulated industry, and manufacturing generic medications with lower price pressure.
pharma CEO Anthony Tabasso
NEWTOWN, PA – SEPTEMBER 26: CEO Anthony Tabasso of KVK Tech Pharmaceutical poses in front of new facility on September 26, 2016 in Newtown, Pennsylvania. (Photo by Lisa Lake/Getty Images for KVK Tech)

Anthony Tabasso came to be the CEO of pharma company, KVK Tech, through a somewhat unusual path, he says.

Tabasso says he was an outside counsel for the Newtown, Pennsylvania-based company for a number of years, helping structuring its growth in its early stages. But as KVK got bigger, the previous CEO, who originally worked on the company a few days per week, found that it was taking more and more of his time and attention. Instead of committing full time, the CEO asked Tabasso to take the top spot, and after some hem-hawing, Tabasso agreed.

Needless to say, coming from private practice, it was an adjustment. “When you’re a partner in a law firm, you’re managing generally attorneys, maybe a handful of paralegals and some staff that are working with you, but it’s just a much different landscape,” he says. “When you come to the business side, specifically a manufacturing operation, you’re dealing with a much more diverse workforce, a much more diverse set of roles and responsibilities.”

Over the years, he has solidified a hands-on leadership style. He’s also learned various aspects of the business to successfully manage different operations. Tabasso spoke with Chief Executive about the challenges KVK Tech, which manufacturers a number of generic medications, faces in the pharmaceutical industry including walking the controlled substance tightrope.

Below are excerpts from the interview.

What are some of the big challenges you’re facing in not just the pharmaceutical industry but healthcare at large?

Like any business, we face a regulatory climate [that we’re constantly dealing with]. And ours is probably more challenging than the majority of industries out there because as you know pharma is very heavily regulated. We’ve seen improvements in that over the last several years where, when I first joined the company to get a generic drug approved, the time horizon for that could go [from] 3-5 years and it was just completely open-ended. We had several products they got filed and it took four years or more to get approved. Congress eventually took some action, the [Food and Drug Administration] updated its procedures and continues to work to streamline that process.

I know the current FDA administration made it a priority to try and promote innovation for both new drugs and generic drugs and try and give some transparency to the approval process. So, that’s helped us out a lot, but also as an expanding manufacturing concern, you have to navigate a state and local regulatory structure and that’s challenging as well for us. We’re expanding our manufacturing capabilities and building new facilities almost from scratch. And that’s also been a big challenge and a big learning curve for us to be able to come in and…find regulatory structure at the state local level.

I want to talk about something that I perceive is probably a big challenge for you guys, and that’s that there is a lot of negative connotation [about] pharmaceutical companies, whether it’s because of the cost of medication or opioids or [other reasons]. What do you as the CEO have to do to overcome that negative reputation?

Yes, that’s very challenging. Because as I’m sure you know, we make controlled substances and the nation is in the midst of an opioid crisis and we have to walk a tightrope every day of, on the one hand, manufacturing the highest quality medications for American patients, and on the other hand, dealing with public opinion or political rhetoric that will vilify you for making controlled substances. And we have divergent roles to play. On the one hand, we’re making medications because people need them, right? And on the other hand, we have to [make sure] they don’t get into the wrong hands, we have to look for signs of over prescription and all these things that we’re not directly responsible for.

[We don’t have] interaction with the prescribers and we ultimately don’t sell to the pharmacies. Wholesalers do that, but for us, we have to monitor all those things as part of our charge from [Drug Enforcement Agency] and as part of our internal procedures to monitor these things to try and protect the public on two sides. We try and protect them by making the highest quality medication we can and giving the patient a product that they can trust. And on the other hand, [we have] to make sure that products don’t get diverted. So, we’re kind of caught in the middle and being in the middle is never an easy place to be, but we take our role and the public trust very seriously. And our people here have to work twice as hard to deal with this. It’s a challenging situation.

And as you know, [with] generics, there’s constant negative price pressure. So, from the day we introduce a generic product, in all likelihood, that day is the highest price that product will ever be for us. The price of the product will go down from then on and we have to set up an efficient operation such that we can maintain production of that product with that negative price pressure. And we have to work with our customers and with our suppliers and with our people internally to do that because the purpose of generic medication is to make the medication more affordable for the American patient. That’s what we do. But at the same time, you got to be able to make sure you can keep the lights on. So you have to balance all these concerns.


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