Henri A. Termeer (February 28, 1946 – May 12, 2017) was a Dutch biotechnology executive and entrepreneur. He was CEO at Genzyme from 1981 to 2011. Termeer created a business model, subsequently adopted by others in the industry, based on charging high prices for therapies for rare genetic disorders, known as orphan diseases. Genzyme used biological processes to manufacture drugs that were not easily copied by generic drug manufacturers. The drugs were protected by orphan drug acts, limiting competition and ensuring coverage by publicly funded insurers. As CEO of Genzyme, he developed corporate strategies for growth including optimizing institutional embeddedness, nurturing networks of influential groups and clusters: doctors, private equity, patient-groups, insurance, healthcare umbrella organizations, state and local government, and alumni. Termeer was "connected to 311 board members in 17 different organizations across 20 different industries". Oral history conducted by Ted Everson, Jennifer Dionisio, Pei Koay, and Arnold Thackray, May 23, December 7, 2006, August 2, 2007, December 18, 2008 & September 30, 2011
Termeer was named as one of the top 50 people who have advanced rare disease research, in a list produced by Terrapin for the World Orphan Drug Congress. The congress described him as an "inspiration and pioneer", many of whose protégés have gone on to lead other successful companies in the rare disease and biotech sector.
Education Termeer studied economics at Erasmus University in the Netherlands. In 1973, he completed his MBA at Darden School of Business at the University of Virginia. He received an honorary Doctor of Science from the University of Massachusetts.
Career Baxter Termeer began his career in the medical and healthcare industry in 1973 when he started working as manager of international product planning for Deerfield, Illinois-based Travenol Laboratories Inc. now known as Baxter. From 1975 to 1976 he was Baxter's international marketing manager. From 1976 to 1979 he was general manager for Travenol GMBH in Munich.
From 1979 to 1981 he was executive vice president of the Hyland Therapeutics division of Baxter Travenol in Glendale, California. Hyland sold Factor VIII, Factor IX, immunoglobulins, and albumin. The plasma was collected through plasmapheresis performed at collection centers all around the country, but there were ethical concerns raised over payments for plasma being made to vulnerable people. Standards for donating plasma are set by the U.S. Food and Drug Administration (FDA).FDA > CDRH > CFR Title 21 Database Search Almost all plasmapheresis in the US is performed by automated methods such as the Plasma Collection System (PCS2) made by Haemonetics or the Auto pheresis-C (Auto-C) made by Fenwal, Inc., a former division of Baxter International. Termeer described this as the beginning of biotechnology. At that time Baxter was developing tests for Chagas disease which was very prevalent in Latin America. Termeer was sent to South America to investigate. After meeting with the military and with the Center for Disease Control he called off the project as unprofitable.
Back in Chicago, he was Baxter's International Marketing Manager for several years with the Artificial Organs Division.
Monica Higgins profiled Termeer as one of the alumni of the Baxter biopharmaceutical industry firm, the 'Baxter boys'—who produced many of leaders of the biopharmaceutical industry. Higgins noted in 2004 that at that time, [t]he size and extent of Baxter's influence overall [was] difficult to ascertain since the biotechnology industry, with eight- to ten-year product development cycles, [was] still in its relative infancy."
In December 2011, the non-partisan organization Public Campaign criticized Baxter for spending $10.45 million on lobbying and not paying any taxes during 2008–2010, instead getting $66 million in tax rebates, despite making a profit of $926 million.
Genzyme In 1983, Termeer joined Genzyme, a two-year-old start-up biotechnology company located in Cambridge, Massachusetts. At that time, he described the company as "just three professors from MIT and myself and some venture capitalists." as told to Scott Helman According to the Boston Globe staff writer Robert Weisman, "in the formative years of biotechnology, Genzyme was the industry's Apple, blazing a pathway for creating protein-based treatments for rare diseases".
In 1985 he was appointed as Genzyme's CEO, and by 1988 he was chairman. During those years he held positions at Genzyme in Genzyme Tissue Repair, Strategic Planning & Capital Allocation Committee and Member of Risk Oversight Committee, Genzyme Oncology.
When Genzyme needed a manufacturing facility, Termeer chose to remain in Massachusetts and use local contractors instead of joining the pharmaceuticals cluster in the New Jersey and Philadelphia areas. Harvard Business School professor Michael E. Porter described Termeer's strategy as a cluster, the new economics of competition with all members benefiting from "a strong base of supporting functions and institutions." Under Termeer's leadership, Genzyme built a "critical mass" for its cluster in Massachusetts, a group of institutions that achieved unusual competitive success in the life sciences industry or biotechnology.
In 2005 Genzyme chose the specialty pharmacy division of PharmaCare, one of the largest pharmaceutical benefit management companies, as the national network provider for Thyrogen, Genzyme's specialty drug.
Cerezyme and Gaucher's disease
In 1991 the first version of Genzyme's orphan drug Alglucerase (brand name Ceredase), the only treatment for Gaucher's disease, was approved by the FDA.World Health Organization. Regulatory Matters WHO Drug Information 5:3 1991. p 123
Termeer explained in a 2005 interview for The Wall Street Journal that, in 1991, one treatment of Cerezyme for one patient took 22,000 placentas annually to manufacture, a difficult and expensive procedure. According to the Congressional Office of Technology Assessment, cerezyme cost $1.90 per unit including the cost of manufacturing, marketing, and distribution. Genzyme charged $3.50 a unit. Imiglucerase was granted orphan drug status in the US, Australia, and Japan.
By 1994 Genzyme had a new version of Cerezyme produced in genetically engineered cells in a process that was easier and cheaper. Although imiglucerase costs only less than 37 cents to manufacture, Genzyme charges $3.70 per unit making a 90% profit. The high price of the medication is part of Genzyme's business strategy for the biotech firm to undertake research and development for other drugs and to allow them to fund programs that distribute a small portion of production for free, so instead of lowering the price, Termeer "decided to use the extra revenue to give additional Cerezyme away free in countries that can't afford to pay the high price. He said Genzyme gives away about 10% of the drug it produces." By 2005 Genzyme had hired 34 people to help patients acquire insurance plans that would cover the cost of their drugs. By 2005 there were still no alternative drugs for patients and most insurers were willing to pay. Genzyme used the profits "to bring new treatments to market for two other rare diseases. It has purchased many small companies to expand into a diversified drug company with cancer, kidney disease and diagnostic products, among others."
By 2005 although Cerezyme cost the average patient (including babies) $200,000 a year, it could cost a single adult patient as much as $520,000 a year even though it cost Genzyme less than $52,000 to manufacture. In 2005 there were only about 4,500 patients on Cerezyme.
Pompe disease In 1998, two of Biotech executive John Crowley's children, Megan and Patrick, were diagnosed with a severe neuromuscular disorder, glycogen storage disease type II, also called Pompe's disease. In the face of the children's deteriorating health, the family moved to Princeton, New Jersey, to be close to doctors specializing in the disease.Edelstein, Jeff. "Look Who's Talking: John Crowley, dad, entrepreneur, and subject of the upcoming film Extraordinary Measures" , The Trentonian, January 11, 2010. Accessed February 17, 2011. "Princeton's Crowley family, from left, Megan, Aileen, John, Patrick, and John Jr. John Crowley, a Princeton Township resident, is the father of two children with Pompe disease." Crowley worked at Bristol-Myers Squibb, but frustrated with the slow pace of research on Pompe's disease, he left the company in March 2000 and took a position as CEO of Novazyme Pharmaceuticals, a biotechnology research company located in Oklahoma City which was researching a new experimental treatment for the disease."John Crowley On The Today Show 2001". Youtube.com, September 2001. Accessed June 16, 2008.
Crowley was a major force behind the search for a cure. By 2001 when Genzyme acquired Novazyme, Termeer put Crowley in charge of Genzyme's global Pompe program, the largest R&D effort in the company's history, from September 2001 until December 2002. At that time Genzyme was considered to be the world's third largest biotechnology company,Crowley, John. "To Save the Children". Notre Dame Lawyer, Spring 2007. Accessed April 4, 2008.Amicus Therapeutics, Inc. Executive Profile, BusinessWeek. Accessed April 4, 2008. Genzyme's work eventually bore fruit and in January 2003 Crowley's children received the enzyme replacement therapy for Pompe disease developed by Genzyme. Crowley credits the experimental trial with saving his children's lives. The acquisition of Novazyme by Genzyme, and Crowley's fight to cure Pompe's Disease, was documented in the Harvard Business School Case Study, Novazyme: A Father's Love."A Father's Love: Novazyme Pharmaceuticals, Inc. ". Harvard.edu, October 2002. Accessed June 14, 2011."Journey of the Heart". PharmaVoice.com, January 2009. Accessed April 8, 2009.
According to Higgins, by 2004 Henri Termeer's leadership at Genzyme was considered exemplary by several biotech industry observers, and Genzyme was seen as a role model for other biotechnology firms.
According to The Wall Street Journal, in 2004 Termeer earned a combined salary and bonus of $3 million. He also had "options valued at between $12.6 million and $32 million in 10 years, based on appreciation of the company's stock of between 5% and 10% a year, according to the company's proxy."
In 2007 Genzyme acquired Bioenvision and the rights to the North American market for clofarabine (brand name Clofarex), designated by the Food and Drug Administration (FDA) as an orphan drug
In 2007 Termeer as CEO earned a salary of $2.5 million, and non-cash compensation worth $129 million.
From 2007 to 2008 under Termeer as CEO, Genzyme spent $2.8 million on lobbying. In 2009 alone, Genzyme had 10 different organizations with a total of 49 lobbyists working on its behalf.
In 1981, before Termeer had joined Genzyme, it was a small firm that employed 14 people in an office in Chinatown. By 2006 Genzyme with Termeer as CEO had more than 8,000 staff in 70 offices and plants worldwide, making it the third-largest company of its kind. In 2004 Termeer was the area's highest-paid CEO, with a total compensation package worth at least $37.9 million. He was 42nd in the 2006 list of Boston's wealthiest with a net worth of $342 million.