Calling BS on the link between tax increases and medical device innovation...

I know I haven't posted here in months. Things have been quite busy and I am unable to write as much as I would like. That said, I wanted to leave 2011 with a "I told you so" post, so that I can come back and harp on this later.

Is money the problem with innovation?

How does more money equate innovation? Is it the same expectation as throwing many monkeys in a room with a bunch of keyboards and expect them to produce great literature? It probably is. Has it ever worked? Maybe you will get a couplet out of it, but can you expect a sonnet?

Is laying people off the most innovative solution to increased taxes?

I am not at all for increasing taxes. However, how else would you expect incomes to come in to pay to allow more Americans to access health. One "large" organization is claiming that it will lay off 1000 employees to pay for the taxes. Now, is this really the way to innovation? They can't cut other costs? 

When costs increase, do you skip meals, or skip the movie outings? Every lay-off is grounds to believe that the CEO and management has probably failed TWICE. Why twice? First, they probably did some very inefficient hiring, and secondly they chafe responsibility. 

Well, you have to ask yourself this. Why did they hire a 1000 employees too many? First of all, it never happens to be that much, and secondly, yes, it happens - employee functions disappear and such, but more or less, this is just because the "management" in most of these organizations is an old boys (and girls) club and they want to get rid of well meaning employees, rather than cut from a management.

Shouldn't a performance failure directly mean management failure?

The Cisco Example

Look at the CEO of Cisco. The company was in dire straits in 2011 directly because of his narrow mindset, heck, his inability to produce results. Why mince words? Yet, he got to lay off thousands of jobs and keep his. Ask yourself...

The HP Example

HP had it going for a while. They bought worthless companies, hired duds and kept sending them off with golden parachutes. When things got hot though, what was their solution? Well, they brought Meg Whitman, of the "I took the eBay stock and rubbed it in kaka" fame, and "I hired an illegal immigrant and decided to run for a Governor on behalf of the people opposed to that" fame as well in as the CEO. Here is the kicker - she was on the board that made all the poor decisions in the first place!!!!

What are the real roadblocks to innovation?

A 2.3% tax increase is not the reason why innovation in medical device design is going to retroactively die, as John Kartch and Stephen MacMillan would like to misinform you. Let us look at some real issues:

1. The mid-life crisis - monkey see, monkey want

There were some innovations in the industry, and then for the most part, they tend to poke out their head out of the vast desert stands of the medical device industry every so often. Why so? 

This was a problem in 2007, it is very much a problem even now. One stent succeeds marginally, of course the success is called phenomenal at first, and everyone wants to build a stent company. A catheter company succeeds and of course everyone wants to build...well, you get the point, monkey see, monkey want, monkey try, body not agree, monkey blames taxes, the FDA, the Mayan calendar, everything except self...

There is no attempt at real innovation here, just a need to create copycats. You can see it in the companies, their names and even their job advertisements - Wanted: Someone who has designed 233 catheters and wishes to design their 234th; slavery a must, peanuts optional...

Innovative, no?

2. Crash and Burn - VC style..


The Venture Capitalists who got there with almost nothing but sheer luck and no nothing about devices have their own plan. Under-fund a company on crappy me-too ideas, going after diseases and devices just before they get to the "also-ran" point, and demand quick results that lead you to King Solomon's mines...

The companies that are lucky enough to get this money go after said diseases and devices in a rushed manner, fail and then give the whole thing a bad name, making it bad for anyone trying to go after this a second time around.

And then of course the VCs bandy together and blame regulations for the failures of their minion companies...

3. Taking the wrong risks and avoiding the right ones


Innovation is risky business. By treading the familiar path, you will never innovate. You have to branch off, go against the flow and all that to actually change the way something happens. You really, really cannot do anything but micro-innovate your way to success.

The easy way out, is to blame Obama, the tax man, the regulations, heck even the Mayans and their calendars...and this, is what I am calling BS on...

Blog Action Day - Blogging for Food...

Today is blog action day and I received an email just last night about this. I don't have much by way of content, but I thought raising awareness is not much about content, but lending a voice. 

Food is one of the three essentials of life, as anyone would know. There is one fact I learned earlier this year, that has stuck by me and given me much reason to think. 

Did you know?

About 30% of the food prepared for human consumption is never consumed!

Now juxtapose with all the hungry people of the world, the children, the elderly and many in between that never will have access to good food. Is our waste warranted? 

Here are a few simple actions I pledge:

1. Plan ahead and only buy sufficient ingredients that will not be thrown away because of expiration.

2. Order only the amount of food I know I will be able to eat.

3. Try to cook only the quantity I know I will be able to eat.

4. Try to compost food that will be wasted no matter how many precautions I take.

5. Try to work towards technology and solutions that will help us to a world where hunger is no longer a world problem. 

Any other thoughts? Anything else that needs to be pledged?

The Acne Apps Scandal - how a select few make everyone suffer...

Lately, there has been so much yelling and screaming by concerned "non-profits" and their "friends" about how taxes kill innovation, patents kill innovation, regulations kill innovation and pretty much anything that the party they support does not endorse kills innovation (I don't care about your politics, but stop being so transparent, please!).

And yet, for all this noise they throw out, the signals in their brains appear too weak. On one end, they hark about taxes, and on the other end they hang on to aging, inconsequential CEOs. On the other hand, what the hell do people think when, 

1. They let people design and sell apps that "cure" Acne by pointing a cell phone at something? Why did the FTC have to intervene? What is fundamentally wrong with Apple and Google that they did not actively seek out this nonsense and stop it.

2. There were 15,000 downloads of the apps. I am hoping about 14,990 of these downloads were done for a joke? Yeah, I live in fantasy land. Well you know, if we weren't this silly, why would a Government need to regulate such fundamental things?

Irresponsibility - the origin of regulation

Pharmaceutical, device and now app regulations arise because companies act irresponsibly. Sometimes so gravely and with such transparency and ulterior motives that it causes one to pause. The two acne apps are excellent examples of such behavior.

The industry cannot condone such action on one hand, and continue to seek fewer regulations on the other hand. It is just not going to happen. There are more than the 15,000 geniuses that downloaded the apps, and some of us think! - And when we do, we think for all of us, just not some of us!

The few that ruin it for the many

If, among the whiners and complainers, there are ones that really want less regulation, they need to take on the few that ruin it for all of us. Don't simply stand by everyone that crosses your path. Take a stance, fight back and then maybe, we can get some of those regulations down. 

If you simply want to complain, good luck..

Reference:

The Acne Cure app issue: http://www.fiercehealthit.com/press-releases/acne-cure-mobile-app-marketers-will-drop-baseless-claims-under-ftc-settleme

Off-Topic: Please vote for us!

I know this is off-topic, and I haven't blogged in a while. As has become the norm, I have become busy with some stuff, but I have some exciting news to share with you. One of the projects I have been is a telemedicine project for EnableRx.

We are looking for some votes and I thought I would reach out to the readers of this blog seeking some of those votes. Any feedback you have is also welcome. Every vote counts and the organizers are strict about the accuracy of the registrations.

Please take a look at us here: http://contest.techbriefs.com/medical-2011/2030

There's trouble ahead for Pharma...

Pharma, Drug Industry, or as many of us fondly refer to it as "Big Pharma" is headed for trouble. There are four main sources of trouble for the industry and while this is no uncommon knowledge, it is worth repeating here:

1. Size:

No one wants to admit it, but pharmaceutical companies have bloated to sizes that are unfathomable within the realms of meaning or logic. Once companies get this big, all they care about are Excel files in which employees are mere cells if not columns. Every effort to fight costs is seen as an exercise in employee reduction.

Recently, I came across a rather depressing rebuttal to Scientific American's "1,000 Scientists in 1,000 Days", by Josh Bloom, a former employee of Wyeth, with a PhD in Chemistry and more than a few years of experience to boot, that complained about the jobs moving to cheaper locations.

While he paints a sobering picture and may create the impression that building careers in science and engineering may not help kids in the future, the point that the layoffs in big pharmaceutical companies have gotten out of control.

Consequences of size

The large scale of the organizations in question exponentially worsen the problems they face. Instead of taking responsibility, executives appear to stake out defensive walls and target large swathes of employees and lay them off. It is not surprising then that scientists like Josh Bloom appear disenchanted.

2. The buck-passing routine

Blaming the FDA or the federal government or pretty much any other entity but themselves has become a favorite with executives in some of these companies. With Senators and Congressmen acting as mouthpieces to their donors, the executives and the organizations, this has only become too easy. The Supreme Court has not helped with its irresponsibility in assuming that a laissez-fair state of donations is somehow constitutionally acceptable.

Company executives should exercise and assume strategic vision and indulge in creative solutions, not pass the buck and appear spineless.

3. Loss of exclusivity - the patent "cliff"

With many patents about to expire in the near future, about 110 drugs will lose their exclusivity between 2012-2014. This represents a significant loss of income for various pharmaceutical organizations. Before you herald your sympathy though, you should realize that the fact that the companies will be affected by the patent "cliff" was in open view, and should not come as a surprise to anyone.

Relying way too much on one and only one strategy - exclusivity to "blockbuster" drugs has led to the issue at hand, again something that these high priced bell-hops executives should have hedged against with alternates.

Simply acquiring companies and slashing jobs has of course been the only and ineffective alternate.

4. Conservative R&D

"Throughout the centuries, there were men who took first steps, down new roads, armed with nothing but their own vision." -- Ayn Rand

Cheesy? Yeah, maybe, but here is the deal. Drugs were released, not by MBAs equipped with pretty PowerPoint slides, but by people who struggled through starting companies and double mortgaged their homes. When these companies became acquired by larger organizations, R&D turned to becoming conservatives.

In trying to come up with new drugs, organizations have adopted the same age-old strategies, and used smoke-screens instead of real and deliberate attempts at innovation. This of course, has meant that only 21 molecules were introduced last year, as opposed to 26 the year before.

The Dendreon success story

When Provenge finally won approval, it should have served as an eye opener for many pharma executives that status quo is not a good R&D strategy. There are so many avenues available in genetic repair, personalized medicine and others that remain unfunded or under-funded because everyone wants "someone else" to do it, so that they can swoop in later on, acquire them and lay people off..

Companies that buck the trend and take risks to forge new paths will succeed while others will be left behind to acquire their way to oblivion.

5. Falling, falling, falling...

So, between 2009 and 2010, R&D investments fell over 3%, down from $70bn to $68bn. While that might seem small, according to Reuters, it is bound to fall more.

There are fewer IPOs slated for biotech organizations this year.

Investment in biotech start-ups is also down.

Conclusion

It is time that pharmaceutical companies got serious and set the right priorities. Companies need to trim fat, starting at the top. Stop passing the buck and take responsibility to make sure investors get positive returns on their investments. Make sure there is enough R&D funding and finally, remember they are in the business to improve people's health...

References:

1. Some numbers:

http://www.reuters.com/article/2011/06/26/pharmaceuticals-rd-idUSL6E7HO1BL20110626?feedType=RSS&feedName=rbssHealthcareNews&utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+reuters%2FUShealthcareNews+%28News+%2F+US+%2F+Healthcare+News%29&utm_content=Twitter

2. On vanishing science jobs:

http://www.nypost.com/p/news/opinion/opedcolumnists/america_vanishing_science_jobs_V3TzWwPRZsmTh1sGmtVr8L?fb_comment_id=fbc_10150227908749349_17158421_10150228481934349#f2951ecb507bb

3. Scientific American's 1000 scientists in 1000 days:

http://www.scientificamerican.com/page.cfm?section=calling-all-scientists

4. Genetic Editing:

http://www.guardian.co.uk/science/2011/jun/26/doctors-breakthrough-repairing-genetic-defects

5. On passing the buck:

http://chaaraka.blogspot.com/2011/06/on-scott-browns-unfactual-rant.html

http://www.boston.com/news/nation/washington/articles/2011/06/27/biotech_industry_lobbies_against_medicare_cost_panel/

On Scott Brown's unfactual rant...

It is like a scene from a bad cowboy movie. Or, a Chuck Norris episode, with GMC trucks and everything. Scott Brown was probably "coached" by his friends at some of the Biotech companies which have impressed on how they have to "train" FDA officials who are regulating them.

Equipped with this, he went and stood in front of a whole bunch of his Biotech friends in some dog and pony show in Massachusetts in his probably inimitable style, that gives no credence to facts or reality.

Here is a dose of what he is purported to have set. "Whether it’s the FDA, EPA or the “ABCDEFG, you name it — there’s so much overregulation right now,” he said. “When you go overseas, the processes are down, they’re set.”".

Too bad, entry into the U.S. Senate is not even under-regulated you say?

Well, according to Scott Brown's constituents, you have to drive certain vehicles, and take money from donors and recite what they ask you to say. See, the process are down, they're set!

Fighting with facts!

You may not like how the FDA regulates things. And if you choose to do so, you can fight in a way that doesn't make you look like a special-plastic smelling aficionado! Just don't do what Scotty here has done - ranting so poorly that one of the FDA spokespeople who he might deem "lacking in mental capability" was able to come out and say that Scott Brown is mostly, if not completely wrong - without having to try hard! As to mental capabilities, what do they say about it taking one to knowing...

Given that more devices and drugs have been approved over the past decade than ever before, and given that the US is still one of the safest bets as far as medical standards go, Scott Brown's statements make him look very eligible to hire himself out to children's parties for some quality entertainment, which some cynical people might deem all politicians to be eligible for...

Cacophony

Armed with the unfortunate ability that renders any ill-minded person to register "non-profits" in the US, a couple of them have engaged in all kinds of cacophony about "over regulation", "loss of competitiveness" and other terms that they can express without developing even a superfluous understanding for.

While the people of a state should observe and regulate their regulatory agencies, it has to be done without rants and forged reports. Bring up the facts, and urge patient-oriented action, not profit or donor oriented action.

Consulting "Experts" - the wrong way

On the other hand, Senator Franken got too excited and has asked the FDA to consult "experts" in the device industry before making changes to device approval processes. Er., should the cop stop you on the freeway and consult you on whether you were speeding or how much the ticket should cost you?

The right way

Health advocacy agencies that don't take money from biotech and device firms; consumer non-profits and other members of the public who have an understanding that goes beyond the sound-bites handed to US senators should be the ones most actively engaged in discussing any industry's state of regulations.

Senators, biotech companies and others have a right to fight regulations too, if they plan to do it with facts, sanity and coherence. That day, pigs plan to fly...

References:

1. http://www.bostonherald.com/business/technology/general/view/2011_0622fda_fends_off_browns_attacks/srvc=home&position=also

2. http://www.fiercebiotech.com/story/sen-brown-accuses-arbitrary-fda-crushing-biotechs/2011-06-22?utm_medium=nl&utm_source=internal

3. http://www.medcitynews.com/2011/06/sen-franken-to-shuren-get-industry-input-before-changing-510k-system/

Blog Briefs: A great resource: The National Academies Press makes all pdf books free!

About Blog Briefs: Having become too busy to write a lot, I have decided to blog briefly, throwing out news and opinions that might interest people who stop by. Moving on...

The National Academies Press!

It is highly unlikely that you haven't heard about the NAP, a confluence of various US organizations that publish several reports a year. Whether you are in sciences, engineering, entrepreneurship or policy making, you would use any valuable information that comes your way for free, right? Well, I read this press release, and jumped on the NAP site to find out that there are over 4,000 books that are now downloadable for free!

I tested one and found it really simple to access a book by subject and launch the download. While you could register and access some of their deals and such, you could also just proceed as a guest..

Link: http://nap.edu

Elan was recently asked: Your workers or your private jet..guess what they chose?

A quick note: This month has seen me suffer a lot through the loss of my favorite feline Squeaky. This was predated with our failed efforts at using veterinary medicine to save him. I will be writing about this and my plans in detail. In addition, new deadlines and an extremely tight schedule are making posting quite tough!

Elan: This name means eagerness and earnest..as it turns out, the Irish pharmaceutical company chose to turn it into irony...

Companies like Elan are a staunch reminder that nothing has changed. Business, is as usual - an old boy's club. All everyone did was hold their breath for a little while and now, we are back to business. It doesn't matter that Boston Scientific just needs to pay $196mn. for the Guidant mess. Yeah, don't hold your breath with the lawsuit the Justice Department has filed.

It also doesn't matter that J&J's quality problems haven't found a bottom yet.

And yet, Elan comes out swinging as the worst. As it turns out, not only did they fire a bunch of their R&D folks, but flew on their private jet to let investors know how they are "saving money" and "on track" for 2011 growth..!

The result?

One irked investor claimed that while this was troublesome, Elan was a great company with a great molecule. Bravo!

Of course I could go on and on about the need for ethics and shareholder activism, but I thought I would just stop here, and rush back to dinner giving you some pause for thought..

"Do you really think pharmaceutical and medical device companies are going in the right direction?"

No, this is not about innovation that the President preaches, as if all that is holding innovation back is people's desire to jump out and start sketching on the white board...

Can companies survive, let alone thrive with such poor ethics and morals?

Until next month...