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/

From do scandals disturb you to which scandal disturbs you? - The Pharma Industry comes of age.....

[No external article links on title this time...all links are below.]

Should you choose to accept the mission, your choices are:

1. Avandia - GSK, A Physician and the Senate

2. Lipitor - The Senate, Pfizer and a Doctor who doesn't actually practice

3. Vytorin - Two large Pharmas, The Senate, and ... well some more baggage,

or, here is the bonus

4. The FDA, and the number of centuries it will actually take them to complete inspections, should they choose to follow their own rules for once!!!!

Here are some links to guide you through the sorrow:

Avandia

Vytorin

Lipitor and Jarvik (this one's from yours truly!)

And the FDA

Whatever the heck happened to this industry? Why is there no permanent learning and adoption from old debacles?

It is proudly announced that the very presence of the FDA in the '60s saved many children from cancer and death through suspicious drugs that were sold like aspirin in Europe.

However, the very FDA now seems to be this megalolith that can barely move due its own weight. Among other things, people are now questioning the FDA's role in each of the individual debacles surrounding the pharmaceutical industry. Plus, the FDA's very functioning is now in question....

In the midst of all this the White House and the Solicitor-General actually dared defend FDA's status via federal preemption to be the most effective "overseer" of all things food, drug or device related.

How they can achieve this, suddenly or gradually, I cannot sense! And so cannot most people. Plus, the Congress seems to be the weakest link in the chain...

Without worrying about the completely useless patent "reforms", they should seize the opportunity to find out, among other things,

1. Why, despite Congress and the press raising enough doubts about the Lipitor ads, does Pfizer seem to play them fearlessly anyway..?

2. Do the investigations made by various Senators, Committees and other Capitol Hill-related odds and ends, actually have any meaning, purpose and consequence, given how company after company seems to be steeped in scandal...?

And, we the people, have to sit and wonder, given FDA's stringent regulations in the US, if we see so many failures, what of the "emerging" markets and all the development work that goes on there?

As if this was not enough, here is what UCSF is suggesting for medical devices. "Regulate them seeking more information like you would do for pharmas". Given the FDA's success with pharma, the irony almost makes the article humorous:

UCSF Article

Ironies aside, the article and what UCSF suggests, is accurate by the letter...!!! But is the FDA the right organization to do it?

So what you say? Everybody recognizes problems - what is your contribution? Here is my simple solution:

Make the different divisions in the FDA more entrepreneurial, punish them for their "slips" and provide them with more money and power...oh, before that, throw the existing structure and the dinosaurs in the FDA's office files out....



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Nigeria: An example of risks of global business or risks of stupid business?

[Click on Post Title for Link to External Article]

With a little bit of help from places like FiercePharma, Pfizer may try to make itself look like the victim of "doing business globally". Well, I disagree, without any due respect whatsoever.

I come from a country, India, where you would be doing business "globally". Yes, we have an idiot for a health minister and what not, but more often than not, companies have been shoving business across the world to avoid regulations in "developed" nations.

And then, the rude awakening happens when the "developing" or "third world nations" "dare" to create a rule of law situation!!!!

While it might be true that meningitis can cause disease and disability in and of itself, here are a few things Pfizer needs to answer:

1. Did they do appropriate patient education or did they just let it slip? I am not talking about shoving oodles of legalese under patients' noses and forcing them to sign, but I am talking about encouraging doctors to use the utmost sensitivity to educate and warn their patients before allowing them to become subjects of any form of experimental studies?

2. Why wasn't (or Was) Pfizer proactive in suspending the trials as soon as things went wrong?

3. Pfizer does seem to promote aggressive abrasiveness when it comes to dealing with disgruntled patients. Yes, yes, we all know how expensive drug development is, and how torts are, but people "died" - as in, they went dead. Finito. Do you really think insensitive aggressiveness and playing a blame game with the Nigerian government is what the patients' families need?

Just take a look at how they are strong arming torts in the Celebrex case. Just today a NY Judge followed a SF judge in saying that the folks suing Pfizer do not have enough scientific proof that Celebrex caused heart attacks. While this may very well be true, this seems to be a problem for the FDA and Pfizer, not for relatives of folks who died. There seems to be something very disingenuous about the whole thing.

I don't understand how these highly paid individuals who lead large companies believe that brutal show of money force can solve problems that people deal with at an emotional level. It may be possible in the United States, but get used to it not working where Capitalism hasn't succeeded...yet.

Don't blame it on the "globe". Its not like people in Nigeria have no brains. They know that aggressiveness is what Pfizer uses and that is the only thing they will probably respond to. You should get used to the taste of your own medicine...sounds ironic for a drug company!

End the "holier than thou" attitude, Pfizer. You too FiercePharma - stop referring to Nigeria and the techniques of its people as "infamous".

Just try repeating this in China or India and see what happens. It does bother me now that the US seems to be the only country where such bothersome aggressiveness is tolerated.

And no, don't come back trying to educate me about the need to stumble in the drug discovery process. Its not like Pfizer's executives are out of their shirts. All they do every time something goes wrong, is fire a bunch of scientists. The company is doing just fine.

Big Pharma is mostly in trouble because it has grown too big too fast. The lesson of "global" business in the "21st century" might be that, you might actually have to look past mere cliches and actually pay attention to people's sensitivities around the world. Doing business across the globe will actually involve more than flying around in company jets on company credit...put those MBAs to good use!

Go back to Nigeria, apologize for your attempts to blink and make it go away. Take responsibility, and promise to act responsible. Both parties need each other and prevent companies from saying, "Pfizer ruined it for all of us".

Man, someone should invent the commonsense pill....

On that note, there are many non-practicing Doctors like Dr. Jarvis who are now "experts" in Lipitor or Biomedical Innovation who need to be weeded out:

http://www.cardiovascularbusiness.com/index.php?option=com_content&task=view&Itemid=89&id=403

Hippocrates must be spinning at the speed of light in his grave....


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