Thursday, January 29, 2009

OX ME ANOTHER

Translate this.....

It seems that the business world has a penchant for arcane Asiatica. Some years ago, folks were reading books by Japanese militarists. Madonna does Kabala. Today, we move to China.

The Seeking Alpha blog (indeed) explains the new business model as somehow related to the Year of the Ox. How, I have no idea. Perhaps there is an insider out there, or some other initiate, who can translate the concept.

http://seekingalpha.com/article/117233-the-changing-business-of-pharma-in-the-year-of-the-ox?source=yahoo

15 comments:

  1. "The marketplace is moving away from accepting laboratory measurements as evidence of real clinical benefit, focusing instead on improving health outcomes."

    Help me out here.

    Either it means that the new and hotly sought-after chemical imaging process is going to be abandoned because it does not provide consistent products.

    Or without sufficient clinical trials, without evidence of efficiacy, products will continue to be sent to consumers and some rich bastard will cross his fingers hoping that they will make enough money on a product before the lab rat public has the opportunity to die off or try to convince DOJ to do something.

    Anyone?

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  2. Maybe the reference to the year of the Ox is an analogy to the rising world power of China which is/will change the the world. Pharma has its own "China" too and it's not the country it's the pharma consumer.

    Here's the quote from the article that caught my attention -

    "Pharmaceutical companies face an adaptive challenge to a changed context for business. The whole framework for getting new medicines approved is evolving, the amount of revenue generated by new drugs is dropping, and atomizing “customers” are awash in information and competing data claims. The marketplace is moving away from accepting laboratory measurements as evidence of real clinical benefit, focusing instead on improving health outcomes."

    My translation -
    The industry has finally come to the point that it can't throw its latest product over the wall and expect the consumer to gobble it up unquestioned. Real evidence of product performance - "improving health outcomes." is now required.

    To realize that the consumer is now savvy enough to understand that pharma is no longer the golden child must be a hard pill to swallow.

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  3. You either get it or you don't. You have immerse yourself in the flow, become part of another plane. Don't tell me you don't have a personal spiritual advisor?!

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  4. It probably depends on whose Ox is being gored....

    But this is, I think, the punchline: "This is about creating new wealth by forging new business ecosystems: Pfizer linking with Dole Foods to invent a new standard of care in diabetes; Pfizer connecting with Apple (AAPL) to design a unique aggregation of health information.." yadayadayada.

    In other words, Pfizer was dumb to buy Wyeth, another pharm company, because they will both go over the same cliff anyway. Instead, they should have bought, say, MacDonalds and sold cheeseburgers laced with Lipitor. The new combo product - you get your LDL and lose it in the same bite. I even have a slogan. Charlie Cheeseburger dances out, and says, "Give me some Lip, Man!"

    Look at Phillip Morris/Altria - the cigarettes are just a sidelight to the mayo. Their slogan could be, "50 Ways to Leave Your Lover."

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  5. I think another way to summarize the "new model" is to emphasize (even more) marketing over R&D. The blog seems to buy into the assumption that the pipeline, if not already dry, will inevitably become so. With patent expiration, the famous "black hole" cannot be avoided.

    Thus, pharma should think - not about developing and selling new drugs - but "networking" in order to provide something other than "drugs alone" - which the piece variously calls information, connection-building, etc..

    I wish we had more industry folks here to respond.

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  6. Testing to see if "recent comments" function still works....

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  7. "The marketplace is moving away from accepting laboratory measurements as evidence of real clinical benefit, focusing instead on improving health outcomes."

    This just means we are finally moving away from the foolishness of "surrogate endpoints" in drug development and clinical trials. Surrogate endpoints are indicators like reduction of LDL cholesterol or of blood glucose or increase of bone mineral density -- laboratory measures of a disease process that are taken as substitutes for real, observed clinical outcomes. Is that not essentially the story of Vitorin? It was a seductive fad because surrogate endpoints are not completely irrelevant to actual outcomes but they are not interchangeable with actual outcomes. The attractiveness of this idea was that trials would be easier, shorter, and cheaper.

    In the Year of the Ox there is no substitute for sticking to the basics in drug development.

    Bernard Carroll.

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  8. Barney - I think you win the certificate

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  9. CERTIFICATE OF GREAT MERIT

    Awarded this day to: Bernard Carroll

    For his grabbing the Ox by the horns


    BRAVO!

    The PharmaLittle Awards Committee

    (Suitable for framing)

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  10. Anyone who knows ANYTHING about Kabbalah, (and I know very, very little) knows Madonna either doesn't get it or she knows that her actions are the antithesis of kaballah. It's like saying you're a pacifist but you go out and kill people for fun anyway.

    Pharma is analagous.

    It's like the story of the Mountain and Mohammed. If the mountain won't come to Mohammed then Mohammed will go to the mountain.

    If Pharma can't come up with a sufficient number of blockbusters, then they will come up with fewer blockbusters but those that do will have side effects that cause people to buy your other drugs.

    Salmon

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  11. How would they know you wouldn't buy someone else's drug for the side effects? Serious question.

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  12. Depends on if you have a monopoly on it. One of the criticisms of Lilly and Zyprexa was that the drug caused diabetes, and Lilly is one of the only companies in the U.S. that manufactures insulin.

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  13. Thanks, Harpy. I was wondering because most AE's have several possible "remedies."

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  14. Anonymous,

    You're absolutely correct however typically more than one company makes me-too drugs for both the drug that causes the toxicity as well as the treatment.

    In addition, what you see sometimes is that when a new drug is underdevelopment and has a serious toxicity, you will often see some startup company coming in with a drug for an orphan disease that just so happens to be the same as the side effect the potential blockbuster is causing.

    Now of course when those startups go public in a few years they'll make a ton because the actually market is much much bigger than it would have been if they just were selling for that orphan indication. It then becomes very interesting looking at those startups and seeing where they're getting their money from and who from certain big pharma companies or investment banking firms are working with them.

    In fact take a look at all the big pharma companies that have started their own investment banking divisions. Much better than the senior execs putting their personal funds into investment firms that invest is biotech/pharma startups.

    Remember the critical path initiative and the predictive safety consortiuum beginning 5- 6 years ago where Big Pharma said to each other look we can make more money by working togehter than at loggerheads.

    Salmon

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  15. Analyze this...
    http://www.trekstudy.com/video.html

    "The winners will know how to work with all this interconnectivity, the chaotic, and the nonlinear. They will know how to build whole new forms of collaboration, like P&G (PG) and Google (GOOG), who recently exchanged employees in a move to spark marketing innovation." John Singer

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