Gary Pisano's Harvard Education and opinions must be tempered by his response to the observations of Mark Altschule MD of Harvard upon seeing Altschule's patient Mrs J Edward Spike Jr. cured of causalgia in Boston by Dr. Eugene J Ratner as described in The Lancet below. Drug companies are largely indifferent to science and art as the guiding rod is money above all else.
Gary Pisano's Harvard Education must also be tempered by his as yet unstated views on the use of BCG (see eg faustmanlab.org, pubmed.org faustman dl, pubmed.org ristori + BCG) by ordinary people seeking to improve themselves based on their views of the work of such people as Ristori G and Faustman dl. The NYC subway system is the CIA's favorite testing ground for airborne moieties. Aerolsolized multidrug resistant TB is now a viable weapon, but their are many people with autoimmune diseases who would rather use BCG to improve their lives and only incidentally reduce their chance of contracting multidrug resistant TB in South Africa or on the NYC subway.
Gary Pisano's Harvard Education would be incomplete with reports from the field of his students' use of metformin and aspirin to treat cancer with perhaps an incidental benefit of prolonging the healthy life span. Metformin and aspirin safe, cheap and effective.
The greatest MD of all times is undoubtedly Hiram Maxim, the inventor of the machine gun, whose medicine has spread all over the world , has declined in cost and increased in efficiency over times, and which produces guaranteed results.
Science, art and intellect has been horribly disfigured by Harvard Business School and the likes of Gary Pisano.
Curriculum Vitae
Gary Pisano
Harvard Business School
Morgan Hall 417
Boston, MA 02163
(617) 495-6562
Ratner EJ, Langer B, Evins ML.
J Periodontol. 1986 Oct;57(10):593-603. Erratum in: J Periodontol 1987 Feb;58(2):77.
- PMID:
- 2945921
- [PubMed - indexed for MEDLINE]
2.
Ratner EJ, Person P, Kleinman DJ, Shklar G, Socransky SS.
Oral Surg Oral Med Oral Pathol. 1979 Jul;48(1):3-20.
- PMID:
- 287984
- [PubMed - indexed for MEDLINE]
3.
Ratner EJ, Person P, Kleinman DJ.
Lancet. 1978 Jan 14;1(8055):106-7. No abstract available.
- PMID:
- 74557
- [PubMed - indexed for MEDLINE]
Opinion
Big Pharma Needs to Get Busy in the Lab
Blanket generalizations about biotech firms being more efficient are unfounded.
The average cost of developing a single new drug has reached $2.6
billion, according to a 2014 study by the Tufts Center for the Study of
Drug Development. Is this figure accurate? It depends who you ask:
Critics of the drug industry say companies use the expense numbers to
justify high prices. But drug companies defend the estimates.
A March 4 event offered a new data point. The biotech firm Pharmacyclics agreed to be purchased by drug maker AbbVie for $21 billion after a heated bidding process. Pharmacyclics has one drug approved by the Food and Drug Administration—Imbruvica—for various blood cancers. Its other drugs are in the early stages of development, so AbbVie in essence paid $21 billion for Imbruvica. No one really knows whether this price is too high. That will depend on how much AbbVie can expand the market for Imbruvica.
ENLARGE
As expensive as the Pharmacyclics deal may be, it reflects a broader
trend of pharmaceutical companies acquiring drugs instead of developing
them. In the past few years, pharmaceutical companies desperate to
refill thinning pipelines have forked over several hundred billion
dollars on acquisitions—many times more than what they spent on their
own research and development. In December, for instance, Merck acquired
antibiotic company Cubist Pharmaceuticals for $8.4 billion. These
acquisitions are not accounted for as “R&D” on the income statement,
but economically they amount to R&D expenditures.
This raises the question: Are pharmaceutical companies paying more for R&D by acquiring companies than by carrying out the R&D themselves? The acquisitions would suggest they are.
Consultants, Wall Street analysts and pundits have long urged pharmaceutical companies to cut back on internal research and buy drugs from small biotech companies instead. Invoking various theories about economies of specialization and the efficiency of small firms, they’ve argued that it is cheaper and less risky to buy from the outside than to develop on the inside. This argument has been repeated so often and for so long—I first heard it in 1985—that it has almost become beyond dispute.
There’s just one problem: It’s wrong. In my own research, I compared the costs over a 20-year period of drug development at large pharmaceutical companies and biotech firms. I found no meaningful difference on average between what large pharmaceutical companies and biotech companies spent to successfully develop a drug. The blanket generalizations about biotech firms being more efficient are unfounded.
Beyond that, the cost of buying a company that owns a desirable drug depends on supply and demand of drug assets. Those urging pharmaceutical companies to scale back on drug discovery have assumed that the supply of available new-drug candidates would be high enough to keep prices low. The price of the Pharmacyclics acquisition, however, suggests that this assumption was badly off base. The supply of high-quality assets like Imbruvica is actually quite scarce, while a surging demand for blockbusters is coming from pharmaceutical companies with few of their own discoveries in stock.
Pharmaceutical companies thus increasingly find themselves in bidding wars to acquire the most prized external assets, a process that will inevitably increase what they must pay to acquire these drugs. And who ultimately pays the price for these higher costs? Under the current system, they are passed along to patients in the form of higher prices.
Clearly, patients, society and pharmaceutical companies would all be better off if there were more investment in drug research; government can do its part by reversing funding cuts for basic biomedical research and streamlining regulatory processes. Pharmaceutical companies can do their part. While they still need to collaborate with partners like biotech firms and universities, no pharmaceutical company will survive without strong internal science and research. Those with such capabilities will not only benefit their bottom line over the long term but make a much greater—and much needed—contribution to society.
Mr. Pisano, a professor of business administration at Harvard Business School, is the author of “Science Business: The Promise, the Reality, and the Future of Biotech” (Harvard Business School Press, 2006).
A March 4 event offered a new data point. The biotech firm Pharmacyclics agreed to be purchased by drug maker AbbVie for $21 billion after a heated bidding process. Pharmacyclics has one drug approved by the Food and Drug Administration—Imbruvica—for various blood cancers. Its other drugs are in the early stages of development, so AbbVie in essence paid $21 billion for Imbruvica. No one really knows whether this price is too high. That will depend on how much AbbVie can expand the market for Imbruvica.
ENLARGE
Photo:
Getty Images
This raises the question: Are pharmaceutical companies paying more for R&D by acquiring companies than by carrying out the R&D themselves? The acquisitions would suggest they are.
Consultants, Wall Street analysts and pundits have long urged pharmaceutical companies to cut back on internal research and buy drugs from small biotech companies instead. Invoking various theories about economies of specialization and the efficiency of small firms, they’ve argued that it is cheaper and less risky to buy from the outside than to develop on the inside. This argument has been repeated so often and for so long—I first heard it in 1985—that it has almost become beyond dispute.
There’s just one problem: It’s wrong. In my own research, I compared the costs over a 20-year period of drug development at large pharmaceutical companies and biotech firms. I found no meaningful difference on average between what large pharmaceutical companies and biotech companies spent to successfully develop a drug. The blanket generalizations about biotech firms being more efficient are unfounded.
Beyond that, the cost of buying a company that owns a desirable drug depends on supply and demand of drug assets. Those urging pharmaceutical companies to scale back on drug discovery have assumed that the supply of available new-drug candidates would be high enough to keep prices low. The price of the Pharmacyclics acquisition, however, suggests that this assumption was badly off base. The supply of high-quality assets like Imbruvica is actually quite scarce, while a surging demand for blockbusters is coming from pharmaceutical companies with few of their own discoveries in stock.
Pharmaceutical companies thus increasingly find themselves in bidding wars to acquire the most prized external assets, a process that will inevitably increase what they must pay to acquire these drugs. And who ultimately pays the price for these higher costs? Under the current system, they are passed along to patients in the form of higher prices.
Clearly, patients, society and pharmaceutical companies would all be better off if there were more investment in drug research; government can do its part by reversing funding cuts for basic biomedical research and streamlining regulatory processes. Pharmaceutical companies can do their part. While they still need to collaborate with partners like biotech firms and universities, no pharmaceutical company will survive without strong internal science and research. Those with such capabilities will not only benefit their bottom line over the long term but make a much greater—and much needed—contribution to society.
Mr. Pisano, a professor of business administration at Harvard Business School, is the author of “Science Business: The Promise, the Reality, and the Future of Biotech” (Harvard Business School Press, 2006).
Assembly Speaker Carl Heastie
(D-Bronx), left, with Gov. Andrew M. Cuomo at a news conference on a
legislative ethics reform agreement in the Red Room at the Capitol on
Wednesday, March 18, 2015, in Albany. Photo Credit:
AP / Mike Groll
Nassau County Comptroller George
Maragos seen on Oct. 8, 2014. Photo Credit: Howard
Schnapp
