Happy Friday! For those of you who know me, I am a big believer in “sharing is caring” (no I did not watch CareBears growing up). Many of you respond to my weekly posts and share your thoughts and experiences, but the most consistent responder has been the “Pharma Provocateur” Paul Simms.
I have known Paul for ~4 years. We connected early on around EyeForPharma sponsorship 🤑. I quickly declined, gave him more feedback (sh$t) about the conf, especially with a name like that, and hung up the old proverbial phone (well I think I was a bit nicer than that). Given our great history together 😂 , I decided to call Paul and ask him if he would be willing to join me on this “Hard Pill To Swallow” journey. He graciously agreed. We have no idea where this partnership will go, but it will continue as long as we have fun doing it. I also picked the most random picture and with Russian subtitles to (re)introduce Paul to you as my co-conspirator.
Recently I’ve been asking people: “if you had no pill to sell in the first place, what could you sell then?” In an effort to get people to think beyond the pill without anchoring it in the pill, as you illustrate. Seems we’ve both had the same issue although you got there first for sure.
But anyway what I have to say on this topic is in my slightly controversial linkedin post from last week where I compared our industry to a situation like the entire car industry making Ferraris. There’s nothing wrong with a Ferrari – they’re wonderfully desirable cars – but most people will never be able to afford one.
If you read the rest of the post you’ll see it’s a rallying cry for people outside R&D to become the innovators – and DTx is a great example of that. We can pivot far more quickly than those in R&D (hence Eroom) and so it’s up to us to sustain our industry through a difficult few years where we can no longer afford the super-expensive high-margin specialty drugs we’ve all been focussing on.
I don’t think I’m a DTx expert so this is more of a hypothesis. But it seems to me everyone always talks about investing in, developing, and getting approval for them. Nobody ever talks about the demand side, only the supply side.
Lots to unpack, but hope you are already enjoying this collaboration. Now finally, if you are still with us.. onto today’s chapter teaser “Scarcity breeds creativity”
I randomly stumbled onto this article in Forbes back in 2015: “The Science Of Why Scarcity Makes Us More Creative” and especially loved the sub-title “Being surrounded with ready-made solutions to problems can inhibit our creative growth.” So what does this have to do with pharma? Margins!!!
For pharmaceutical companies, the median gross profit margin was 76.5% (95% CI, 70.3%-82.7%), the median EBITDA margin was 29.4% (95% CI, 26.3%-32.5%), and the median net income margin was 13.8% (95% CI, 10.2%-17.4%).
Given the overall industry margins there are a lot of wasted efforts, duplication of those efforts, duplication and triplication of resources and so on. Add on top of that egos that are measured by the size of the organization and budget and all of a sudden that creates many solutions to problems that may or may not even exist. So what happens when a small team decides to consciously give back budget, have smaller footprint and less people? cliffhanger, my friends…
