BioPharma and Hollywood: Land of the Blockbusters


When you hear the word “blockbuster”, what’s the first thing that comes to your mind?
a) A movie that earns hundreds of millions of dollars at the box office
b) A prescription drug that brings in more than $1 billion a year in sales
c) A bankrupt chain of video stores
d) A large bomb capable of destroying an entire city block

All four of these choices are valid answers, but the focus of this article is on the first two. The parallels between biopharma and Hollywood are strong. Both industries invest huge amounts of money in a large number of projects with the hope that some will turn out to be blockbusters i.e. massive money making machines. Sometimes it works out, but the failure rate is high, with most drugs (and many movies) never recouping their development costs. Both groups also love to develop sequels, which is a simpler strategy than developing riskier independent products that their fickle public may, or may not, embrace.There are many aspects of their businesses that are shared by the pharmaceutical and movie industries. Let’s see how they compare:
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Hollywood and BioPharma: Differentiated by Unique Economic Models


In my previous post, I detailed numerous similarities between the pharmaceutical and film industries. Now it’s time to point out the substantial differences between these two businesses that illustrate their different economic consumption and pricing models.

Production Costs - Big Barriers to Entry in Pharma, but Not Film
Nobody’s producing drugs in their basement that are going to earn them a ton of money. Okay, let me rephrase that. Nobody’s producing legal pharmaceuticals in their basement that are going to earn them big bucks. Creating prescription drugs is a very expensive enterprise. The cost of bringing a new drug to market has been estimated by the Tufts Center for the Study of Drug Development to be about $2.6 billion. That’s a huge hurdle to making money. There’s no getting around extensive research, filing multiple patents, complicated manufacturing steps, expensive clinical trials, and detailed regulatory and FDA filing requirements. How long might it take just to recoup those costs? Let’s return to my previously cited example of a very poor selling drug. Seattle’s CTI BioPharma sold only $3.47 M of their non-Hodgkin disease/B-cell lymphoma drug Pixuvri worldwide in 2015 (all sales were in Europe). If it cost the company the current industry “average” of $2.6 billion to develop it (which it didn’t), it would take about 749 years just to recoup that money, based on 2015 revenues. And that’s without showing a profit. It’s a pretty safe bet this drug will never recapture its development costs no matter what they were.
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Would Government Buyouts of Pharma Companies Really Be A Good Way To Lower Drug Prices?


Here’s a novel way to lower health care costs: make the US government a purveyor of drugs. In a recent
article in Forbes, Peter Bach and Mark Trusheim suggested that the US government could reduce drug costs by buying Gilead and distributing its hepatitis C medicines at a greatly discounted price. The idea, on the face of it, is an interesting one to consider. In their scenario, the government buys Gilead for a 30 percent premium on its current stock price, spending $156 billion. The government would then sell off the R&D operations as well as a strong franchise of HIV drugs, reducing the “net cost” down to $77 billion. Other financial adjustments reduce the price further, lowering the cost to treat each patient down to $15,733 from what they claim is the current cost of $42,000. This represents a pretty nice cost savings when spread out over a patient population of 3.2 million people (including about one out of every three people in prison). Gilead’s hepatitis drugs certainly rank at or near the very top of innovative medicines coming out of biopharma in the last 25 years. However, the Forbes article did not delve into some of the far-reaching ramifications of what government buyouts might mean to other players. Let’s take a deeper look below the surface to see what such a buyout might portend.
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Consequences: In a Post-Truth World, Scientific Progress Goes Boink


Science is a search for truth. I work in the biosciences, where it’s all about understanding the mysteries of life. Our days are built around generating hypotheses and then working to accumulate sufficient data to either prove or disprove them. As scientists, we enjoy problem solving and finding out new things, both expected and unexpected. Our careers are (or should be) built around always doing something novel, because once something hidden is revealed, it’s time to move on to tackling the next riddle. Some of us relish a focus on basic science, while others work in the realm of innovating practical applications for what we (and others) have discovered. One could hardly ask for a more rewarding vocation than that.
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Why Even Superman Would Fear Donald Trump


Baby Boomers know that Superman, the world’s most famous superhero,
“…fights a never-ending battle for truth, justice, and the American way!” These words opened the 1950’s Adventures of Superman TV series that ran from 1952-1958. The introduction on the 1940’s radio series of the same name, however, was a bit different, “Superman–defender of law and order, champion of equal rights, valiant, courageous fighter against the forces of hate and prejudice, who….fights a never-ending battle for truth and justice.” The words, “the American way” were added to this phrase as part of the animated Fleischer Studios Superman serials in 1942, when the U.S. was deeply embroiled in WWII. The three extra words were dropped from the radio broadcasts when the war ended, but were revived in the TV show as well as the 1978 Superman film.
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