The elementary in emerging markets

What categories have the most potential?

What kind of competition exists in these markets today?

What future competition will there be?

How do people behave and what is the best way to talk to them?

These all seem like fairly benign market entry questions; however, the paths of entry into emerging markets are strewn with the futile investments and broken branded bodies of initiatives who failed to fully heed the answers to these questions.

Knowing the questions is only half the battle. Getting the right answers is the other half of the fight.

Everyone knows the classic mistakes, like when Chevrolet launched a car in Mexico that meant Doesn’t Go (Nova) or when P&G launched soap in Japan that showed creamy bubbles in a tub (Camay) when Japanese bathers don’t put soap in their tubs.

You have to think that Chevrolet and P&G had on-the-ground partners who did the research and developed the campaigns that would help them enter in the market. But, nonetheless, they missed the linguistic and cultural train of successful entry.

For pharmaceutical companies looking to leave the slowly growing old world and enter the faster growing new markets, a different but still rigorous analysis is needed.

Here the questions involve matching the therapeutic areas of interest against a comprehensive profile of the market. It means understanding, in a given country,

• Disease burden

• Diagnosis

• Treatment algorithms and patient flow

• Prescription trends and availability of medicines

After starting to build a landscape of the market, a company needs to develop an understanding of the dynamism of the country. How is the country itself growing? Will the government invest in healthcare? Are the Ministries open to approval? Is reimbursement private or public and to what extent?

In order to get the background to these questions, it is important to interview government agents, regulators, payors, physicians, hospital and pharmacy directors, and trade bodies.

Then you can start to match the market against the company’s product portfolio and begin to make discreet choices.

It may sound elementary but it is anything but, dear Dr. Watson. Sherlock Holmes once said, “When you have eliminated the impossible, whatever remains, however improbable, must be the truth?” The goal here is to get to the truth of what will be the best course of action for a company, however improbable it may seem.

Emerging Markets: What Columbus Didn't Do

EMERGING MARKERS CHECKLIST

Too often when companies enter into emerging markets, they frequently fail to fully characterize the value chain. Yes, those markets are growing. Yes, they represent a population with newly minted coins clinking in their pockets. Yes, the government is encouraging investment. Those Old Developed Markets look much like they looked to Columbus as he said good-bye to Spain and set for the New World.

Talent pool

When Christopher Columbus landed in America, he thought very little about the local talent pool. He assumed the locals knew little of the sophisticated technology that he was going to bring. But the question for Columbus was how much was he going to spend once he got there? How much of his R&D was going to be coming from the old world or was he going to invest adequate resources on the new ground?

When entering emerging markets it is important for companies to understand how much intellectual capital they are going to import and how much they are going to generate locally. There is always a certain amount of comfort in knowing that the home fires are being stoked and the fruits of the scientists from the main office will be coming into the new territories.

However, understanding and tapping into the local talent pool is often a valuable cost-effective of accessing smart lower-cost labor. Quite often local talent is hungry to get the imprimatur of a foreign capital company on their resume, and may be dissatisfied with the opportunities available in local companies.

Accessing this R&D talent pool is also an excellent way of gaining critical on-the ground understandings of the ins and outs of local regulations.

Collaboration with Universities/Research Centers

As real estate agents say, location, location, location. Accessing that local talent pool also goes to where facilities are located. The closer the location to major universities and other research operations, the easier it is to attract talent. This location fact is true whether a pharma company is planning to be in New Jersey or in China. Many of the big multi-national pharmaceutical companies, e.g. AstraZeneca, GSK, Novartis, Roche and Pfizer, have R&D centers located in Beijing and Shanghai where it is easy to attract local scientific talent. While these companies also have operations in other cities, the critical mass achieved around these two major cities.

Regulations

Understanding local regulations are critical to safe, sound, government-improved operations. What kinds of permits are required for laboratories? What kind of inspections need to be done to start and to maintain facilities on an on-going? The essence for operations is being able to comply with on-the-ground oversight, and this compliance can be even more challenging as local regulations evolve.

Patent Laws

Many companies shy away from establishing cutting edge research operations in emerging markets because of concern about loosely filed and loosely followed patent laws. Losing control and ownership of innovations that rightly belong to the company continue to be a major concern. One way that companies address these issues is by using R&D to make incremental improvements to existing compounds and products rather than developing something entirely new. In so doing, the risk is less because the products are generally protected elsewhere, and yet the development team can still contribute to the innovation of life cycle management process.

By understanding these critical components, companies can best maximize their allocation of scant resources and live more productivity off their new markets.

Indecent Exposure

How do you feel about the security of your data in your Personal Health Record?


I heard a someone comment today on doctors dictating their work while performing an operation so they don't have to take notes later. The only problem is when the doctor says "the patient suffers from a contextual contusion" and it becomes "the patient suffers from sexual confusion." This comment goes into your Personal Health Record and someday you have to explain to an employer's insurer looking for pre-conditions or the Government Agency that is considering you for a Presidential appointment, you really had a hematoma and not an identify crisis.


When it ended its service, Revolution Health said that it will destroy all PHRs on file. If a patient has watched the television criminal dramas, NCIS or Law and Order, believing that electronic records are fully expunged is akin to believing that the Tooth Fairy aids good oral hygiene.


Credibility and security is crucial. One small, apparent success is the partnership between Google Health and the Cleveland Clinic. Doctors input patient data into PHRs that patients can import into their own secure Google Health account. Ideally, if patients move away from the Cleveland Clinic, they could take their health records with them. The issue of standardization for Health Care IT (HCIT) still remains. Like the infamous technical VHS vs. Betamax or more recent Blue-Ray vs. HD-DVD wars, aligning on a technical standard must Darwiningly happen.


For anyone interested, the opportunities for HCIT implementation are ensuring patient engagement, developing easy, time-saving but robust graphical user interfaces, and providing a common secure technical platform.

RIP Revolution Health

The American Reinvestment and Recovery Act (ARRA) made available $26 billion for Health Care Information and Technology Systems (HCIT) and the advantages to companies in productivity and optimization of profitability are well recognized.

However, challenges come in exploiting this information to ensure better patient outcomes and to create engaged and enhanced physician-patient partnerships. What happens when the best technical finery is set up for the dance and the partners fail to fox trot?

The recent demise of Revolution Health is a good example of what happens when hundreds instead of millions of patients sign up to fill out their Personal Health Records (PHRs). Founded with great fanfare by Steve Case of AOL fame, the PHR aspect of Revolution Health failed to gain any patient traction. General Manager Marjorie Martin said that “most patient rely on their physicians to do their record-keeping. They don’t feel the need to make a change. And it is still a fairly laborious process.”

Facilitation of HCIT will also involve developing access portals that go beyond checking CPT (Current Procedural Terminology) diagnostic codes and utilizing cutting edge mobile hardware (viz. IPads and Smartphones). Educating physicians is also critical. According to the American Medical Association, 50% of US physicians are 55 years old or older and will be at retirement age in ten years. As these doctors age into retirement, the US could have 40,000 less doctors for, according to current demographics, a burgeoning population of 42 million more Americans. The burden is creating a system for that will enhance productivity for a smaller medical delivery cohort.

10 SMART Questions for Commercial Development

Have you ever played “Truth or Dare?” The first player asks “truth or dare.” If the second player says “truth,” the first player asks a question, usually risky. If they reply “dare,” the questioner asks them to do something, also usually risky. In drug development, biotech and pharmaceutical companies alike play this game internally every day. Do we move this product into Phase III? How much is this market segment really worth? Will physicians use this product and, if so, how? Are the clinical endpoints meaningful enough for physicians to use the product vs. another standard of care? Will it be reimbursed? And no senior manager wants to take the risk of not having answers to these questions in front of the FDA, the Pharmacy and Therapeutics Committee (P&T), a payer or even senior management.

All these questions need to be answered in a world of limited resources. No pharma company, no matter what its size, has an infinite amount of money and resources to stream all its assets through its pipeline. For individual compounds under development, the challenge is to identify early assets that will fail so resources can be reallocated as quickly as possible. For an entire portfolio, whether it is for a specific therapeutic area or an entire company, managers need to understand how their decisions to invest in one product versus another affect risk and value.

The challenge is to answer all the necessary questions to gain the human and financial resources that keep a project moving forward as well as answer all the necessary constituencies. No one gets a perfect SAT score here. No one has the time and the staff to even list them all, let alone, answer them all.

To assist with these kinds of analyses that help understand the Opportunity, the Market and the Value, Manu Bammi and I have developed 10 Smart Questions that must be asked in order to truly understand opportunities from a 360 degree perspective.

Would you be interested in an article like this? If so, please write me at mrovner@smartanalyst.com

Cell Phone App Convenience Is Not A Strategy

I was in Barnes & Noble the other week shopping for books. Not a big deal, but I also have a Kindle and are an Amazon Prime member. Yes, there are some real paper books that don’t come on e-readers but that wasn’t the nature of my browsing.

I was interested in science fiction or a mystery, just kind of felt it after reading Moby Dick. As I had 30 minutes to kill before seeing Jeff Bridges in Crazy Heart, I decided to browse. I saw a book by Henning Mankell. It sounded interesting. So I scanned the bar code with my Droid cell phone’s bar scanner and emailed the title to my RemembertheMilk.com task reminder account. There was Ender’s Game by Orson Scott Card. Scan, click, email. Now I had two new books on my reading list.

I felt bad for Barnes & Noble. They were providing me with a very pleasant in-store browsing shopping experience but they weren’t going to receive any of my commerce that day.

So what do you make of cell phone retailer buying applications? It is great if you are in Bloomingdale’s and they don’t have your size. You scan the bar code, go to the store’s web site and order the size you want while you are right in the store. The New York Times notes that Wal-Mart, Disney, Kerr Drug and Crate & Barrel are testing this technology.

IBM has developed Presence that detects the “presence” of signed-up shoppers as soon as they enter a store, which allows the store to immediately send promotions to their cell phone. Cisco has Mobile Concierge that allows you to locate items within a given store, a must-have app if you are browsing in a Wal-Mart Super-Center or a Target. And Motorola is developing a cell phone app that puts a net-connected loyalty card on your cell phone.

All these technologies are wonderful. They make the shopping experience easier and hopefully increase a customer’s shopping basket. And they well may do so, but only to a limited point.

As David Ogilvy rightly once said, convenience is not a strategy.

Consumers have to want the product first. They have to appreciate its features and benefits and recognize the value. And then they will buy.

A product’s sales can increase when you make the buying experience easier, provide more information about the product itself and facilitate the actual purchase process.

Just like that old promotional truism of placing a product at eye level on a store shelf does.

But ultimately that does not make a product winner.

That’s why understanding and identifying the real consumer insight is so important. Technology itself is not the end; it is one element of the means. And it cannot replace the fundamental basics of sound product development.

Now, excuse me, I have to go to a friend’s house for dinner and I don’t know which wine to bring so I am going to scan some bar codes on my cell phone at Zachys liquor store.

Now Really! Chasing out the horrors in oncology drug development

In continuing to think about emerging issues in oncology, regulatory will play a critical and significant role.

In the UK, you just have to wonder what to do when the National Institute for Health and Clinical Excellence (NICE) rejects Novaretis' Afinitor for second line therapy in renal cell carcinoma and recommends against using Novartis' Tasigna and BMS' Sprycel for the treatment of patients with chronic myeloid leukaemia (CML) who are intolerant to Glivec. Why? There was that little thing about insufficient clinical evidence vs. other treatment options, but, oh by the way, if Novartis or BMS are willing to risk share and compensate for their price, well then, that's okay.

Oh, really? Now really! As Seth Meyers and Amy Poehler might say on Saturday Night Live. That's really NICE!

Just how long is it okay for any of us to live if it is too costly for the government? The next thing you know the NHS will be calling up the Inuit to buy some ice floes for cancer patients so they can push them off into the North Sea. Or maybe they can get that ice from Iceland which is in enough financial trouble as it is.

The basis point is that, for companies to succeed with regulators, Overall Survival (OS) and for how long life goes on remain the key endpoint.

All in all, a focused commercial development strategy in oncology requires a tightly defined Target Product Profile (TPP) in order to win with regulators and to aid physicians in understanding their treatment choices. This narrowed approach could enable companies to get their drug on the market faster, enabling oncologists to understand how they best may employ it along with other treatment options.

Of course, after you have figured out first what you are going after, a Life-Cycle Management (LCM) strategy needs to be built off that narrowed initial indication. Here it is helpful to complete all Phase I/II studies even prior to first approval with a full Phase III plan already in place.

As these plans are being developed, it is also important for companies to understand how this asset and its development plan aligns with other drug programs in the portfolio.

Many companies get caught up in the value of one particular drug programs without fully appreciating its value on everything else going on, a major point of understanding in a world of limited, expensive resources. A company needs to be able to value its "real" portfolio as opposed to making a decision about one stand-alone asset.

The key is to understand drug program inter-dependencies around technical, revenue and cost factors. An optimized portfolio that takes into account all these factors can actually yield significant economic benefits for a company over time vs. a stand-alone portfolio of individual assets. In an optimized oncology portfolio, a company can draw on identified synergies in research, clinical and targeted synergies to maximize the overall cost of commercial development and launch.

There are so many different considerations to be successful in oncology, it can make the head spin like Linda Blair in The Exorcist. However, by carefully and diligently, laying out basic strategies and developing an integrated series of approaches that involve not just one compound, but all the others in development, internally and competitively, oncology commercial development does not have to be a horror show. The demons can be exorcised, and a happy life can be lived by patients, physician and company managers.

Sound Strategies Needed in Oncology, Just As Much As In Smartphones

Last week it was about sku management of smartphone applications. This week, it is how do you think the commercial implications of oncology commercial programs.

Oncology is the fastest growing therapeutic areas, going from $48 billion in 2008 to $80 billion in 2012. For the pharmaceutical industry, oncology is an intense area of activity with 1,000 clinical compounds in development and over 2,000 pre-clinical compounds being considered.

As in many other business areas, like smartphone apps and other fast moving consumer goods, the oncology disease space, spurred by new pathway discoveries, is becoming increasingly fragmented with the identification of different patient and disease sub-segments. It isn't just prostate cancer, it is six different variants of prostate cancer.

In targeting the commercial opportunity, companies can benefit from a differentiation strategy that goes after well-defined patient segments, with those definitions aided by the use of bio-markers to help call out cancer indication.

As a result, discovery is increasingly focused on targets vs. tumors, with the opportunity for the same compounds to address multiple different kinds of tumors. Then, with even greater success, in many instances, cancer treatment has the opportunity to evolve into a chronically managed disease, like diabetes and high cholesterol, with the use of adjuvant and maintenance drug therapies.

As these sub-segments develop, companies also have the possibility of facing less competition when they are focused on very narrowly defined indication sub-segment and lines of therapy. This focus could also allow the company to realize a premium for its drug given a lack of other efficacious and safe alternatives. Here, as in many product developments, early to market strategies are critical and novel partnerships may be required, especially given combination therapies.

That said, good sound commercial strategies, applicable across a broad range of industries, and understanding the target audience and the delivery process, are critical to success in the market, whether it is a cancer drug or a smartphone application.

Online SKU Management: Apt Stores for the App Stores

So where do you go shopping for applications on your smartphones?

Apple of course has its App Store with over 140,000 apps.

Google has its Market with 20,000 apps and growing. So does Research In Motion for its Blackberry. And Nokia has its just launched Ovi Store with apps coming.

Now if you are the proprietor of these online supermarkets, how do you manage your sku's?

All good category managers on the manufacturer side are continually reviewing their assortment to match consumer needs, variety, profitability and shelf space. And they partner with retailers, who are concerned about similar issues, to offer an optimal assortment for the consumer. They discuss (argue?) number of sku's, placement, pricing, inventory, etc.

Unfortunately this discipline seems to be woefully absent online. You can make categories of apps. Offer free trial versions. Provide provide Private Label apps like Verizon does. This approach is particularly complicated when you have hundreds of small developers. Apple does exert control and supervision. But all in all, these marketers are missing a real apparent understanding of consumer needs and optimal profitability.

And if you are a consumer, how do you know which ones to sample and buy. Well, the free ones require only the time and effort to download. But there is a cost to that.

Consumers can use online reviews or watch the AndroidStats Market Place rankings to see what apps are going up and what are going down in regard to downloads.

Consumers can also look to see the number of downloads that a particular apps has and the number of star ratings (similar to what CNET also provides for its downloads).

But marketers are here dealing with a totally different type of sku experience and run the risk of really confusing consumers.

According to Flurry, a market research firm that tracks mobile phone trends, the average consumer only has 5-10 apps on their phone. And that is with +100,000 apps out there. The numbers between actual consumption and the wasted online space is huge. But I guess that is what the internet can do profit per space when space is limitless.

Apple says it makes money on its App store. But you have to believe that smartphone manufacturers are leaving money on the table because they are not actively managing the consumer experience and presentation.

Now there has to be an app for that.

To sleep, perchance to dream

When Hamlet said that he was just echoing the fervent wish of millions of people around the globe.

Cephalon recognizes the issue, hence its application for Nuvigil as a pill for counter-acting jet lag. But what about the flip side. Diphenhydramine (nee Benadryl) certainly offers a safe, effective remedy but it does have some side effects.

But at what price does sleep come? In working with Nicholas Hall, I note the following critical facts:

Wide-Spread Prevalence and Rising

Insomnia is reported to affect 24%-65% of the population in the focus geographies. Since 2001, its prevalence has increased by 13% in the US alone. This rising prevalence translates into market growth for companies applying for Rx-to-OTC switches.

Consumer Preference for Self-Medication

Consumers in the focus countries are increasingly willing to self-medicate and have proven themselves to be responsible users in the past. Self-medication will only rise as health awareness among consumers increases, and this will benefit companies going for OTC switches.

Accident-Risk/Productivity Loss

Around 28% of automobile drivers in the US have fallen asleep while driving. Another study estimates 10,000 to 20,000 avoidable casualties due to accidents caused by drowsy driving in France annually. This risk to public health can be avoided by providing the public easier access to OTC insomnia drugs.

Financial Burden on National Systems

The annual cost of insomnia in the US is $42bn in direct and indirect costs. The corresponding cost for France was $1.4bn in 1999, and a similar financial burden is estimated in other countries. Easier access through OTC switching will make its prevention easier, resulting in reduced indirect burden.

Government Policy Could Reduce Its Cost Burden

Governments in developed nations have taken proactive measures to reduce the healthcare burden by switching prescription drugs available on insurance to OTC. The UK government has specifically pledged to double the number of switches in a year to ten.

The easy answer: Balanced well-regulated Rx to OTC switches. It would be great to be able to switch short-acting Ambien. Explore the possibilities of Lunesta or Rozerem.

However, the pharma and consumer healthcare would never derive the true benefits until regulatory agencies really get serious about switch. They worry about the cost burden to the government and understandably the safety aspect. But there are tools, programs and efforts that can be made. And yes, Virginia, there is an even a case for Viagra.

But, before we get active, let’s start with something we all need to function. A new, refreshing way to sleep.

Cleaning Up In Emerging Markets: Heinz and Unilever

As we start the New Year, where else does one start but with emerging markets?

The math is simple. You go where there are more mouths to feed and more rising household incomes.

Before, those rich, developed markets of the US and Western Europe carried the coal for so many multi-national firms from the 1950’s even until the 1990’s, a tremendous forty year run.

But even those great commercial dynasties eventually run out of steam. Look what happened to the Soviet Union after 68 years.

Now every business worth its salt wants to sit at the top of the table and build a new house of business out of BRICs (Brazil, Russia, India and China). And a critical way to the feast is through product quality.

Take that humble condiment: ketchup.

Mexico consumes more ketchup in the world than eight other countries. Heinz used to have a less than 1% share of the Mexican market. Odd, yes? Especially since Heinz makes really good ketchup. So what does the company do?

It buys a private label supplier of ketchup to such outlets as Domino’s Pizza, Burger King and Kentucky Fried Chicken, gains a toehold in the business and then goes on to demonstrate its product superiority. Most Mexican ketchups contain starch. So you go around doing a demo where you drop a drop of iodine on local ketchup and it turns black. Then you put a drop on Heinz ketchup and it stays red. No starch fillers. Quality wins. Heinz now has a 12% share of the market.

When I was marketing director for Unilever in Japan, we launched Domestos, the first bleach toilet cleaner. All the other toilet cleaners in Japan were acid cleaners. We did a side by side demo, running an acid cleaner down one side of a soiled tile and Domestos down the other side. The Domestos side was whiter than the streak down a skunk’s back. The other side, not so clean. Domestos became a market leader.

The lesson: The way to win in emerging markets is by demonstrating superior quality to markets hungry for better qualities of life.

A New Year's Toast To Brands

Alas poor Saab, I knew it well,

an auto of infinite pleasure, of most excellent driving,

he hath borne me in its seats a thousand times;

and now, how abhorred in my imagination it is!

My gorge rises at it. GM is to close down Saab.

When I lived in California, I used to drive my 900 Saab convertible car up into the Orange County hills and survey the David Hockney-lit valleys of opulence. I even bought my daughter the short-lived four-wheel 9-2X to navigate the frozen roads of Ann Arbor to Zingerman’s on a frigid Sunday morn.

How sad it is when a brand name dies. How many millions upon millions do companies put into the value of a name only to see it sometimes die on the vine of commerce?

In 2010, though, we will most likely see more and more value placed on brand names. Kettle Chips sells for $700 million. P&G pursues the freshening scent of Ambi Pur. Kraft looks to gorge itself on Cadbury chocolate, while Cadbury itself, like any lover of chocolate, longs for an even richer aficionado of its sweet sales.

Wherein lies the value of such names. Well, surely, a great deal of it lies in the goods it delivers, whether it is quirky driving, convenient air scenting, crispy potatoes and crème eggs. These elements go into the essence of the brand and help define it.

I was struck the other day by the comments of a friend of mine who is looking for a job. I asked what he had learned about flogging himself on the job search. He replied: be unique and be focused. A truer definition of branding has been rarely been stated. Now all that remains is for him to spend tireless energy on promotion and millions on advertising and he will land somewhere, as will Cadbury and, we hope, Saab. We feel emotional attachments to our brands, our friends, and their personalities. And that makes their value all the more dearer.

As we enter 2010, let’s hope it is a year in which brands and friends receive their just due, their well deserved value and the stewards of those brands have the wisdom and the money to carry them forward.

Social Media Heartburn

The Novartis launch of Prevacid24HR is exciting. It is a great time (just before the holidays) and who can argue with 24HR relief, taking you right through Thanksgiving dinner and into shopping on Black Friday.

But as a marketer, here is what is missing: No link to the television campaign on the consumer web site or the healthcare professional web site, and an odd sense that HCP web site is actually a bit more engaging in terms of tonality than the consumer site. Also no Twitter.

Got the Facebook page with +1,500 fans. Go Novartis. The company and its launch team is doing a really good job.

But what is missing just indicates the continuing for brand launches to have a 360 social media check list to reach out to all its different constituencies.

And of course, there is is the issue of brand imagery. In the brand brief, is it consistent across all media? Check Facebook and the different web sites and you decide.

Heartburn is what you get when your sales trajectory doesn't match up with your launch plan. Here's wishing all the best for Prevacid24HR.

Moral Hazard and Healthcare

I was at a meeting today with Charles Casparino of MSNBC, who just published his book The Sell-Out about the causes of the recent financial collapse. However, as you listen to Casparino tell it, it is a story that has been in the making for the last 30 years.

The arc of the debacle goes from Orange Country to Long-Term Capital Management to today + Lehman Brothers. In each of these instances, the US government bailed out the risk takers, eliminating any concern about consequences.

This is the moral hazard that we are all paying for now. The risk takers had no risk because the US Government was always there to provide a guarantee.
Now we also have the US Government taking on healthcare. Yes, the uninsured need to be helped. The personal consequences for them are obviously huge. The consequences for the healthcare system are equally large as more and more people use the emergency room like the waiting room of their general practitioner.

So what is the moral hazard here? Again the Government is willing to assume all the risk if it goes through with a public option plan. And we all know how that turns out, except we are now playing more directly with money and health.

Milton and Keats on Verizon's Droid Marketing Teaser Campaign

IDon’t run simultaneous apps.

IDon’t have a real keyboard.

IDon’t allow open development.

IDon’t take night shots.

Is it a bird? Is it a plane?

It is the Droid formerly known as Tao or “The Path.”

What’s in a name? Gertrude Stein said a “rose is a rose is a rose.”

And Hamlet said, “a rose by any other name would smell as sweet.”

All of this poetry goes toward the definitions of identity.

And so Verizon, in its teaser campaign for the launch of its new Motorola Android Google phone has seemingly chosen to call its phone simply: Droid and defined itself as the anti-IPhone.

Now you have to wonder if by defining yourself as who you are not is really the best strategy for defining who you are.

Look what John Milton did for Satan. He gave Satan as much charisma as Mick Jagger strutting across the stage of Saturday Night Live. Here is Satan’s entrance from Paradise Lost:

Satan with his Powers
Far was advanced on winged speed, an host
Innumerable as the stars of night,
Or stars of morning, dew-drops which the sun
Impearls on every leaf and every flower.
Regions they passed, the mighty regencies
Of Seraphim and Potentates and Thrones
In their triple degrees and regions to which
All thy dominion, Adam, is no more
Than what this garden is to all the earth
And all the sea.

Now that boy knows how to make an entrance just as much as Steve Jobs strutted the IPhone out there and made a new tao or path for mobile broadband interconnectivity.

Like Satan’s minions, the 85,000 apps that populate the web store ennobled the appeal of the IPhone and helped drive sales. Positive capability yielding positive responses and positive sales.

You have to wonder if Verizon’s negative definition of itself is the best way to drive initial interest in a meaningful long-term way.

That Bright Star, John Keats, in his definition of “negative capability” wrote: “Negative Capability is when man is capable of being in uncertainties, Mysteries, doubts without any irritable reaching after fact & reason.”

While there can be a lot of appeal in dark attraction, people more forcefully respond to the positive in marketing. The current Verizon teaser campaign can leave you wanting with its negative capability.

One can hope that when Verizon launches its new Droid later this month, the brand building will be a positive one. A true positive relationship such as the one formed between Luke Skywalker and R2D2 that will bring net access and mobile freedom to Verizon subscribers. In effect, Verizon could give its subscribers the true path or positive tao that they forsook in terms of negative imagery.

Otherwise, the sales risk, to paraphrase Percy Bysshe Shelley, will be for Ivan Seidenberg, Verizon’s CEO, to say, “I fall upon the thorns of marketing. I bleed.”

How Much Is That Compound In The Window?

THE VALUE

In the end, it all comes down to understanding the value of your pharma asset. There are two elements to Value in the SMART questions that you must ask: What are the revenues and how do you mitigate risk and preserve and realize the maximum value.

IX. What Are The Potential Revenues Associated With This Opportunity?

In developing the revenue forecast, the answers to the questions defined earlier come together to support the financial projections of a given product assessment. This information can be broken up into four key buckets:

• Target Patients (Epidemiology, Diagnosed, Treated, Access)
• Volume (Persistence, Compliance, Dosing)
• Share (Analogs, Attributes, Adoption, Penetration, Cannibalization)
• Game Changers (Event Impact Analysis, e.g. generic entry, new launches, lifecycle management).

All come together to form the under-pinning of value. Only by diligently assessing and answering the questions noted earlier lead from a well-defined set of parameters to a well-defined forecast.

These estimates can be developed using either a top-down market forecast, which is relatively easy to generate, or a more diligent bottom-up patient based forecast that requires the diligence outlined in the previous key questions.

Once the basic revenue forecast has been generated, the forecast is further adjusted to determine the risk adjusted revenue and the risk adjusted net present value (rNPV). Probabilities of success or failure are determined based on the clinical development phase of the modeled compound and probabilities are further adjusted based on the modeled compound’s Mechanism of Action (MoA) and targeted therapeutic area. The probabilities generated are applied to the revenue forecast to reflect the risk adjusted revenue.

The most well-developed and transparent set of assumptions lead to the best accepted forecast. All forecasts are wrong, the question is to which degree are they wrong. In an opportunity assessment and a product development process that can easily involve a decade, decisions are made and values accepted on the basis of assumptions and not on the numbers themselves. That’s why transparency in terms of research and results drive the acceptance of assumptions and the subsequent statement of value.

X. How Can Risk Be Managed, Value Preserved and Resources Allocated In An Optimal Way?

Once the value is defined, the recognition of risk and the optimization of resources and increase in value begin to define the on-going process of development. In an ironic byplay of development, pharma companies look to fail earlier faster in order to distribute their limited resource allocations (resources are always limited, aren’t they?) behind products that have the best chance of succeeding in the market. At any given point of time, decisions need to be made to defer, expand, contract or abandon a project. Risk mitigation also involves identifying possible partnerships, options assessments, follow-on products and portfolio synergies – all of which need to be assessed together to preserve individual project and total value for the corporation.

Sometimes, in making investment decisions, low risk projects incorrectly get precedence over “high” risk projects simply because they appear more achievable. Yet low risk projects, in unto themselves, rarely break any innovation barriers in the market. Thus, understanding how to optimize both a given product and a portfolio’s development path becomes a crucial element in decision-making.

A key element in this analysis is laying out the clinical development uncertainty measured through asset specific probabilities of technical and regulatory success (PTRS). Unfortunately, pure financial measures penalize early assets due to huge technical and commercial uncertainty, and there is no simple financial measure to directly address this issue. That’s why it is important for companies to set optimal goals to maintain viable and healthy pharmaceutical portfolio.

A useful approach to making these kinds of decisions is developing a trade-off analysis among assets in order to identify optimal optimized portfolio scenarios. This approach moves behind stand-alone valuations that are rolled up into a single portfolio of a given value. Instead, the true value of the company’s portfolio is optimized by providing an understanding of the effect of asset interdependencies on the total value of the portfolio. It is also necessary to recognize that these values are ever-changing and dynamic as events happen, and thus, portfolio values require consistent monitoring. By adopting this approach, companies can maximize and monitor movements in portfolio value and shareholder return. In so doing, the company can optimize resource allocation across portfolio assets to maximize return and minimize risk for a given level of risk aversion. This approach will also minimize future portfolio value volatility.

80% of Success Is Just Showing Up

THE MARKET

Continuing on with the 10 SMART questions, pharma companies need to ask, after defining an overall market opportunity, a pharmaceutical company needs to understand the prescribers, the competition and the regulatory environment in which it will be operating.

V. Who Are The Prescribers And What Do They Think?

With a defined patient pool, it is much easier to get a handle on the prescribers and the settings in which they operate. As product development focuses on more targeted indications, understanding the prescribers in terms of who they treat and how they treat is critical to the development of a compound. KOLs are called Key Opinion Leaders for a reason; they help shape and design evolving treatment guidelines. And practicing physicians do what they do best: they practice. Through both qualitative discussions and quantitative surveys, being able to get at those professional medical practitioner insights underlie the successful development and ultimate adoption of a given product.

VI. Competitive intensity

According to Andrew Grove, former CEO of Intel, only the paranoid survive. This is as true in pharmaceuticals as it is in computer chip-making. Clean slates are set up to keep score. Clean rooms are the battle grounds of competition. And clean hands are needed for fair fights. In an industry driven by innovation, mass production and evolving needs, the competitive intensity of existing and future markets will either unleash or damper the potential of a given product. What looks good in the current market may look less attractive in the future given competitive activities.

Like macromolecular crowding, indication opportunities appear and then narrow depending on competitive products emerging in a therapeutic space at any given point in time. This crowding results in opportunities changing in radical ways, and not always to the good. Identification of those emerging market entrants make an impact analysis necessary for defining the evolving opportunity and assessing how the commercial opportunity could possibly be reduced.
The product landscape of the future needs to be defined in terms of both direct and indirect competition. While it is important to quantify the potential impact and order of entry of competitive pipelines, it is just as important to value the impact of indirect competition, particularly in the treatment algorithm.

For example, what impact could a novel treatment for pre-diabetic patients have on the reduction of patients progressing to diabetes or what happens to second line cancer treatment therapies when a new first line treatment becomes available? Or how do you think about the diagnosis and treatment of a disease when a new test or a new bio-marker shows high degrees of correlation?

The continuing emergence of bio-markers and companion diagnostics will also revolutionize the use and the application of assets in development. As more and more companies focus on personalized medicine, they will be seeking and using biomarkers to diagnose disease risk in individual patients and appropriate companion diagnostics to assess the safety and efficacy of drugs in specific patient sub-populations. In effect, adopting the Wayne Gretsky hockey quote of skating to where the puck is going to be not where it is.

VII. What Is The Optimal Clinical Development Path and Associated Regulatory Hurdles?

As the market is being defined in terms of patients, prescribers and competitors, just getting the product on the market requires an additional level of analysis. The clinical development path in terms of defining the market differentiation based on meaningful endpoints affects acceptance by prescribers, payers as well as regulators. The analysis shapes the delta in end points that make or break a product in terms of intent to use as well as intent to prove.

Woody Allen said that 80% of success is just showing up. The regulatory pathway becomes a hurdle to just showing in the medical market space. Increased demands on safety and improved efficacy, as regulators become more conservative and shy away from risk, is significantly reducing the number of drug approvals annually. What is the thought process and guidelines will regulators use? How will the gauntlet of advisory boards be addressed? Defining that shining path through becomes an important light at the end of the development tunnel.

But Woody Allen, while a clinician of universal angst, was never a clinician who had to make life or death treatment decisions. He also said, “I don’t want to achieve immortality through my work. I want to achieve it by not dying.” Just getting regulatory approval is not enough. It is important, starting all the way back in the clinical development process, to target the endpoints that will demonstrate clinically meaningful differentiation.

And what happens if the light grows dim? Clinical development needs to also include contingency options. The various decision paths a drug can follow depends on the outcomes realized at different milestones. It is important for companies to think through and plan the various options as early as possible in clinical development to contain intrinsic value and to mitigate risk.

VIII. How Do Payers, Market Access, Pricing and Reimbursement Affect The Opportunity?

Defining the impact of market access parameters on the target patient pool and the willingness of payers to pay is not always neat nor is it nice. Whether it is the National Institute for Health and Clinical Excellence (NICE) in the UK or the various US private and public payers, the payer algorithm needs to be tightly defined and aligned with the treatment algorithm to understand product coverage, acceptance and pricing. How do these payers think? What analogs will provide a guide to that thinking? How do they value the differentiation of the science behind the product and the needs the product is seeking to address?

As if answering these questions weren’t tough enough, pricing goes into a whole new level of complexity. What should the reference price be? What is the relationship between price, formulary status, access and eventually market share? What is the optimal pharmacoeconomic value of a drug? These elements of value affect the ability to price in the market and the access available to that target patient pool depending on reimbursement.

Whether the health system is private insurance as in the US or Government as with the NHS in the UK or different governments in the EU or self-pay in emerging markets, the ability for patients to bear the cost burden is directly and crucially related to the amount of money they have available for treatment.

This issue becomes particularly complex in emerging markets where there are large patient populations that are rapidly shrunk when self-pay is taken into account. In contrast to other kinds of questions where differentiated relationships can be fairly straightforward, payers, access and reimbursement has its own unique set of complexities.

Pharma Opportunites Lie In the Eyes of the Marketer

UNDERSTANDING THE OPPORTUNITY FOR NEW DRUG COMPOUNDS

In the beginning, there is an opportunity. The challenge is figuring out how big that pie is and then how big a slice can be cut out. Providing more more thoughts on key Pharma questions that must be asked when you want to understand how big the opportunity:

I. What are the recognized and unrecognized medical needs?
In any given therapeutic area, there are a host of needs that are both known and unknown. An unmet recognized need could be associated with inadequacies associated with the current Standard of Care, offering an opportunity that could be addressed through improvements based on specific clinical endpoints. Unrecognized, unmet needs can be gleaned through conversations with stakeholders (patients, doctors, payers) and can lead to a paradigm shift in the treatment of the disease that is different from the current Standard of Care.

II. How Can We Best Address The Unmet Need?
Identifying the medical need is one thing; the ability to address that need is another. Opportunities can be on many different sides of the care equation, for example, improved efficacy in terms of ameliorating symptoms or being curative, better safety and tolerability or more convenient forms of dose administration. All of these elements factor into better initiation, compliance and adherence. Just because there is a need does not mean there is an opportunity. It is critical for companies to clearly define where and how they want to play.

III. Is the Science To Address the Unmet Needs Differentiated in a Clinically Relevant Way?
Following the characterization of the need is the science. Does the company’s science support the improved efficacy, safety or dosing truly differentiated. Over the last decade, the pharma industry has been criticized for developing me-too follow-on compounds designed to stand on the shoulders of patent expiries of blockbuster compounds and offering little in the way of true differentiation. The most powerful advantage in any business, pharmaceutical or otherwise, is the advantage of innovation. For pharma companies, innovation lies in the differentiation of the science.
There has been and will continue to be a tectonic shift from small molecules to large molecules as the science and the solution for disease cure and management becomes increasingly less productive in small molecule development. Targeting and scientific developments no longer keep pace with the commercial pressures required for success and growth in the marketplace. As a result, companies need to carefully assess how their science stacks up in the marketplace vs. existing and emerging competition.


IV. Who Is The Target Patient Pool?
Of course, there is the patient, who is waiting for the relief or the cure. Who are they? How many are there? In assessing target patient populations, both product and commercial developers many times identify a patient population that is too large, leading to over-optimistic commercial objectives and possible misappropriation of resources. The key here is to truly match the medical need with the appropriate patient pool by identifying the underlying symptoms or disease manifestations to as precise a level as possible. This accurate definition and identification of patient populations is critical to many other aspects of commercial development, e.g. clinical trials and physician targeting and messaging. When a company understands the real sub-population for a given indication and need, it is better able to accurately define the commercial opportunity.

10 SMART Commercial Pharma Questions

Have you ever played “Truth or Dare?” The first player asks “truth or dare.” If the responder says “truth,” the first player asks a question, usually embarrassing. If they reply “dare,” the questioner asks them to do something, also usually embarrassing.

In the cycle of drug development, biotech and pharmaceutical companies alike play this game internally every day. Do we move this product into Phase 3? How much is this market segment really worth? Will physicians use this product and, if so, how? Are the clinical endpoints meaningful enough for physicians to use the product vs. another standard of care? And, critically, will it be reimbursed.

Then, of course, we work in a world of limited resources. No pharma company, no matter what its size, has an infinite amount of money and resources to water through its pipeline. For individual compounds under development, they challenge is to fail early and fail fast so resources can be reallocated as quickly as possible. In addition, for an entire portfolio, whether it is for a specific therapeutic area or an entire company, management needs to understand how its decision to invest in one product vs. another affects its risk and its value.

Time and again, we have seen both big and small companies ask these questions internally. And frequently the answers are inadequate and, when confronted by the CEO, embarrassing.

It is not that the players want to be embarrassed. For them, the game is real. There are patients waiting, stockholders looking for investment returns, fellow employees rooting for a success and payrolls to be met. Most importantly, these players are smart. They have developed a drug that has real potential.

The challenge is being able to answer all the necessary questions to gain the human and financial resources to keep the project moving forward. No one owns a perfect 2400 SAT score for answering all the questions here. No one has the time and the staff to even list them all, let alone, answer them all.

When topics range from epidemiology to disease characteristics to treatment algorithms to perceptions by physicians and payers, the ability to assemble, synthesize and develop critical observations and insights can challenge the skills of any Merit Scholar.

In order to assist companies with these kinds of analyses, toward understanding the Opportunity, the Market and the Value, Manu Bammi and I have developed 10 Smart Questions that must be asked in order to truly understand opportunities and win the game.

THE OPPORTUNITY
In the beginning, there is an opportunity. The challenge is figuring out how big that pie is and then how big a slice can be cut out.
I. What are the recognized and unrecognized medical needs?
II. How Can We Best Address The Unmet Need?
III. Is the Science To Address the Unmet Needs Differentiated in a Clinically Relevant Way?
IV. Who Is The Target Patient Pool?


THE MARKET
After defining the pie, a company needs to ask itself if who is going to serve the pie and who are they going to have to fight with to get their fair share of that pie.
V. Who Are The Prescribers And What Do They Think?
VI. What Is The Competitive intensity?
VII. What Is The Optimal Clinical Development Path and Associated Regulatory Hurdles?
VIII. How Do Payers, Market Access, Pricing and Reimbursement Affect The Opportunity?

THE VALUE
There are two elements to Value in the SMART questions that you must ask: What are the revenues and how do you mitigate risk and preserve and realize the maximum value.
IX. What Are The Potential Revenues Associated With This Opportunity?
X. How Can Risk Be Managed, Value Preserved and Resources Allocated In An Optimal Way?

THE END-GAME
To paraphrase Dr. Seuss, oh the places you will go and the things you will see by seeking to answer these ten questions. By understanding the Opportunity, the Market and the Value in this kind of a rigorous and diligent way, companies can adapt the best industry practices that have proven to be successful. From the simple questions to the mature play of truth or dare, answering these questions are a game that major pharmaceutical and biotech companies cannot afford to lose.

Invective Is As American As Apple Pie

Invective is as American as apple pie.

Early in September, the Supreme Court looks to hear new arguments about its decision to overrule the 1990 decision of Austin vs. Michigan Chamber of Commerce, a decision which upheld corporate restrictions on corporate spending to support of oppose political candidates. The issue is how far campaign finance laws, including McCain-Feingold, can go in regulating campaign spending by corporations.

The current case involves a negative documentary about Hillary Clinton called: Hillary, the Movie. The movie was funded by a conservative group that lost a lawsuit with the Federal Election Commission (FEC) when it wanted to distribute the movie on video-on-demand. (The movie is available on the internet and on DVD.) A lower court supported by the FEC.

What’s the current tempest in this judicial teacup? Well, McCain-Feingold focused on broadcast transmissions and did not include “old media” such as books. If this movie is banned from the air, what’s to say that books can’t be banned as well – a logical extension, no?

Whether or not you agree with the points made in the movie about Hillary Clinton is not the issue. The issue remains the First Amendment right of Free Speech, a point that is as old as the US republic.

Thomas Jefferson, an eminent Federalist wrote, was “a mean-spirited, low-lived fellow, the son of a half-breed Indian squaw, fathered by a Virginia mulatto father.” Of course, no one challenged Barack Obama’s lineage and birth place during his recent election campaign (as ridiculous as those charges may have been).

John Binns, a Philadelphia editor, published the “Coffin Bill” which accused Andrew Jackson, during his first presidential campaign, of having recklessly killed six soldiers who were supposedly deserting. The handbill featured six individual coffins. Nothing on the Swift Boat group that attacked John Kerry here.
And how did Andrew Jackson manage such situations. He brought Francis Blair in from Kentucky to edit the Washington Globe and support Jackson’s own policies.

If you want more fuel to add to the historical fire you can read Paul Boller Junior’s book on presidential campaigns. But the point is throughout American history, powerful well-monied groups have tried to influence politics by spending money in the media.

While it will be fascinating to see how the Supreme Court decides, the issue itself is chilling.

We continually advocate for free speech in our media and in our communications and in our advertising and in our efforts to understand and communicate with consumers and patients.

Any attempt to restrict absolute freedom of communications is an absolute restriction of a basic American freedom and infringement of an American right to access, knowledge, information and free decision-making.

Whether what was said was right or not, Jefferson did well, Jackson got elected, as did Obama and Hillary Clinton is Secretary of State. Democracy and freedom of information does win out in the end, whether it is new media or old.

Mad Men in the Caves of Lescaux

There are no fat people in Egyptian hieroglyphics making the walls of the Pyramids the first editions of Vanity Fair. The Caves of Lescaux feature 364 horses, a veritable car lot for prehistoric transportation.

So simple even a Caveman can buy Geico insurance. Or from a Gecko. Or from Kash, the googly-eyes sitting on a band of money.

Let’s hand it to the Mad Men at the Martin Agency.

And let’s remember Leo Burnett, at whose eponymous agency were developed the Jolly Green Giant, the Pillsbury Doughboy, the Marlboro Man and Tony the Tiger.

Visual icons have been compelling sales for centuries.

Like those three hung spheres of the pawn broker that originated from the Renaissance House of Lombard.

This then is the real legacy of Don Draper, not the haunted childhood of a Depression-era birth that led to the development of line extensions for London Fog given the saturated American market for rain coats.

Advertising symbols and iconography have been with us since the dawn of commerce.

A show like Mad Men taps into the modern sensibility of irony of both the commercial and home work place as well as the creation of advertising commerce. This sense of irony is centuries old. My former professor, Wayne Booth, at the University of Chicago, published A Rhetoric of Irony that illustrated this skein of observation and characterization, even those sometimes those ironies lack a stable referent.

However, for predecessors of the modern anguish and anxieties of Geico’s caveman, you don’t have to look any further than Tony the Tiger or the Jolly Green Giant.

In 1956, Burnett said that advertising did its best work by impression, and he encouraged his staff to identify those symbols, those visual archetypes, that would leave consumers with a "brand picture engraved on their consciousness."

Now, if we really want to go further back to when the Jolly Green Giants and Tigers roamed the earth, we can rest in the Caves of Lescaux, where like Plato’s Cave, horses were hawked like Fords on Friday Nights.

Le plsu c’est meme, le plus c’est change. The way in which you view the world may change, but the way of the world doesn’t. Let’s all enjoy a new season of Mad Men and pay tribute to a commercial nature that has never gone out of fashion.

A Text From Last Night.Com

I have received a lot of feedback on my post about monetizing my mother. People wrote asking if she was really on Facebook, Twitter and LinkedIn. Well, the answer is no. She is not. As I noted, it was just a dream. But the reality and the number of responses I received are not a dream.

Many people were struck by the idea of using social networking to build their business. Well, yes, of course, that is the point.

Social networking, all the online points of contact available, are ways of making mass marketing even more one-on-one communications. The best point is that these are true conversations.

Your customers can twitter you their ideas (and their complaints) and you can twitter them back your acknowledgment of their issue. You can even follow-up with them. Test new ideas and products with them and receive immediate feedback.

There used to a truism that for every complaint letter you got about your product, there were seven other unsatisfied people. With all the tools at our disposal now, you can talk to all eight.

If the humorous x-rated reality of textsfromlastnight.com is the zeitgeist of the 17-29 year old demographic, marketers still have a lot of catching up to do in terms of developing "real" dialogues. I won't tell you what Windex is really good at cleaning, but the product placement is priceless.

All this back and forth is so much more intimate and immediate than focus groups, snail mail and even web sites.

The challenge, as always, is in building the tools and the tonality. Here, tonality is critical because the conversation is so immediate. So it is the marriage of voice and insight. It was the same creative challenge as presented in the sixties (viz. Mad Men). But I don't think marketers have fully recognized the opportunity yet.

And oh, by the way, my Mom does have a cell phone. Need I say more?

Lessons of The Dormouse, Tide Detergent and Grace Slick

Unilever's second quarter earnings report shows volumes up and profits down due to a reported combination of lower margins, higher finance and tax costs and an increase in pension costs.

New CEO Paul Polman (formerly of P&G) has reversed the former strategy of raising prices of former old Unilever CEO Patrick Cescau. Good move just in advance of a recession. I wonder if Pat also goes surfing just before the tsunami comes in.

So what are we doing here? Buying share? Fighting private label?

Unilever's brands are Ben & Jerry's ice cream, Dove soap, Lipton tea and Hellman's mayonnaise (all staples in my house). These brands are quality stuff and Polman's move marks a return to getting these well-branded goods back into the global pantry.

When I was at Unilever we always sold things a little cheaper because they weren't quite as good performance-wise as P&G's products (with the exception of Wisk and Dove), but they were certainly better than Private Label. Hopefully, these moves by Polman and his team only mark a short-term move to get momentum back into the business because those power brands now form the foundation of the Unilever business are The Goods.

(I should also note that all those brands I mentioned, except for Lipton Tea, were acquisitions. What happened to the Unilever detergent business? Sold.)

The Wall Street Journal notes that, in South Africa (a critical revenue-generating country for Unilever), the local company launched a lower-priced version of Surf laundry detergent to compete against a low-priced local competitor.

Meanwhile, in the US, P&G has rolled out Tide Basic, a lower performing version of Tide that costs 20% less.

Ouch. Those actions are two moves guaranteed to make your Brand Equity look dingier.

Over the long run, the best way to compete with Private Label is to keep innovating on performance, ensuring that consumers really understand the value proposition of what they are buying. At SmartAnalyst, we are in the process of conducting a series of consumer surveys on attitudes toward Private Label and, guess what, people like brands.

Let's hope that, for P&G and Unilever, the Innovation Cupboard isn't bare. In Lynne Banks The Indian in the Cupboard, there was always a new magic trick to save the day until the Indian and the Cowboy had to go back in time.

Maybe those two great companies can still pull a white (not a dingy) rabbit out of their respective hats. Otherwise, they may be joining Grace Slick in a chorus of

When logic and proportion are sloppy dead,
and the white knight is talking backwards
and the red queen's off her head,
Remember what the dormouse said,
Feed your head, Feed your head.

That is where insight yields innovation.

Will Someone Please Monetize My Mother

Will someone please monetize my mother?

Now here's the dream: My mother is on Facebook, Twitter, LinkedIn, iGoogle, telling everyone where she is going, who she is seeing, what is wrong with Obama and figuring how much she will really save by splitting her pills to stretch the bucks and to still get some medical benefit.

What a goldmine she is.

If Medtronic or somebody else would just insert a GPS in her neural network in addition to her insulin pump, they would receive such a wealth of information: Not just her glucose levels and A1Cs, but what she is doing, where she is going and how it is affecting her.

We could sensor her life.

The future of understanding our patients/consumers belongs to both the physical sensors of the home (what cabinets are being opened, what doors are being closed and what pills are being taken) and the communication tools available for talking with and to those same people.

If all of my mom's health suppliers, from the pharmaceutical manufacturers to the device suppliers to the media tunnels, banded together, they could all more efficiently monetize my mother's needs and give her a healthy, preventative, treated life.

Now that is evidence-based medicine.

New Kindling For The Fires of Healthcare

I love my Kindle. It has changed how I read -- in fact, I read faster, in more places, with a greater diversity of topics.

The ability to download and carry a small New York Public library of books is amazing.

On Metro-North I read War and Peace (the new translation) one-handed while standing (try that, even in paperback). At the car repair shop, while getting my Subaru tuned, I was able to fine tune my thoughts about Andrew Jackson's presidency. And, sitting by the pool, I basked in the sun while exploring Bleak House.

The device is far more friendly to read from than my net book. And, though the internet browser is not very robust, the 3G reception is excellent.

Now what if everyone had such a device. How much easier would it be to carry around your health records, research different health states, even reach out and touch a medical professional?

Maybe webmd or Pfizer or Aetna could offer a free Kindle to everyone to help manage and answer their healthcare issues.

Okay, I confess, I was also reading Chris Anderson's Free, which I downloaded free on my Kindle.

Wouldn't a Kindle be a great freemium for healh care.

I need to ask my doctor about this.

As the cost of health care continues to rise and the government and private enterprise seeks to manage it, let's let the information and the patient devices be fee and allow the procedures and the drugs to cost what they need to cost. The more you know, I bet the more judicious the use will be.

Now that's some kindling to light the fire of healthcare.

One piece of birthday cake too many

Ever have a parent or a friend end up in the emergency room with a heart attack?

In the US, chronic diseases account for more than 75 cents of every dollar spent on healthcare, and are the #1 cause of death and disability.

Yet the amount spent in the US on prevention is $10 per person. That is about the cost of my monthly no-frills gym membership.

An ounce of prevention here is worth a pound of cure.

We can only hope that the new healthcare bill wending its way through the halls of Congress will put more of an incentive behind prevention and wellness.

As we see, the best way of moderating the cost of interventional healthcare is not to use it at all.

According to the Almanac of Chronic Disease, 4 out of 5 Americans would rather spend on preventive measures than on treating diseases after detection. Then how come my gym wasn't very crowded today? I bet there were more people at the local ER than on the elliptical this afternoon.

Let's hope that Congress gets the message and allocates more money to improve the health literacy and the coverage of the average American.

There are 46 million good reasons (the number of uninsured in America) to give more people coverage and that gym membership.

Sonia Sotomayor: Please Free the iPhone

Back in 1984, oh, all of 25 years ago (which is about the age of many iPhone users), Stewart Brand, at the first Hacker’s Convention, said, information wants to be free.

That truism has continued to be borne out over the intervening years, as company after company struggling to monetize their information and web sites. The foamy successes of some web-based successes (I will include Google, FaceBook, Wall Street Journal here) lord it over the wet troughs filled with so many failures (just too many to list).

So what about that lovely iPhone, the newly classical kouros of mobile phones?

Why is it stilled tied to one carrier? Because that was the deal that Apple made with AT&T.

Now consider the irony here:

Part of the marvelous success of the iPhone is its software architecture that allows so many applications to be created for it. The monetized Apple store is a cornucopia of creative uses digitized to mobile broad band.

But the iPhone itself? Tied to one carrier in the US. (But not overseas).

Where are the FTC and FCC when you really need them?

Capitalism is a wonderful thing in that here some manufacturers can decide what they want to sell and how they want to sell it.

I am sure that Apple knows it will sell more devices if it adds additional carriers like say my carrier, Verizon (hint, hint).

Mobile broadband will be the Next Big Thing. And if mobile broadband devices are to be truly successful than they need to be free to follow the airwaves like a bird.

(Come to think of it, how come there are now mobile phones named after birds?)

If the US government can own General Motors, why doesn’t it just take over Apple and free the iPhone? Oh yeah, Apple is making money. Well, then what are the FTC and FCC good for? What about Supreme Court decisions on Interstate Commerce?

I just got Sonia Sotomayor’s iPhone cell number. I think I will give her a ring just before her hearings.

Science advances one funeral at a time

I am going to with Max Planck and James Montier of the Financial Times.

Planck said that “science advances one funeral at a time.”

So we can now safely see that the Efficient Market Theory is dead. As we know, the EMH theory postulated that all information is reflected in current market prices. Well, as we slog our way through this financial meltdown with economic lava pulling at our heels and ankles, we recognize that the EMH theory holds less water than my grandmother’s sieve.

Hmmn, now what about clinical trials? We all would hesitate to say that science advances one funeral at a time, even though that is what sometimes happens. Max never worked at a pharmaceutical company nor was he a clinical investigator. However, his view reflects the dark underside of participating in a clinical trial.

I have recently been ruminating on rheumatoid arthritis for a client. The variability of results for the clinical trials for different drugs is astounding and confounding. As a result, it is critical to evaluate each Randomized Clinical Trial in the context of demographic and baseline disease characteristics of each population as no two trials have similar patient populations, even with similar designs.

Unfortunately, there is still a lot of suffering out there in RA. There are 4.5 million cases of RA in the US, EU and Japan, with 200,000 new cases diagnosed every year. Treatment goals in RA are reduction in signs and symptoms, prevention of structural damage, and induction of remission. Nothing is going to stop the pain, but, with the drugs currently available, methotrexate, Enbrel, Remicade, Humira, etc., sufferers can still enjoy a reasonably good of quality of life.

The other good news is that the pipeline of new drugs is very active with some promising new drugs.

The challenge, though, is that there is no efficient market theory. Even with all the information available, the heterogeneity of the disease itself and the diverse patient population and their individual sufferings indicate that there is no one drug cures all.

Chewing on The Cost of Living

The numbers don’t jibe with the vitriol.

Pharmaceutical companies are the general public policy whipping boy of choice for rising healthcare costs, even though drugs represent only 10% of the country’s national health care bill.

Yet, according to a Dartmouth Medical School's Institute for Health Policy and Clinical Practice, 76% of Americans blame the drug makers for the high costs. Oh, by the way, that is after those drug makers have spent over $1 billion to bring a single drug to market according to all the guidelines and “suggestions” made by the FDA.

And what about doctors and hospitals who account for 52 percent of all national health spending? Just 59% of respondents named hospitals, and 47% percent named doctors as major spending culprits. (Percentages add up to more than 100% because respondents could select as many factors as they wanted.)

There is a real disconnect between the perception of who is increasing costs and those who are actually doing it.

It is kind of like going to grocery store and complaining about rising food prices. After you go to the pharmacy, oay for those pills and then put them in your mouth, you are chewing on the cost of living.

It is so much harder to criticize or revile the costs of the doctor who is managing your chronic diabetes or high blood pressure or the hospital who is taking care of you after your angioplasty or appendectomy.

Those people who are working at Pfizer, BMS, Merck, GSK et.al do not get a free pass. And this point of perception is precisely where pharmaceutical marketing communications break down. When you need Valtrex or Flomax or Lipitor, those DTC ads are great motivators. But when you want to communicate the overall value proposition of prescription products or the industry, life sciences still struggle in developing the consumer/patient insights necessary to represent value. Here, a spoonful of the right sugar would help make the medical expenses go down.

The challenge is translating those needs and insights into getting consumers to understand the cost/ratio benefits of development and consequent patient relief or mitigation or survival.

Evidence-based medicine, costly procedures and interventions, quality of life. The actuarial buzzwords can chill the spine as fast as an epidural.

It is important, though, to spend much more time on the marketing related to get consumers/patients to understand the cost of chewing on living.