The Industry Veteran some time ago decided that the only decent career path left in pharma was that of whistleblower. He has more evidence to back his case. Here’s the Veteran’s restrained take on the matter.

Here’s another piece of evidence to support my argument that whistleblowing represents the most promising career path for a young person starting out in the biomedical industry. Biotechs such as Genentech, Amgen and the other large ones are an especially fertile venue. The avaricious ambitions of senior executives and their accompanying desire to mimic the Big Pharma operations tend to alienate both the scientists and the commercial people who were originally attracted to the biotech side of the drug discovery business. These increasingly disgruntled coworkers can provide excellent leads into illegal practices that the enterprising whistleblower can use to his/her advantage.

The current Genentech whistleblower held the job of medical science liaison or MSL. The medical science liaison position (also called health science associate, clinical liaison and other terms by various companies) remains especially advantageous for launching a whistleblowing career. The MSLs and their otherwise designated counterparts are hybrids who combine a sales function with that of clinical trials missionaries. Their putative function consists of discussing clinical trials with curious and knowledgeable practitioners. This gives them considerably more leeway in their interaction with physicians than that given to sales reps who are restricted to discussing information appearing on the current labels of existing products. In an effort to foster the appearance that MSLs serve a scientific and educational function, their departments report up to the medical affairs operations of the respective companies, rather than to sales. As part of the same illusory effort MSLs are relieved of responsibilities for delivering samples. Nor are they evaluated by measurements used to calculate bonuses for sales reps, such as market shares or sales volumes within their assigned territories. As a result the MSL people are held in high contempt by the great majority of their sales rep colleagues.

An acquaintance at Abbott Laboratories recently told me about some of his work as an MSL. He plies his trade on behalf of the company’s rheumatoid arthritis product, Humira. In this capacity he recruits influential and high prescribing rheumatologists to conduct redundant clinical trials (see  the article from 2 January Washington Post on “superfluous medical studies”). His effort serves several purposes. In the first place, the trials provide an acceptable cover for paying high volume prescribers to use the Abbott product. Marketers call this practice “buying market share,” the rest of us term it bribery. Secondly, by using influential and high prescribing practitioners to run these humdrum trials, the payoffs also exert a trickle down effect. Smaller fry, garden variety physicians develop their product preferences partly by following the usage patterns of acclaimed authorities in their geographic areas. Information about influential colleagues in the neighborhood who are conducting trials for a particular product, typically spread by the sponsor’s sales reps, sends a clear message to the vast number of follower physicians. Both the payoff and the trickle down functions are then enhanced when the sponsoring company hires the investigator-physician to speak to the small fry at dinner meetings and symposia.

Approximately a year and a half ago, my acquaintance was attending a rah-rah session at Abbott headquarters with his associates. The director of MSLs started out by voicing an obstreperous defense of the operation under his leadership and its contribution to Humira sales. “Don’t let anyone tell you,” the director exhorted his underlings, “that we don’t contribute to the top line.” As he advanced to the next PowerPoint slide, he emphasized the fact that MSLs had accounted for $78 million of added Humira sales during the recently ended quarter. Before anyone in the audience could inquire about the particular ass from which the director pulled that number, the company’s CEO, Miles White, jumped to the center of the presentation dais and used his body to block out the slide. In an enraged tone White pointed his finger at the startled MSLs and told them to forget they had ever seen such a slide or heard their director’s last comment. It seems White was immediately aware that his director’s effort to justify the continuing existence of an MSL department tore down the fictive Chinese wall by which the Pharma companies seek to separate their educational and scientific communications from crass selling.

In such an environment, I plaintively ask, is not whistleblowing the most noble calling?

The Industry Veteran, who’s opening the year on quite the tear, has been pondering the latest “trend” in the pharma marketing chatter — the idea that Pharma needs to follow the Hollywood model. Here are his thoughts:

Here’s an interesting article from John Mack’s Pharma Marketing Blog that appeared last summer. In drawing an analogy between Big Pharma and  Hollywood, Mack claimed the drug industry should learn from the Hollywood studios and substantially alter their distribution strategy. According to Mack and a few other industry strategists, the studios understood that their largest revenue segment doesn’t come from movie theaters, but instead from DVDs.  In response they started pushing movies onto DVDs within a matter of weeks after the open in theaters. More important than the revenue from theater distribution, movie appearance in those outlets, and the supporting TV ads, function to build word-of-mouth for DVD sales.

Mack and others in the industry develop some useful insights, although John is actually a bit outdated in his description of movie industry dynamics. The share growth of home sales/DVDs has slowed in favor of view-on-demand.  Both Comcast and the dish-satellite companies have tried to sign deals with the studios to show movies in their view-on-demand services within a few weeks after theater openings. The studios want to make these deals but they have hesitated for fear of antagonizing Wal-Mart. Nevertheless, Mack argues that just as Hollywood creates greater revenue through an alternative distribution strategy, Big Pharma could do the same by pushing its drugs to move more quickly into generic and OTC status while the Pharmas acquire ownership of the generic and OTC companies.

This altered distribution scheme is another approach to a demand sensitivity argument by which higher volume and lower prices will net out at a larger total revenue for the industry. The idea of enhanced compliance is the New Year’s buzz in Big Pharma. Brad Sheares, the president of Merck’s US Human Health division, told his reps that he would ask them to support DTC promotions stressing the importance of filling prescriptions and finishing the entire package. In the current era of fewer new molecular entities, Pharma finds that too many written scripts fail to generate revenue because uninsured and underinsured patients can’t afford the high cost. In this scheme of things, Big Pharma’s push for generics won’t compete with the high-priced, branded products that will make their generous returns on investment within their first several years after launch. Instead the older, unconscionably priced brandeds that scream for price controls will give way to affordable generic versions.

Mack’s use of the Hollywood model for distribution dovetails neatly with Larry Ellison’s notion of a Hollywood analogy for product development. Ellison is the CEO of Oracle and he claims that Hollywood provided a precedent for Big Pharma decades ago when it decimated the big studio approach to producing movies that it used from the 1920s through the 50s. The studios since that time have become the financing, marketing and distribution infrastructures for independent producers. Ellison suggests that Big Pharma should learn from its elders. 

I suppose the Big Pharma company that has most definitively gone Hollywood in both product development and distribution is Novartis, which is now the largest generic company in the world. Of course all the Big Pharmas have signed scores of drug development deals in the past few years with the counterparts of independent movie producers: biotechs and startups. It’s probably no accident that Novartis, a Swiss company, has adopted a banker’s/financier’s model for Pharma. Its crosstown rival in Basel, Hoffmann-LaRoche, has even truncated the marketing portion of this financing-marketing-distribution model by decimating the marketing function. Unwilling to sustain the fixed SG&A expenses of other Big Pharmas that employ tens of thousand of reps, Roche partners out the marketing-selling activity for any primary care product that falls its way.

If Big Pharma does go Hollywood and contracts out most of its present functions, a new type of personality would have to prevail in the industry. The sort of imperious, arrogant ignoramus who now runs the Big Pharmas (McKinnell at Pfizer, Hassan at Schering-Plough, Miles White at Abbott, J.P. Garnier at GlaxoSmithKline) would have to be replaced by far more anonymous, benign bean counters, much the way that Hollywood’s Louis B. Mayers and Harry Cohens yielded in favor of their forgettable successors. The mid-level managers in Big Pharma are currently small, politics-playing, risk reducing, follow-the-leader types who can barely do their jobs and seek to avoid any original thoughts for the duration of their careers. That would have to change and they would need to be replaced by fast-moving sharks along the lines of the Ari Gold character on HBO’s Entourage.

Yes, I can see it now, on the bottles of blood pressure medication…Eli Lilly and The Ligand Company, in Association with Amgen and American Pharmaceutical Partners, bring you an Anadys discovery of a Cleveland Clinic renin inhibitor: Epericel…”and the vasculature was renewed.”

Coming soon to a drugstore near you, or call your MCO’s mail order house.