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Pharma and Profits: Balancing Innovation, Medicine, and Drug Prices
High-level commentary on various facets of the pharmaceutical industry from a key leader in the field
This book clearly explains the value that the pharmaceutical industry offers to society which is often underreported against the more negative topic of high drug prices. It also offers an overview for drug discovery and development professionals, highlighting the challenges that such drug hunters should be aware of when developing new drugs. Case studies to illustrate topics like hepatitis C, mRNA vaccines, insulin, and price controls are included to aid in seamless reader comprehension.
Written by John LaMattina, former president of Pfizer Global Research and Development and well-known speaker and writer for the pharma industry, sample topics covered and questions explored within the work
Fiscal consequences of curing hepatitis C mRNA vaccines and the race for a cure Why the government does not deserve a piece of Biopharma’s profits Paying for drugs whose ultimate value is unknown The impact of reduced revenues on R&DThis book is a must-read for biopharmaceutical professionals and executives who wish to gain high-level insight into key challenges that must be first understood, then overcome, within the pharmaceutical industry.
This book clearly explains the value that the pharmaceutical industry offers to society which is often underreported against the more negative topic of high drug prices. It also offers an overview for drug discovery and development professionals, highlighting the challenges that such drug hunters should be aware of when developing new drugs. Case studies to illustrate topics like hepatitis C, mRNA vaccines, insulin, and price controls are included to aid in seamless reader comprehension.
Written by John LaMattina, former president of Pfizer Global Research and Development and well-known speaker and writer for the pharma industry, sample topics covered and questions explored within the work
Fiscal consequences of curing hepatitis C mRNA vaccines and the race for a cure Why the government does not deserve a piece of Biopharma’s profits Paying for drugs whose ultimate value is unknown The impact of reduced revenues on R&DThis book is a must-read for biopharmaceutical professionals and executives who wish to gain high-level insight into key challenges that must be first understood, then overcome, within the pharmaceutical industry.
108 pages, Kindle Edition
Published June 1, 2022
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Displaying 1 - 3 of 3 reviews
August 11, 2023
The American healthcare system is largely characterized as a dysfunctional, discontinuous web of bad actors all preying on sick Americans. In this narrative, no one gets more flack than pharmaceutical companies, who have been (erroneously) painted as purely exploitative capitalists by politicians (particularly by outspoken politicians like Sanders/AOC) for the high prices of drugs.
In Pharma and Profits, John Lamattina concisely addresses some of the common, oft-misguided narratives around drug pricing. For example, it is common for politicians to criticize Elli Lilly for insulin costs, claiming that insulin was discovered over 100 years ago and that pharmaceutical companies have not innovated but are just exploiting patients. But as Lamattina explains, this is not true. The insulin you can buy at your local drug store is most likely an analog of human insulin that has been refined for biological stability, and are typically convenient for patients to inject themselves with at home. All this is in stark contrast to the genetically engineered insulin that was in circulation for decades. This innovation however comes at a cost (in terms of $) and in cost of capital - hence the high price of insulin.
Another argument is that politicians assert that drugs are too expensive, and routinely quote the list price of drugs to illustrate this. Again, Lamattina believes this is incorrect - as drug manufacturing is A) Incredibly expensive and the B) The list price is not the net price, a fact that is often obfuscated thanks to the presence of insurers and pharmacy benefit managers. According to Lamattina, if you judge the profitability of the biopharmaceutical industry relative to other industries (e.g by P/E ratio, profits/revenues), the pharmaceutical profits collective profits are typically in the median when compared to other industries.
Lamattina also has a counter-argument to the common assertion that biotech/pharma don’t innovative themselves, but typically use publicly-funded science “starting material” for drug development. Precisely, the argument you’ll hear parroted by many Democrats is that the NIH/NSF funds a large body of research (via academia), and therefore should have the right to A) negotiate drug prices or recoup their investments (I guess in a manner similar to VCs?), and that drugs shouldn’t be this expensive. Of course, while academia does make many of the original discoveries (e.g with genome editing, gene therapy etc…), academia’s bar for innovation is quite low. For example, the amount of capital needed to take genome editing to a drug for beta thalassemia is ~hundreds of millions to a billion $. Any scientist knows this. Furthermore you rarely hear this argument made in the space of technology for example (no one expects Apple or Google to pay up for transistor or lithium battery innovations that have been made within academia). Tangentially, I am slightly tempted to agree with the now famous proposition by AOC and Aaron Kesselheim on the US government funding biotech companies, by taking equity in exchange, therefore acting as venture capitalists.
Altogether, this is a fantastic book. I think even the casual reader with no background in drug development will find plenty to learn from here. In conjunction with The Great American Drug Deal by Peter Kolchinsky, this is one of the most cogent and necessary defenses of the industry I’ve ever read.
In Pharma and Profits, John Lamattina concisely addresses some of the common, oft-misguided narratives around drug pricing. For example, it is common for politicians to criticize Elli Lilly for insulin costs, claiming that insulin was discovered over 100 years ago and that pharmaceutical companies have not innovated but are just exploiting patients. But as Lamattina explains, this is not true. The insulin you can buy at your local drug store is most likely an analog of human insulin that has been refined for biological stability, and are typically convenient for patients to inject themselves with at home. All this is in stark contrast to the genetically engineered insulin that was in circulation for decades. This innovation however comes at a cost (in terms of $) and in cost of capital - hence the high price of insulin.
Another argument is that politicians assert that drugs are too expensive, and routinely quote the list price of drugs to illustrate this. Again, Lamattina believes this is incorrect - as drug manufacturing is A) Incredibly expensive and the B) The list price is not the net price, a fact that is often obfuscated thanks to the presence of insurers and pharmacy benefit managers. According to Lamattina, if you judge the profitability of the biopharmaceutical industry relative to other industries (e.g by P/E ratio, profits/revenues), the pharmaceutical profits collective profits are typically in the median when compared to other industries.
Lamattina also has a counter-argument to the common assertion that biotech/pharma don’t innovative themselves, but typically use publicly-funded science “starting material” for drug development. Precisely, the argument you’ll hear parroted by many Democrats is that the NIH/NSF funds a large body of research (via academia), and therefore should have the right to A) negotiate drug prices or recoup their investments (I guess in a manner similar to VCs?), and that drugs shouldn’t be this expensive. Of course, while academia does make many of the original discoveries (e.g with genome editing, gene therapy etc…), academia’s bar for innovation is quite low. For example, the amount of capital needed to take genome editing to a drug for beta thalassemia is ~hundreds of millions to a billion $. Any scientist knows this. Furthermore you rarely hear this argument made in the space of technology for example (no one expects Apple or Google to pay up for transistor or lithium battery innovations that have been made within academia). Tangentially, I am slightly tempted to agree with the now famous proposition by AOC and Aaron Kesselheim on the US government funding biotech companies, by taking equity in exchange, therefore acting as venture capitalists.
Altogether, this is a fantastic book. I think even the casual reader with no background in drug development will find plenty to learn from here. In conjunction with The Great American Drug Deal by Peter Kolchinsky, this is one of the most cogent and necessary defenses of the industry I’ve ever read.
May 22, 2023
A quick and interesting read. Through roughly 10 different anecdotes, this book examines the high cost of drugs in America. Without needing deep scientific knowledge, the reader can easily follow basic economic concepts about why prices and profits are the way they are. The author sufficiently defends the costs and risks associated with drug R&D. There’s some finger-pointing at other parts of the healthcare system (for right or wrong), but I didn’t find that this diminished the author’s arguments.
June 3, 2023
I really don’t disagree with the conclusions, but this book is largely one-sided in its treatment of the biotech/pharma industry. The logic is very defensive and overly concerned with general critiques of the industry. A better book would have been more descriptive on the drug development and commercialization process and allow the reader to be an active participant in concluding what the author has already concluded from the get-go.
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