New Year, New Product

By Lloyd Graff

The Food and Drug Administration (FDA) makes it almost impossible for a small company to develop an effective drug and bring it to the marketplace.  It’s one of the main reasons drugs are so expensive in the United States and introduction of new drugs is so slow.

Yet once in a blue moon a relatively small pharma company, living on borrowed money and borrowed time, defies all the odds and slithers a potential blockbuster drug through the laborious regulation, testing, and lawsuits of fat pharma that wants to squash potential competition, and dashes to the finish line.

This happened a few weeks ago when Amerin Corporation’s Vascepa won expanded approval for heart patients, not only with elevated triglycerides but also for diabetics and millions of other Americans with elevated cardiac risk.

This is after Pfizer, which makes Lovaza, the current favorite artificial fish oil capsule (which I have taken for 10 years) has sued them, and the FDA has taken its sweet time to get the tests done to expand its recommended use for the majority of heart patients who currently take statins.

The first statins came out 30 years ago and have probably given heart patients worldwide hundreds of millions of extra years of life.  Fish oil and synthetic versions have also helped, but the reduction of cardiac events shown by this fish oil substitute with some kind of secret sauce developed out in left field called Vascepa has stunned and confused the complacent drug companies and probably the FDA, which may explain why it has taken so long to get it into the mainstream pharma world.

Yet this is typical of innovation. It almost always starts in a garage or workshop as an idea.

I think of Google boys, Larry Page and Sergey Brin, who had no money after leaving Stanford in 1996 but had some goofy ideas about how to make the internet more useful for people.  Sergey asked his future sister-in-law Susan Wojcicki, who had a home with a garage near the campus, if they could camp out in it and keep their computers there.  Susan, who is now in charge of YouTube, probably said, “Sure, but clean up when you’re done.”  Soon after Google was born.

Innovation is still coming from little people, tinkerers, creators who just hope they can solve a problem, make something better, or invent something cool.  Often they are doing it not to make a mint of money but because they get satisfaction, joy, maybe a sense of fulfillment.

YouTube started that way, so did WhatsApp and Instagram.  All were gobbled up by Google or Facebook long before they generated a profit because folks like Larry Page and Mark Zuckerberg know the value of a great idea even in its nascent state.  So did Tim Cook at Apple when he paid a billion dollars to Dr. Dre for his earbuds and fledgling music service, which were a great idea but a mediocre product before Apple put its name and technology behind them.

Big companies are generally lousy at innovating but good at improving manufacturing and marketing.

I was reminded of innovation when I read on the PMPA (Precision Machined Products Association) listserve a request by a reader of the Swarfblog, Randy Lusk.  Randy had a part he wanted to run on a Miyano BNE-51SY, and he wanted to shave the part.  His research indicated there was no tool sold that would do this so he was thinking of improvising with a 62H Slitters Shave he used on a 1-3/4” 6-spindle Wickman multi-spindle automatic.  He figured it would work if he could build a base to allow it to fit the Miyano.

If there isn’t a product on the market, “well, there ought to be, so I’ll make it,” is the mindset of a guy like Randy and a myriad of other folks in the precision machining community.

If you take the macro view, this is what the Chinese are not good at, and they know it.  Their approach has been, “If we don’t have it, steal it.”  This approach can be very useful in the short run, but it is a failure long term unless America continues to allow them to steal technology in exchange for access to their market.  An educational and political system which preaches conformity and orthodoxy at all costs ultimately collapses, I believe.

To Chairman Xi in China, trade issues can be negotiated, finessed, and circumvented.  For him, the existential problem facing China is the desire for freedom exhibited by the people of Hong Kong.  If he sends in the tanks and mows down the protesters, China will be seen as a hapless butcher that fears its citizens.  It will be another Tiananmen Square disaster.  And protest could spread to the mainland.  If he lets it continue to burn and gain strength in Hong Kong it could spread to Macau and then to the mainland.

He has a huge problem going into 2020, and the U.S. should do nothing to help him with it. They haven’t been trained in China to adapt old shave tools to modern equipment.

They also don’t know how to deal with dissent.

Question: What new thing have you created?

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3 thoughts on “New Year, New Product

  1. Lloyd GraffLloyd Graff

    Happy Healthy New Year to the readers and fans of The Blog.
    It is such a joy to create it and share with you. Be well. Lloyd

     
  2. AvatarJames Hanna

    Lloyd, your comments about innovation are right on the mark. Every once in a while a big company will find a way to support innovation by setting up a small subsidiary or department and letting them pretty much go their own way. A couple of notable examples have been Lockheed and its Skunk Works, developers of the SR-71 and other extreme developments in aerospace technology, and IBM’s research laboratories, which have been responsible for it often generating more patents in a year than any other company in the world. Unfortunately, senior management in most large companies are too timid, too ignorant, and too much control freaks to allow such groups to exist. Most actively discourage innovation. Pharmaceutical companies of any size are also stuck in a “Damned if you do, Damned if you don’t” situation with testing since their products can do great harm as well as great good, and all the effects are not always immediately apparent during testing. Even when terminally ill patients are willing to take a chance on a new product that is in its early stages of testing, and has signed release of liability documents, if the trial fails and the person dies, the funeral flowers will not yet have wilted before an ambulance chaser is on the heirs doorstep, offering to dry their tears with a big wad of cash. The big companies can afford a large fleet of really good attorneys who can keep moving the case through the courts until they find a sympathetic judge or jury, but cash strapped small operators generally can’t afford that. The big companies will also do all in their power to derail a small company that seems to be on the path to a major breakthrough that might cut into sales of one of their products, as you illustrated with your Pfizer example. The FDA keeps a tight rein on domestic producers, yet allow generics from outside the US to enter with little or no testing. My wife is on her third brand of generic Losartin in the last year as they have been found to be contaminated or otherwise out of specification, and now her latest brand has been recalled. Good, thorough, long term testing will always be necessary for medical products to ensure safety and efficacy, but legal protections are needed for manufacturers to allow willing patients with no other hope early access to products without undue risk of lawsuits.

     
  3. AvatarSeth Emerson

    I admit that in my working career, I was mostly a problem solver. I could size up a situation and figure out a way to make things work. Way before I retired, I was running a small business supplying hard to find parts to classic car owners, filling a niche that nobody else was. The innovation I brought to this was “figuring out” how to get a big business to supply parts to my tiny customer base. As James mentions above, most big businesses are risk averse. (That is how they stay in business). My goal was to figure out how to remove, or, at least, lessen their risk. Usually that involved absorbing some or all of that risk – enough to get a buy-in. At the volume level I have been operating, (pretty small) that is acceptable. I have been lucky enough not to have to “Bet the farm”. At age 72, I have become “big-risk” averse. That’s how I stay in “business”.

     

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