Monday, February 12, 2007

Pharma Should Go Bollywood, Not Hollywood

A recent article in The Scientist suggested that the "answer to stagnating R&D can be found in the creativity of the movie industry" (see "Why Pharma Must Go Hollywood").

Interestingly, I wrote about the analogy between pharmaceutical marketing and sales and how Hollywood back in August, 2005 (see "Movies and Drugs: Same Blockbuster Mentality"). My thoughts were based on an article in the New Yorker critical of the Hollywood blockbuster model. My premise was that if it isn't working very well for Hollywood, it won't work very well for the pharmaceutical industry.

It turns out that maybe the way Bollywood -- as the movie industry centered in Mumbai (aka Bombay) India is referred to -- does business may be a better model for the pharmaceutical industry to follow, even R&D-wise.

Cheaper Tickets
The cost of tickets in the movie industry is analogous to the cost of drugs in the pharmaceutical industry.

Movie tickets for Bollywood films in India are the cheapest in the world. According to an article in the Wikipedi encyclopedia, "Bollywood sold 3.6 billion tickets and had total revenues (theatre tickets, DVDs, television etc.) of US$1.3 billion, whereas Hollywood films sold 2.6 billion tickets and generated total revenues (again from all formats) of US$51 billion."
NOTE: Bollywood makes more money in after-sales of music CDs from films than from ticket sales. Perhaps the pharma industry should pay more attention to its CD/DVD sales. Big pharma companies -- the ones who invented the drug in the first place -- should continue to sell the patented drug as a generic or over-the-counter (OTC) product after the patent runs out.
Lower Development Costs
How come so cheap? Bollywood budgets are usually modest by Hollywood standards.

"The average cost of producing, marketing and distributing a Hollywood film is more than US$60 million though a Star Wars or Harry Potter costs around $100 million and only one out of ten succeeds. At the same time Shekhar Kapur’s ‘Paani’ which is tipped to be the costliest film ever to be made in Bollywood will cost $20 million and the average cost of a big movie is around $ 5 Million." ("Bollywood vs Hollywood - The Complete Breakdown")

If the pharmaceutical industry could bring the cost of developing a new drug down one-third (from an industry-estimated $800 - $1,200 million per drug), then it too may be able to lower its ticket price and get more needy (eg, under-insured) Americans into theatres (doctors' offices).

5 comments:

  1. An interesting observation but your analogy is shaky. I'm lucky enough to live in a part of the UK that has a strong and vibrant Asian community. Their food is great, they are friendly and hard working folk and their girls are the prettiest on Earth. But their films are, well, different.

    I guess you can say that they are refreshingly free of violence, nudity, bad language, special effects or overly sophisticated plot lines, which is maybe why they just don't appeal to Western (or maybe just my) sensibilities.

    So whilst I agree that there's a lot to be said for pricing yourself back into the market, I do prefer my cough medicines to be glycol-free, if you get my drift.

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  2. Balle balle John - a great post co-relating Bollywood style to pharma. However, the cost of medicines is low in India thanks to the multiplicity of brands and the numerous manufacturers.

    What hits a visitor to India is the enormous diversity and the underlying unity. When can we have the pleasure of your visit to India, Mr. John? Take a break - come to India. You will never see the world again the same way. India will shock you, astonish you, puzzle you, annoy you; yet you will like India. Visit www.incredibleindia.org And my ph. no. is 9980800023

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  3. Though Im no expert on the subject, I think apart from the pharma companies greed, it is the change in pay scales and labour costs that is causing the huge difference in costs.
    If a business model exists that might work in the pharma industry it would be similar to outsourcing software though the quality of the R&D would be hard to match.
    Bollywood's lower cost in producing movies compared to Hollywood has nothing much to do with its business model - infact I think it is murky and inefficient.

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  4. Outsourcing drug research is happening as we speak. Ranbaxy just out-licensed its second small molecule (a statin). Just like the financial sector found that it was cheaper to outsource a lot of back end ops, Pharma is rapidly discovering that its equally lucrative to either in-licensing from India or set up wholly owned subsidiaries doing pre-clinical development.

    These are interesting times both for Indian Pharm, Pharma policy and global R&D.

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  5. Is bollywood is relying on hollywood as far as good scripts are concerned?

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