<ul class="summary-list"><li>In 2022, billionaire Shark Tank investor Mark Cuban set up a no-frills, low-cost online pharmacy.</li><li>Since then, Mark Cuban Cost Plus Drug Company has amassed more than 2,000 offerings, mostly generics.</li></ul><p><a target="_blank" class="" href="https://www.businessinsider.com/category/mark-cuban">Mark Cuban</a> is on a mission to upend Big Pharma.</p><p>In early 2022, Cuban founded <a target="_blank" class="" href="https://www.businessinsider.com/walgreens-mark-cuban-cvs-prescription-drugs-prices-cost-plus-model-2024-1">Cost Plus Drugs</a>, a discount pill-mailing service that promised to take some of the bloat out of America's pharmaceutical system by delivering drugs to consumers at lower, more transparent price points.</p><p>Here's how it works: Cost Plus Drugs, as the name implies, gets drugs directly from manufacturers, cutting out the pharmaceutical middlemen and their extra costs. You pay a 15% markup to Cost Plus Drugs, plus a fixed $5 for labor on each medication and $5 for shipping.</p><div type="image" title="three workers in a pharmacy setting" height="4000" width="6000" msid="112197854" hostid="261" sizebytes="504712"></div><h2 id="3e039770-7726-4e4b-88ba-a535ea447cba">Typically, drug pricing is clear as mud</h2><p>Take <a target="_blank" class="" href="https://www.businessinsider.com/untold-story-of-viagra-doctor-dropped-pants-at-urology-conference-2020-2">Viagra</a>, for example. How much will a name-brand, 30-day supply of the biggest dose of the "little blue pill" (100mg) cost you? Great question. It could be anywhere from around $2,000 to upwards of $3,000, without insurance. A generic form of the same 30-day supply might start somewhere around $250, but can also exceed $1,000.</p><p>Cost Plus tells consumers that it pays the manufacturer $3 for that same 30-day supply of 100mg generic Viagra tablets. It slaps on a 15% ($0.60) markup, plus $5 for "pharmacy labor" and voila: a 30-day supply of sildenafil citrate for $8.60 (plus shipping and taxes).</p><p>The company has over 2,000 drugs on offer this way, mainly generics. It's everything from unbranded Crestor (about $6-7 a month, plus shipping) to silver burn cream for wounds (approximately $10-11 per tube). You can replace a trip to the pharmacy with a few minutes of computer time: create an online account, then connect with your doctor who'll place your prescription order electronically.</p><p>Cuban, the veteran <a target="_blank" class="" href="https://www.businessinsider.com/mark-cuban-says-leaving-shark-tank-after-season-16-2023-11">Shark Tank investor</a> and billionaire part-owner of the Dallas Mavericks, isn't necessarily expecting his mail-order pharmacy to make him millions of dollars richer. Rather, his goal with Cost Plus, he <a target="_blank" class="" href="https://youtu.be/apTsCDNgXF4?si=3LeTw5angPJlNgTZ&amp;t=63">says</a>, is to change the "game" of <a target="_blank" class="" href="https://www.businessinsider.com/how-education-healthcare-childcare-got-so-expensive-feeling-it-now-2023-4">drug pricing</a>.</p><p>"We are completely transparent, with the same price for anyone and everyone," Cuban told Business Insider via email. "We believe that when all data is transparent, then the market becomes efficient. At that point, prices will drop significantly."</p><h2 id="8c89cb9b-aec1-4e9f-a7e1-c4bec00f2500">Importing $15 penicillin to compete with $500 shots from Pfizer is just the beginning</h2><div type="image" title="pills" height="1414" width="2119" msid="112197849" hostid="261" sizebytes="192698"></div><p>Cost Plus has been bullish about its ultimate ambitions to end the secretive, uneven world of <a target="_blank" class="" href="https://www.businessinsider.com/big-pharma-companies-taxes-american-billion-dollar-profits-drugs-healthcare-2023-8">US drug pricing</a> altogether. And it's increasingly stepping out of the generic world and going after big, brand-name drugmakers like Pfizer and Novo Nordisk.</p><p>Earlier this year, <a target="_blank" class="" href="https://www.costplusdrugs.com/mission/">the company</a> started up a manufacturing plant in Texas aimed at alleviating drug shortages, and this summer it inked an import deal with a Portuguese pharmaceutical brand to<a target="_blank" href="https://x.com/costplusdrugs/status/1813620177852060145"> bring</a> cheaper penicillin shots to clinicians in the US, who've been dealing with a surging nationwide <a target="_blank" class="" href="https://www.businessinsider.com/gonorrhea-syphilis-cases-out-of-control-in-us-std-expert-2022-9">syphilis</a> outbreak that has completely cleaned out the US supply.</p><p>Normally, Pfizer is the only American manufacturer of the specific shot in question, called Bicillin L-A, but they've been in short supply on that medication for over a year. For now, the US Food and Drug Administration is allowing Cost Plus to import Portuguese penicillin to the US [$15], but only until Pfizer's [~$500+] supply comes back out of shortage, likely in early 2025.</p><p>"We are going to try to do the same thing for any med that is in shortage where we feel we can save patients a material amount of money," Cuban said. And he didn't outright dismiss my idea that the same could be done in the future for chemotherapy medications, or GLP-1 weight loss shots like Wegovy, which have both been in severe shortages for many months.</p><p>"Where we can find a high-quality source that meets all regulatory requirements, we will do our best to import them," he said.</p><h2 id="3f43f5a0-16b8-41cb-92c1-88cc4f3e7937">1 regulatory change that would bring down healthcare costs across the board</h2><p>Over the next decade, he expects Cost Plus to add more branded medications, and also move into "high-end specialty therapeutics."</p><p>But he also acknowledged his strategy can only go so far, without firmer regulations, aimed at showing consumers what drugs actually cost to produce. If he had his way, Cuban says that every healthcare provider, pharmacy middleman, or "any affiliated in any way company" would be required to "publish their un-redacted contracts, for all to see."</p><p>"Prices could drop 30% across all of healthcare in a year," he said. "Transparency would end all the payment games."</p>

We asked Mark Cuban how he's going to disrupt Big Pharma. He said it's pretty straightforward, actually.

<p><span style="font-weight: 400;"><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Getty</span></p><p class="caption">The pain reliever Advil is one of the well-known brands that Pfizer is spinning off as part of a new collaboration with fellow drugmaker GlaxoSmithKline.</p></div><p></p></div></div></span></p><ul class="summary-list"><li><span style="font-weight: 400;">The large drugmaker Pfizer is spinning off some of its best-known brands, including Advil, ChapStick, Robitussin and Emergen-C</span></li><li><span style="font-weight: 400;">The Wednesday announcement is part of a new partnership with United Kingdom-based drugmaker GlaxoSmithKline</span></li><li><span style="font-weight: 400;">The move will put more emphasis on more unique, complex medicines, which Pfizer has sought to emphasize</span></li></ul><p><span style="font-weight: 400;">The large US drugmaker Pfizer will be spinning off some of its best-known products, including Advil, ChapStick, Robitussin and Emergen-C, as part of a new partnership with UK pharmaceutical company, GlaxoSmithKline. </span></p><p><span style="font-weight: 400;">The two companies are combining their consumer health units, which brought in nearly $13 billion in sales last year, in an all-equity deal, and plan to later make the combined entities an independent company, they announced on Wednesday.</span></p><p><span style="font-weight: 400;">The products involved in the deal are familiar pharmacy names, sold over-the-counter, meaning no prescription is necessary. </span></p><p><span style="font-weight: 400;">But that may well be part of the point: The shift will put more of a focus on the companies' other medicines, including more unique, complex prescription drugs, which have higher margins. </span></p><p><span style="font-weight: 400;">Pfizer, for example, has sought to emphasize its pipeline of new <a href="https://www.businessinsider.com/pfizers-cancer-drug-combination-trials-with-immunotherapy-and-targeted-drugs-2018-5">medicines in development,</a> projecting up to 15 potential blockbuster approvals between 2017 and 2022, including five cancer drugs. </span></p><p><span style="font-weight: 400;">The drugmaker has also been trying to sell its consumer health unit since last year, and announced in July a reorganization to separate the business out from other units, including its "science-based Innovative Medicines business."</span></p><p><span style="font-weight: 400;">Critics have also called on GlaxoSmithKline to sell its consumer health business for years, without any luck, Hargreaves Lansdown analyst George Salmon said. </span></p><p><span style="font-weight: 400;">"The separation will take away the steady cash flows of the consumer business, meaning there's more pressure on the men and women in white coats to deliver the next generation of blockbusters," Salmon said about GlaxoSmithKline. But the company can also shift "significant" debt onto the consumer business, "and thus buy valuable time for the pipeline to deliver."</span></p><p><span style="font-weight: 400;">Combined, the two companies' consumer health units are expected to <a href="https://www.businessinsider.in/pharma-giant-glaxosmithkline-signs-mega-deal-with-pfizer-that-could-change-the-face-of-global-healthcare/articleshow/67161477.cms">dominate the space,</a> with 7.3% of the global over-the-counter market, the largest share, and the top or second-best market shares in the U.S. and all other key areas, according to a financial filing.</span></p><p><span style="font-weight: 400;">The joint venture will additionally include Pfizer's</span> <span style="font-weight: 400;">heartburn medication Nexium 24HR and the multivitamin Centrum, a Pfizer spokesperson said, and GlaxoSmithKline's sensitivity toothpaste Sensodyne, anti-inflammatory product Voltaren and the pain reliever Panadol.</span></p><p><em><span style="font-weight: 400;"><strong>Read more:</strong> <a href="https://www.businessinsider.com/pfizers-cancer-drug-combination-trials-with-immunotherapy-and-targeted-drugs-2018-5">Pfizer executives are changing their tune on an approach for a promising new way to treat cancer, and it could be where the field is headed</a></span></em></p><p><span style="font-weight: 400;">It won't include Pfizer's Viagra Connect product, which is sold over-the-counter in the United Kingdom, or other Pfizer over-the-counter medications like Diflucan, Feldene, Ponstan, Pivalone, Sab Simplex, Ibupirac, Gelucil, Becosules and Corex, according to the Pfizer spokesperson. </span></p><p><span style="font-weight: 400;">The United Kingdom-based GlaxoSmithKline will have a majority interest in the new venture, or 68% in equity, while Pfizer will own a smaller, 32% stake, with the right to a portion of earnings and dividends. The deal is expected to close in the second half of next year.</span></p><p><span style="font-weight: 400;">GlaxoSmithKline plans to spin the combined units off into an independent, publicly-traded company within five years of the deal closing, though it can decide whether to do so and when, according to the press release. </span></p><p class="tagline">Get the latest Pfizer stock price<a href="http://markets.businessinsider.com/stock/pfe-Quote"> here.</a></p>

Why two huge drugmakers are spinning off iconic brands like Advil, ChapStick and Emergen-C and their nearly $13 billion in sales

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>AP</span></p></div><p></p></div></div>If you've ever come across an ad claiming that it can sell you a "generic" version of the little blue pill, you've probably dismissed it as bogus.</p><p>But scam ads for Viagra, which is prescribed for erectile dysfunction, aren't the only thing that you should steer clear of. Any company that claims it can sell you a cheaper, generic version of Viagra is lying, a recent post in the <a href="http://well.blogs.nytimes.com/2016/07/25/is-generic-viagra-legitimate/?_r=0">New York Times' Well blog points out</a>.</p><p>Why? Because a true generic version of the drug hasn't been made available yet. The <a href="http://www.bloomberg.com/news/articles/2013-12-17/teva-to-sell-generic-viagra-in-2017-in-pfizer-settlement">earliest you can likely expect one</a> is 2017.</p><p>That means that for now, "any pharmacy that's offering generic Viagra is probably using counterfeit product that's not approved," Carmen Catizone, the executive director of the National Association of Boards of Pharmacy, a professional organization unaffiliated with drug makers, <a href="http://well.blogs.nytimes.com/2016/07/25/is-generic-viagra-legitimate/?_r=0">told the Times</a>.</p><p>It's important to keep in mind, though, that true generic versions of drugs save lives.</p><p>In general, generics are a wonderful thing - they're a lower-cost alternative to expensive, brand-name versions of drugs. In 2010 alone, generics <a href="http://www.fda.gov/drugs/resourcesforyou/consumers/buyingusingmedicinesafely/understandinggenericdrugs/ucm167991.htm">saved the US healthcare system roughly $158 billion</a>, or about $3 billion each week, according to the US Food and Drug Administration. These drugs aren't <a href="http://content.healthaffairs.org/content/30/7/1351.full">just saving money</a>: Without them, millions of people around the globe would not be able to afford the medications that they need to survive life-threatening conditions like diabetes.</p><p>In the US, generics can exist for several reasons. First, companies that produce generics don't have to pay for advertising; they're also not forced to repeat expensive clinical trials of new drugs. Plus, a handful of companies will <a href="http://www.fda.gov/drugs/resourcesforyou/consumers/buyingusingmedicinesafely/understandinggenericdrugs/ucm167991.htm">typically all get approved to make a generic at once</a>, which ideally creates competition in the marketplace and can sometimes result in even lower prices for those drugs.</p><p>The reason there's no generic Viagra yet is because Pfizer, the company that makes it, <a href="http://www.forbes.com/sites/investor/2013/12/20/pfizers-expiring-viagra-patent-adversely-affects-other-drugmakers-too/#3538db8a7f3f">holds two patents for the drug</a>: the first for Viagra's composition (which expired in 2012), and the second for what's called a "method of treatment," (i.e. how the drug is used). That one doesn't expire until 2020. But the story doesn't end there.</p><p>The drug company Teva Pharmaceuticals USA plans to sell a generic version of Viagra in the US in 2017. How? By <a href="http://www.bloomberg.com/news/articles/2013-12-17/teva-to-sell-generic-viagra-in-2017-in-pfizer-settlement">entering into an agreement with Pfizer</a> that allows it to enter the market early in exchange for paying patent royalties to Pfizer through 2020.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/science-swallow-pills-properly-easily-2015-8">Scientists have discovered the best way to take pills</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="B3dXRudjotwtxpewzsfdCc1tAyJtomsr" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

The 'generic' version of this popular drug could be dangerous

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Shutterstock/Sean Nel</span></p><p class="caption">A lucky accident for Pfizer.</p></div><p></p></div></div></p><ul><li><strong>Viagra, LSD, and pacemakers weren't intentional discoveries. Often, world-changing discoveries happen when someone finds something they aren't looking for.</strong></li><li><strong>Sometimes, these discoveries are the result of a true accident, but often they are the result of someone realizing a material can be used in a new way or for a different purpose.</strong></li><li><strong>Even if there's an "accident" involved, it still takes a person to realize the potential of that "accident" for it to matter.</strong></li></ul><p>Some scientific discoveries come about after painstaking, goal-oriented lab work finally yields the result that a researcher is trying to find.</p><p>But many of the most incredible discoveries in world came about when someone found something they weren't looking for.</p><p>In some cases, these are the result of a true accident. Lucky accidents have allowed people to discover unexpected but useful side effects from drugs, which is what happened with Viagra. Saccharine - the artificial sweetener in "Sweet'N Low" - was found by a Russian chemist who forgot to wash his hands after a days work.</p><p>Perhaps more often, world-changing discoveries are the result of a creative mind realizing that a material or invention could be repurposed into something incredible.</p><p>In many of these cases, the researchers behind the discovery wouldn't call their finding a true "accident," since it took a prepared mind to follow through and turn that discovery into something useful. But what was found wasn't what was being looked for in the first place.</p><p>Desperation or the need to figure out a new use for a product can always help too, as it did for the inventor of a dough intended to clean soot from people's homes. A switch away from coal to gas removed the need for such a cleaning clay. But it turns out that shapeable clay makes a great and profitable toy: Play-doh.</p><p>None of these "accidents" would been the world-changing discoveries they are without the right person there to recognize their value. But they show that the best innovations can come from the unexpected.</p>

18 accidental and unintended scientific discoveries that changed the world

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Shayanne Gal/BI Graphics</span></p></div><p></p></div></div></p><ul><li><strong>President Donald Trump has been making a stink about drug prices, <a href="http://www.businessinsider.com/trump-singles-out-pfizer-in-drug-pricing-tweet-2018-7">claiming a win Tuesday night</a> when Pfizer deferred its plan to increase the prices of 10% of its medications. </strong></li><li><strong>But it remains to be seen how Pfizer's move will impact patients still facing high prescription drug costs. </strong></li><li><strong>Here's all that goes into the price patients are paying when they get to the pharmacy counter. </strong></li></ul><p>President Donald Trump is on a crusade to lower prescription drug prices. </p><p>In May, the Trump administration laid out a <a href="https://www.hhs.gov/sites/default/files/AmericanPatientsFirst.pdf">44-page drug-pricing blueprint,</a> calling out middlemen in the pharmaceutical industry and "freeloading" by other countries that pay less than the US for prescription drugs.</p><p>That came to a head on Tuesday when New York-based pharmaceutical giant Pfizer said that it's deferring the price increases it planned to take on some of its prescription drugs following a conversation between its CEO Ian Read and Trump.</p><p>Trump <a href="http://www.businessinsider.com/trump-singles-out-pfizer-in-drug-pricing-tweet-2018-7">had singled out the pharmaceutical giant</a> earlier in the week over its recent price hikes. Pfizer had increased the price of about 40 of its 400 products, <a href="https://www.ft.com/content/265c2012-7d9d-11e8-bc55-50daf11b720d">including Viagra,</a> as of July 1. Pfizer <a href="http://www.businessinsider.com/regeneron-raised-price-on-one-of-its-drugs-2018-7">wasn't the only drugmaker</a> to raise the price of its drugs, though it was one of only a handful to raise prices on drugs for a second time in 2018. </p><p>"Pfizer &amp; others should be ashamed that they have raised drug prices for no reason," Trump said in an initial tweet.</p><p>Pfizer will now return its drugs to their initial price before July 1. Trump broadcast the move in a tweet, in which he characterized it as "rolling back price hikes, so American patients don't pay more."</p><p>But it begs the question: how will American patients benefit from this? </p><p>To start, Pfizer's move on Tuesday was to defer its planned price increases, not cancel them altogether. Should the Trump administration fail to get its <a href="http://www.businessinsider.com/what-trump-is-going-to-say-about-lowering-drug-prices-2018-5">drug-pricing plan</a> off the ground by the end of the year, Pfizer will go ahead and increase the prices of the drugs.</p><p>"The company will return these prices to their pre-July 1 levels as soon as technically possible, and the prices will remain in effect until the earlier of when the president's blueprint goes into effect or the end of the year - whichever is sooner," Pfizer said in a statement.</p><p>Analysts, for their part, didn't see this decision as having much of an impact on Pfizer's overall business, especially because the increases weren't very big - though analysts at Morgan Stanley did call the decision to defer the price hike as "surprising."</p><p>And, as Wells Fargo analyst David Maris noted, Pfizer's move could impact what happens to other drugmakers' price increases.</p><p>"For example, will Merck's Keytruda price increase from March or AbbVie's Humira's 19% price increase over the past two years be next? And what did Pharma get in exchange for this Trump win?" Maris wrote Wednesday. "To us, we believe the administration's and other key legislators' focus is not only on drug pricing, but on the overall supply chain and delivery system, including drug rebating, co-pay coupons, etc."</p><p>But as a whole - especially for patients who might need reprieve from high prices - there's skepticism about the impact Pfizer's decision to defer will have. </p><p>"It's all sizzle and no steak," Craig Garthwaite a professor of strategy at the Kellogg School of Management at Northwestern University told Business Insider.</p><p>Americans are facing high prescription drug prices, and the list price a drugmaker sets is just one component of a complicated system in which a handful of companies are involved. <span style="background-color: #ffff00;"></span></p><p>In fact, as many as five different companies influence the price of a medication from start to finish.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Shayanne Gal/BI Graphics</span></p></div><p></p></div></div></p><p>It begins with the drugmaker who sets the initial price of the medication. From there, a wholesaler responsible for distributing the drug to hospitals and pharmacies gets a cut of the price for its services.</p><p>The pharmacy provides the drug to patients for a certain amount based on factors such as what insurance the patient has or how far along that person is towards hitting their deductible, the amount of money paid out of pocket before insurance kicks in.</p><p>Afterward, a pharmacy benefit manager, which is responsible for negotiating lower drug prices and managing the pharmacy networks, pays back the rest of the medication's cost, ultimately getting reimbursed by an insurer. </p><h2>Does it have to be this way?</h2><p>Unless a patient isn't insured or hasn't hit their deductible, they won't face the full list price. In response to pricing criticism, <a href="http://www.businessinsider.com/johnson-and-johnson-drug-pricing-breakdown-net-list-price-2018-3">drug companies have started</a> breaking out how much their prices have increased at a list and net level, after factoring in rebates and discounts. For example, the list prices of diabetes medication insulin have been increasing, but at a net level - the amount drugmakers actually take home - <a href="http://www.businessinsider.com/insulin-prices-increased-in-2017-2017-5">prices have fallen</a>. </p><p>It's led to drug companies and pharmaceutical benefit managers <a href="http://www.businessinsider.com/phrma-report-on-percent-of-americans-paying-full-list-price-2017-3">pointing fingers at one another</a> to assign blame for why Americans are experiencing high drug prices.</p><p>In a March speech, <a href="http://www.businessinsider.com/fda-commissioner-scott-gottlieb-drug-pricing-insurers-2018-3">FDA Commissioner Scott Gottlieb in a speech to health insurers pointed out</a> how "everybody wins" in the healthcare system, except patients.</p><p>"We're living in a world where financial toxicity is a real concern for patients. And every member of the drug supply chain needs to take responsibility for addressing it," he said.</p><p>One of the solutions: passing rebates along straight to patients. </p><p>In March, the biggest health insurer in the US, UnitedHealthcare, said that starting in 2019, some of its members on high deductible plans would be eligible to <a href="http://www.businessinsider.com/ap-unitedhealthcare-to-pass-drug-rebates-on-to-some-customers-2018-3">get rebates for their medications</a>. So, for example, if a patient went to the pharmacy for a medication that under their high deductible cost $600, that might get lowered to $300 after factoring in the rebate the insurer receives. Gottlieb on Wednesday called the move a "potentially disruptive step."</p><section data-track-content="" data-post-type="post"><div data-piano-inline-content-wrapper=""><p>Trump also singled out the <a href="http://www.businessinsider.com/trump-drug-pricing-speech-impact-on-pharmaceutical-drug-rebate-2018-5">middlemen in the pharmaceutical industry</a>, including pharmacy benefit mangers that negotiate lower prices from drugmakers in the form of discounts and health plans that receive those discounts.</p><p>"We're very much eliminating the middlemen," Trump said. "They became very, very rich. They won't be so rich anymore."</p><p>Ultimately, Pfizer's decision to defer its price increases could end up have little impact on ordinary Americans. January 1, 2019 could roll around, and if Trump's blueprint is in place, those prices could keep going up, leaving consumers in the same spot they are right now. And so far, seeing others be singled out in a tweet <a href="https://twitter.com/megtirrell/status/1016769284025016320">hasn't stopped drugmakers</a> from increasing the prices of their own medications.</p></div></section>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/nobel-winning-economist-says-non-competes-are-keeping-wages-down-for-all-workers-2018-6">A Nobel Prize-winning economist says 'non-competes' are keeping wages down for all workers</a></h3>        <div>                    </div>    </div>

Trump just claimed a win in cutting back prescription drug prices, but the reality of high drug prices is a lot more complicated

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>REUTERS/Luke MacGregor</span></p><p class="caption">Pfizer CEO Ian Read is going after Allergan Plc.</p></div><p></p></div></div>Allergan Plc, the drugmaker known for its best-seller Botox, agreed to <a href="http://www.businessinsider.com/pfizer-allergan-deal-tax-inversion-2015-10">merge with</a> pharmaceutical giant Pfizer Inc. in a $160 billion deal.</p><p>The company, which was recently created as a combination of Actavis Plc and Allergan Inc., appealed to Pfizer in part because of how it could help <a href="http://www.businessinsider.com/pfizer-allergan-deal-tax-inversion-2015-10">cut the drug giant's tax bill</a>. Pfizer is known for making blockbuster drugs Viagra and Lipitor. </p><p>Here's the story of how Allergan went from a small Los Angeles company known for making eye-drops to an Ireland-domiciled drug giant to 2015's biggest takeover target.</p>

How Allergan went from a tiny Los Angeles eye care company to the biggest takeover target of 2015

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>REUTERS/Luke MacGregor</span></p><p class="caption">Pfizer CEO Ian Read is going after Allergan Plc.</p></div><p></p></div></div>Last week, Allergan Plc, a drugmaker known for its best-seller Botox, said it is in the beginning stages of talks to merge with pharmaceutical giant Pfizer Inc.</p><p>The company, which was recently created as a combination of Actavis Plc and Allergan, is the obvious acquisition target for Pfizer, if only because it would <a href="http://www.businessinsider.com/pfizer-allergan-tax-inversion-2015-10">help cut the drug giant's tax bill</a>. Pfizer is known for making blockbuster drugs Viagra and Lipitor. </p><p>Here's the story of how Allergan went from a small Los Angeles company known for making eye-drops to an Ireland-domiciled drug giant with a market value of $123 billion, and potentially 2015's biggest takeover target.</p>

How Allergan went from a tiny Los Angeles eye care company to one of the biggest takeover targets of 2015

<ul class="summary-list"><li><strong>Insider spoke to <keyword id="323507" type="PERSON" weightage="60" keywordseo="Spike-Lee">Spike Lee</keyword> about politics and his four-decade career.</strong></li><li><strong>The filmmaker also spoke about why he has decided to support disgraced filmmaker <keyword id="2076831" type="PERSON" weightage="60" keywordseo="Nate-Parker">Nate Parker</keyword>. </strong></li><li>"I'm not spending any of my time left...trying to argue with someone and change their mind," he said. </li></ul><p>There is perhaps no filmmaker better positioned to speak to the current political climate than Spike Lee.</p><p>The 63-year-old New Yorker has spent almost four decades as the film world's most outspoken auteur. Just last summer, his 1989 masterpiece "Do The Right Thing" was again atop every watch list with audiences stunned by the stark similarities between the deaths of Lee's fictional character <a href="https://www.insider.com/spike-lee-posts-short-film-following-george-floyd-death-2020-6">Radio Raheem and George Floyd</a> in Minneapolis at the hands of law enforcement.</p><p>So, it was incredibly fortuitous that just days before Insider was scheduled to speak with the legendary filmmaker, Congress had just <a href="https://www.businessinsider.com/republicans-objecting-to-electoral-votes-in-congress-live-updates-2021-1">concluded a joint session to confirm</a> former president Donald Trump's second and historic impeachment following the <a href="https://www.insider.com/trump-stupporters-capitol-mob-video-2021-1">violent insurrection at the Capitol</a> a week prior.</p><p>"Oh, that does not surprise me," he said calmly. "White supremacists have been doing this for years. I mean, what we saw was what was called back in the day: a lynch mob. This is not new.</p><p><em><strong>Read more:</strong> <a href="https://www.insider.com/best-spike-lee-movies-everyone-should-watch">The 16 essential Spike Lee movies everyone should see - including his latest film 'Da 5 Bloods'</a></em></p><p>"And every person of color knows or has said to another person of color if that had been Black and brown people trying to do that, the bodies would have been stacked," Lee added.</p><p>When asked whether he thought Trump, a former mainstay of the Manhattan socialite scene, could return after his presidency, the stalwart New Yorker replied: "No, he can't come back here."</p><p>"I don't think he's coming back. He's not going to get a warm welcome, especially in the people's republic of Brooklyn," Lee continued. "No extended arms, no hugs, no love. No love."</p><h2>Lee, who's an executive producer on Nate Parker's 'American Skin,' said he jumped at the chance to support the filmmaker</h2><div type="image" title="Spike Lee, Nate Parker" height="4290" width="6435" msid="80423267" hostid="261"></div><p>Lee is currently in the midst of what could be described as a late-career boom. His <a href="https://www.businessinsider.com/spike-lees-blackkklansman-is-his-best-movie-in-years-2018-8">2018 film "Blackkklansman"</a> earned him his first competitive Oscar. His latest film, <a href="https://www.insider.com/da-5-bloods-cinematographer-most-memorable-scenes-moments-2020-6">"Da 5 Bloods," out last year,</a> is currently buzzing around the awards circuit, his concert film of David Byrne's Broadway show "American Utopia" has been hailed as one of the year's best, and last week he became the 34th recipient of the American Cinematheque Award. </p><p>But the director is currently on the press trail to promote the work of another filmmaker: Nate Parker. Lee is listed as an executive producer on Parker's new political thriller "American Skin" and accompanied the director to Venice late last year to premiere the film. </p><p><em><strong>Read more:</strong> <a href="https://www.insider.com/david-oyelowo-nate-parker-deserves-second-chance-2020-12">David Oyelowo says 'Birth of a Nation' director Nate Parker 'deserves a second chance' after a rape scandal halted his career</a></em></p><p>The film, which was written and directed by Parker, follows an army vet named Lincoln "Linc" Jefferson (also played by Parker), who witnesses the shooting of his teenage son, Kijani (Tony Espinosa), by a white police officer during a routine traffic stop.</p><p>"This film was made, what, two years ago ... but it's still topical. You know why? Because Black and brown peoples are still being killed in the United States of Americam" Lee said. "That was topical with 'Do the Right Thing.' So, this is a continuation."</p><h2>Lee said he understands if people can no longer support Parker, whose career stalled after rape charges resurfaced </h2><div type="image" title="Nate Parker" height="3167" width="4641" msid="80423271" hostid="261"></div><p>Lee told Insider that after seeing a "special sneak preview" of the film, he jumped at the chance to help Parker, whose career stalled after 1999 rape charges against him, in which he was acquitted, resurfaced.</p><p>"Afterward, I said: 'Whatever you need me to do.' So Nate called me and I went to Venice where we had the world premiere. So this is a Spike Lee Presentation and that's the story," Lee said. </p><p>"American Skin" is Parker's first directorial effort since the 2016 release of "The Birth of a Nation," a Sundance Grand Jury Prize winner that was acquired by Fox Searchlight for a <a href="https://www.insider.com/birth-of-a-nation-controversy-2016-10">record-breaking $17.5 million.</a></p><p>The film was ultimately derailed at the box office after Parker's 1999 rape charges resurfaced in the press. The 47-year-old actor-director was accused of raping a fellow student during his time at Penn State University. And although he was acquitted of the charges in 2001, he faced heavy criticism for <a href="https://www.insider.com/nate-parker-no-apology-rape-allegation-2016-10">his strong response</a> to the case in the press, particularly after it emerged that the accuser committed suicide in 2012. </p><p><em><strong>Read more:</strong> <a href="https://www.insider.com/spike-lee-chadwick-boseman-cancer-da-5-bloods-2020-10">'Da 5 Bloods' director Spike Lee says he didn't know Chadwick Boseman was sick while filming: 'It was 100 degrees every day'</a></em></p><p>Speaking about his decision to support Parker despite the controversy, Lee said: "Look, I thought it was the right thing to do in my heart. It's as simple as that."</p><p>"And look, let me say another thing: I understand if there are people who feel a particular way about Nate and his circumstances and go with God," he continued. "I understand if people say I can't look at this film. I understand it. That's their feeling. It doesn't make them right or wrong, but ... I'm not spending any of my time left on this planet trying to argue with someone and change their mind."</p><p>Despite Lee's support, the film has received an almost universal panning from critics. IndieWire's <a href="https://www.indiewire.com/2019/09/american-skin-review-nate-parker-venice-1202170342/">senior film critic David Ehrlich</a> described the film as "clumsy" and said that Parker deserved to be "canceled on artistic grounds alone." </p><p>"Well, look, I knew that was coming and Nate knew that was coming, so it was not a surprise," Lee said of the critique. "For me, I'm a storyteller and I love directors who tell stories, and Nate not only directed, but acted in this film and it's so much needed today."</p><h2>Lee said critics should give his films '25th Hour' and 'Summer of Sam' a second chance</h2><div type="image" title="25th Hour" height="595" width="970" msid="80423272" hostid="261"></div><p>Lee is currently setting his sights on his next movie, a musical based on the story of two Pfizer executives who launched the sexual enhancement drug Viagra. But like all filmmakers who have been working for as long as he has, Lee is deeply in tune with how his back catalog continues to be received. </p><p>Over the summer along with "Do the Right Thing," his previously overlooked satire "Bamboozled" was given a second life following a new reissue by Criterion <a href="https://www.vanityfair.com/hollywood/2020/03/spike-lee-bamboozled-criterion">with critics retrospectively describing</a> it as a masterpiece of American filmmaking.</p><p>When asked which of his other films deserved a second look from audiences, Lee said: "I want to say '25th Hour' and 'Summer of Sam.'"</p><p>"Sometimes I have done films that people just missed for whatever reason," he added. </p><p><em>"American Skin" is currently available on-demand. </em></p><p><strong>Watch the trailer below:</strong></p>

Spike Lee says Donald Trump can't come back to New York after second impeachment

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image"><p class="source"><span><a href="http://pictures.reuters.com/C.aspx?VP3=SearchResult&amp;VBID=2C0BXZJABO7P9&amp;SMLS=1&amp;RW=1549&amp;RH=848&amp;POPUPPN=3&amp;POPUPIID=2C0BF1MTX3U6">REUTERS/Philippe Wojazer</a></span></p><p class="caption">It all started with one tiny pharmaceutical company.</p></div><p></p></div></div>Pfizer and Allergan <a href="http://www.businessinsider.com/pfizer-and-allergan-are-combining-to-form-a-150-billion-drug-company-2015-11">will combine</a> in a <span>$160 billion merger. </span></p><p>The deal will create a pharmaceutical giant, with drugs from Botox to Viagra in one portfolio.</p><p>It will also allow Pfizer to reincorporate in Ireland, where Allergan is domiciled and taxes are lower, in what's <a href="http://www.businessinsider.com/pfizer-allergan-tax-inversion-2015-10">known as a tax inversion</a>.</p><p>The merger is just the latest in a string of deals that has allowed at least four different companies to cut their tax bills by merging into what is now called Allergan.</p><p>Here's how that went down:</p><ul><li><span style="line-height: 1.5em;">As </span><a href="http://www.bloomberg.com/news/articles/2015-11-02/a-pharmacist-s-dirty-socks-are-key-to-cutting-pfizer-tax-bill">Bloomberg's Zachary Mider</a><span style="line-height: 1.5em;"> notes, it all started with a small pharmaceutical called <strong>Galen</strong>, based in Northern Ireland and founded in 1968.</span></li><li>By 2008, Mider notes, Galen had moved to Ireland and renamed itself <strong>Warner Chilcott</strong>. It had a market cap of about $3.8 billion by late 2008.</li><li>Then, in 2009, <span>Warner Chilcott</span> <a href="http://news.pg.com/press-release/pg-corporate-announcements/warner-chilcott-acquires-pgs-global-pharmaceuticals-busines">bought</a> <strong>Procter &amp; Gamble</strong>'s global pharmaceuticals business.</li><li>In 2013, Warner Chilcott was bought by <strong>Actavis</strong>, a New Jersey-based pharmaceutical. It moved its address to Ireland.</li><li>The Ireland-based Actavis bought another US firm, <strong>Forest Laboratories</strong>, in 2014.</li><li>Then, earlier this year, Actavis bought the California-based <strong>Allergan</strong> and took its name.</li><li>Now, the Ireland-based Allergan is merging with <strong>Pfizer</strong>.</li></ul><p><span>"Pfizer anticipates that the combined company will have a pro forma Adjusted Effective Tax Rate of approximately 17%-18% by the first full year after the closing of the transaction," Pfizer said in a statement.</span> Currently, the drugmaker is paying an effective tax rate of 25%.</p><p>It's no secret that Pfizer has been looking to do an inversion. CEO Ian Read <a href="http://www.businessinsider.com/pfizer-ceo-read-hinted-at-an-allergan-deal-2015-10">has repeatedly said </a>tax is a competitive challenge for companies like his in the US, and Pfizer even tried to pull off an inversion in 2014 by <a href="http://www.businessinsider.com/pfizer-astrazeneca-2014-4">merging with the UK-based AstraZeneca</a>.</p><p>Drugmakers are also keen to move overseas to avoid having to pay taxes on foreign profits. Once redomiciled in Ireland, Pfizer could bring some of its cash back to fund things like dividends and acquisitions without paying the higher US rates.</p><p>But the deal comes just as US lawmakers are changing the rules on tax inversion, so it could still be thwarted.</p><p><span></span><span>Last week, the Treasury Department released new rules to help block such deals. That follows the regulations the Treasury introduced in September 2014, after <span>numerous high-profile inversions - and attempts - took place in 2013 and 2014.</span></span></p><p><span><span>Assuming it goes through, the Allergan-Pfizer deal is set to be the </span><a href="http://www.bloomberg.com/news/articles/2015-10-29/allergan-deal-could-take-pfizer-closer-to-split-up-move-abroad">largest</a><span> tax inversion deal on record.</span></span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/silk-road-founder-convicted-of-all-counts-2015-5">Here's the incredible story behind the guy who was just sentenced to life for creating the 'eBay for drugs'</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="p2d2wxczptWT5pUwmAdleRGRLaPVA12Y" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

A 7-year deal spree led to the biggest pharma merger ever - and it all started with a tiny Irish drugmaker

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Associated Press</span></p></div><p></p></div></div>The company that just won approval for a little pink pill that's been called "female Viagra" also just got a huge bump in funding. </p><p>Valeant Pharmaceuticals International Inc. said on Thursday it would buy Sprout Pharmaceuticals, whose drug flibanserin (Addyi) became the first approved treatment for low sexual desire in women, for about $1 billion with milestone payments.</p><p>The drug treats a condition called <span>hypoactive sexual desire disorder (HSDD), which can cause chronic low desires to have sex in women. Addyi is a non-hormonal treatment that sends chemicals to the brain in the hopes of increasing sexual desire for women.</span></p><p><span>Sprout Pharmaceuticals is based in Raleigh, North Carolina and currently employs 34 people. It's been banking on Addyi as its main drug, and with that getting approval, the company needs this boost in funding to expand its operations.</span></p><p>Sprout's controversial pink libido pill was approved on Tuesday by the U.S. Food and Drug Administration for pre-menopausal women, after being rejected twice over concerns about its effectiveness and side-effects.</p><p>Addyi, popularly known as the "female Viagra", comes with strong warnings about potentially dangerous low blood pressure and fainting, especially when taken with alcohol. This has raised some questions about how it will do when it becomes commercially available.</p><p>Raghuram Selvaraju, managing director of brokerage H.C. Wainwright &amp; Co, has estimated peak sales of $100 million a year for Addyi. Viagra - a "blockbuster" in drug industry parlance - generated sales of about $1.7 billion in 2014.</p><p>There are also concerns that the FDA was pressured into approving Addyi, given that Viagra - the first treatment for male sexual dysfunction - was approved more than a decade ago.</p><p>Unlike Pfizer Inc's Viagra, which affects blood flow to the genitals, Addyi is meant to activate sexual impulses in the brain.</p><p>Sprout was co-founded in 2011 by husband and wife Cindy and Robert Whitehead.</p><p>The couple had previously sold another small drugmaker they founded, Slate Pharmaceuticals, which had received repeated warnings from the FDA about its marketing tactics.</p><p>Slate marketed an implantable testosterone pellet for men with low levels of the male sexual hormone, called Testopel.</p><p>Valeant, which has grown rapidly through acquisitions, said it would pay $500 million upfront and make another installment next year for privately owned Sprout.</p><p>The Canadian company said it expected the deal to close in the third quarter of 2015. After its approval, Sprout estimated that Addyi would be available in the US by October 17, and Valeant says they have a similar timeline of getting the drug available by fourth quarter 2015.</p><p><em>Reuters reporting by Natalie Grover, a<span>dditional reporting by Supriya Kurane and Ankur Banerjee; Editing by Kirti Pandey and </span><a href="http://blogs.reuters.com/search/journalist.php?edition=us&amp;n=ted.kerr&amp;">Ted Kerr</a></em></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/amy-schumer-lives-walk-up-apartment-new-york-city-one-bedroom-2015-8">Amy Schumer may be a big deal - but she still lives in a walk-up</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="80NHEzdzqwOe0Bgp6j1I77lmtiuImbme" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

That was quick: The maker of the first approved women's libido drug was just acquired for $1 billion

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Joe Raedle/Getty Images</span></p></div><p></p></div></div>Drug price increases - a common practice in the pharmaceutical industry- have come under much closer scrutiny over the past year. </p><p>Take Mylan, for example. The makers of the EpiPen <a href="http://www.businessinsider.com/epipen-price-increases-about-500-percent-2016-8">came under fire in August from politicians and the public</a> for its 500% increase since 2007 in the list price of the emergency allergy medication.</p><p>The focus on drug pricing - and in particular <a href="http://www.businessinsider.com/r-clinton-announces-plan-to-address-unjustified-price-hikes-on-life-saving-drugs-2016-9">Democratic presidential nominee Hillary Clinton's plan</a>, if elected, to institute a panel that would take on "unjustified" price hikes - prompted Morgan Stanley to issue a series of reports on how this policy would affect the pharmaceutical industry overall. Thursday's report looks at what constitutes a "normal" or an "excessive" price hike by looking at the top 269 drugs price increases over the past seven years.</p><p>Morgan Stanley singled out the drugs that had increased more than 50% in price since 2009, and in particular those that have gone up at least 200%-400%, a group of drugs that haven't received as much attention as the EpiPen or some of Valeant's portfolio that's been <a href="http://www.businessinsider.com/valeant-faces-scrutiny-for-price-gouging-2015-10">called out over the last year</a>.</p><p><strong>Of those 269 drugs, 117 have increased by 100% or more</strong>:</p><p style="padding-left: 30px;">"The list of products taking cumulative price increases above 400% (11 products) is mostly made up of already highly scrutinized Valeant (5 drugs), Horizon Pharma (3 drugs),and Mylan (1 drug).</p><p style="padding-left: 30px;">"Products with price increases between 200% and 400% (21 products) contains more recognizable company names including EliLilly (HumuLIN, Adcirca,and Cialis), Novo Nordisk (Vagifem, NovoLIN, and Levemir), Teva (Amrix), Sanofi (Renvela),and Pfizer (Viagra). "</p><p>Here are all the different buckets:<div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Morgan Stanley screenshot</span></p></div><p></p></div></div></p><p> </p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/argument-doubling-fed-inflation-target-markets-paul-krugman-2016-8">KRUGMAN: There is an argument for doubling the Fed's inflation target</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="UxbW9tNTE64saDqvO9JlMq8cl9cAR0s8" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

The EpiPen isn't the only drug that's doubled in price over the past few years

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Courtesy AstraZeneca</span></p><p class="caption">AstraZeneca President Ruud Dobber</p></div><p></p></div></div></p><ul class="summary-list"><li>Drug pricing remains an issue facing the healthcare industry, though little has been done to curb it. </li><li>Pharma executives, including AstraZeneca US president Ruud Dobber and <a href="https://www.businessinsider.com/merck-ceo-on-disintermediation-in-pharma-2018-10">Merck CEO Kenneth Frazier</a> are starting to get fed up, particularly with the role so-called middlemen play. </li><li>For now, it's unclear where the rebates pharmaceutical companies pay out end up. "That model is not sustainable," Dobber said. </li></ul><p>Rising drug prices have been at the center of American conversation for the past three years. </p><p>But amid all the finger-pointing, presidential <a href="https://www.businessinsider.com/trump-singles-out-pfizer-in-drug-pricing-tweet-2018-7">call-outs on Twitter,</a> and <a href="https://www.businessinsider.com/trump-singles-out-pfizer-in-drug-pricing-tweet-2018-7">pledges to keep drug prices at bay</a>, not much progress has been made to <a href="https://www.businessinsider.com/why-prescription-drug-prices-are-so-high-and-whats-being-done-about-it-2018-3">dissuade future price hikes</a> or get prices in check for Americans. </p><p>Something still has to give, according to pharmaceutical executives who have a hand in the pricing discussion. </p><p>Ruud Dobber, US president of AstraZeneca, who oversees the pharma giant's US business in lung, heart and kidney-related conditions, told Business Insider that price increases have to be within a range that makes him feel comfortable. </p><p>"If I don't feel comfortable, that is simply not good," Dobber said. "I think it's reasonable to increase a little bit your price because you have something unique. We've only one objective, that we're making our drugs affordable for patients. If the drug is not affordable, the patients cannot benefit, and we will not be making profit. It's as simple as this."</p><p>AstraZeneca joined in with other pharmaceutical companies like <a href="https://www.businessinsider.com/merck-lowers-prices-of-medications-including-hepatitis-c-drug-2018-7">Pfizer and Merck</a> in <a href="https://www.reuters.com/article/us-astrazeneca-results-prices/astrazeneca-joins-u-s-drug-price-freeze-for-rest-of-2018-idUSKBN1KG14P">freezing price increases</a> for the remainder of 2018. </p><p>Dobber pointed to other members of the pharmaceutical industry - so-called middlemen - and the rebates that get passed around as an unsustainable aspect of the market. Pharmacy benefit managers negotiate these rebates as a way to negotiate a lower price off the list price drugmakers ultimately set. D<span>rugmakers provide </span><a href="http://www.biotech-now.org/business-and-investments/inside-bio-ia/2018/03/notable-limitations-of-the-latest-drug-pricing-report">more than $100 billion</a> a year in rebates and discounts, which are a bi<span>g business for companies like Express Scripts, CVS Caremark and UnitedHealth Group's OptumRx.</span></p><p>"As a company, we are very clear that we would like to get rid of rebates and would like to move to what is called competition on the base of a net price," Dobber said. PBMs, for their part, argue that pharmaceutical companies set their own list prices, putting them in control of rising drug prices. </p><p>Merck CEO Ken Frazier in October had a <a href="https://www.businessinsider.com/merck-ceo-on-disintermediation-in-pharma-2018-10">similar perspective</a> on the amount of money that goes to the middlemen in the pharmaceutical industry. The way he sees it, Merck publishes the list prices the company sets for a particular drug.</p><p>But after that's set, there are often discounts the drugmaker pays out to middlemen, which may or may not make their way to patients. Those discounts vary and are kept secret. And if you have a high deductible plan, you might still be on the hook for paying the full list price.</p><p>"I don't understand why we live in a world where 50% of the value goes to the supply chain," Frazier said.</p><p>Frazier said he expects to see disintermediation - or reducing the number of companies between a product and a consumer - start to happen in the pharmaceutical industry, in the way it's happened with cable. Before Disney owned its own media networks, it had to pay to get its content in front of viewers. Now, it owns media networks like ABC and ESPN, which it can use to show its content, making it one less step to get to viewers.</p><p>The same could happen in the pharmaceutical industry. Already,<span> </span><a href="https://www.businessinsider.com/cigna-express-scripts-merger-gets-doj-approval-2018-9">mergers are taking place that combine insurers with pharmacy benefit managers</a>, the middlemen responsible for negotiating discounts to the list price of medications on behalf of health plans and insurers. And the <a href="https://www.businessinsider.com/trump-drug-pricing-speech-impact-on-pharmaceutical-drug-rebate-2018-5">Trump administration</a> has been putting pressure on the PBMs and the rebates they receive from drugmakers. Whether those changes lead to less drug pricing pressure remains to be seen.</p><p>Dobber had a similar perspective on the amount of money getting redirected in the system. </p><p>"At the end of the day, it's a bit of black hole and you don't know where the money is ending up," Dobber said. "I think that model needs to change. I completely agree with Frazier that that model is not sustainable." </p><p>Over the next few years, Dobber said he anticipates a number of experiments playing out - including from players outside the healthcare industry like Amazon as well as mergers between healthcare giants like <a href="https://www.businessinsider.com/potential-for-healthcare-takeovers-walgreens-2018-3">CVS Health and Aetna</a> - that could have a big impact on the industry.</p><p>"The US system deserves a bit of a shakeup of the health system. It's too complex, it's too fragmented, it's too expensive."</p><p><strong>See also: </strong></p><ul><li><a href="https://www.businessinsider.com/devoted-health-launches-medicare-advantage-plans-and-raises-300-million-2018-10">Investors including Andreessen Horowitz just made a $300 million bet that a startup can take on healthcare giants at caring for elderly Americans</a></li><li><a href="https://www.businessinsider.com/mens-health-direct-to-consumer-startups-are-expanding-into-migraines-2018-10">A former Googler who started losing his hair in his 20s and founded a company to help other men facing a similar fate now wants to help the 38 million people living with migraines</a></li><li><a href="https://www.businessinsider.com/booming-direct-consumer-healthcare-business-2018-10">Investors are betting $660 million that companies that ship Viagra and hair loss pills to your door is the future of medicine -but some doctors are worried</a></li></ul>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/why-newborn-babies-cant-drink-water-dangerous-2018-9">Why babies can't drink water</a></h3>        <div>                    </div>    </div>

'That model is not sustainable': Pharma giants AstraZeneca and Merck are sounding the alarm on the middlemen who stand between drug makers and patients

<br /> By now, much has already been said, and written, and experienced, about the two apps that have been making the headlines in the last couple of months (i.e. ever since they released) : Pokémon GO and <keyword id="3484573" type="PERSON" weightage="100" keywordseo="Prisma">Prisma</keyword>.<br />
<br /> To state the obvious, <keyword id="3047629" type="UNKNOWN" weightage="100" keywordseo="Pokemon-Go">Pokemon GO</keyword> and Prisma are the latest Blockbusters, a highly exclusive and hallowed set of products, brands and trends that define or change user behavior and consumption, and do so really fast.<br />
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Apart from the more common usage of the term in movies and music, the pharmaceutical industry reveres its <a href="https://medium.com/r/?url=http%3A%2F%2Fwww.investopedia.com%2Fterms%2Fb%2Fblockbuster-drug.asp">blockbusters</a> (A blockbuster drug is one that generates more than $1 Billion in annual sales) and so does the gaming industry (Think of Angry Birds, Candy Crush &amp; Temple Run before Pokemon GO ever happened). Harry Potter, iPhone, Tesla are also examples of the fact that Blockbusters take many forms.<br />
While our own affinity towards our favourite (or most recent) Blockbuster may make us feel otherwise, the truth is that in most cases it is near impossible to spot a Blockbuster a priori.<br />
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<a href="https://www.pinterest.com/pin/211739619954966718/"><em>Image source</em></a><br />
<br />
(Should you disagree, I would love to read your thesis on how you would have predicted, before its release, that <a href="https://medium.com/r/?url=http%3A%2F%2Fmashable.com%2F2014%2F12%2F03%2Fpsy-broke-youtube-gangnam-style%2F">Gangnam Style would become the most viewed video on YouTube</a>)<br />
<br />
With that said, an exercise in pattern recognition is an enticing proposition for most VCs, and in this post, I look at 3 ( or is it 4?) features that<br />
seem to set Blockbusters apart.<br />
<br />
<strong>Aspirational</strong><br />
Soon after Viagra’s launch, TIME magazine ran a story on the pill titled ‘<a href="https://medium.com/r/?url=http%3A%2F%2Fcontent.time.com%2Ftime%2Fmagazine%2Farticle%2F0%2C9171%2C139084%2C00.html">The Viagra Craze</a>’ in which Bob Guccione, publisher of Penthouse magazine, prophesied that the drug will :<br />
<br />
“…free the American male libido from the emasculating doings of feminists. ….and the ability to have sex by older men will make them<br />
healthier and live longer. It will fool the biological clock when men are still active in the later years. It is a very significant effect of the drug that many haven’t contemplated.”<br />
<br />
<br />
<br />
<a href="http://content.time.com/time/magazine/0,9263,7601980504,00.html"><em>Image source</em></a><br />
<br />
Coming from the Publisher of the Penthouse Magazine, the dream of everlasting youth and good times is an aspiration too potent for a lot of men to resist.<br />
<br />
Viagra’s annual sales peaked at <a href="https://medium.com/r/?url=http%3A%2F%2Fwww.drugdangers.com%2Fviagra%2F">$2 Billion </a>while Pfizer (The makers of the drug) predicted that the best case would be <a href="https://medium.com/r/?url=http%3A%2F%2Fwww.businessinsider.com%2Fpredicting-new-drug-sales-2014-4%3FIR%3DT">$500 Million</a>.<br />
Blockbusters are able to trigger aspiration to powerful and unpredictable effect.<br />
<br />
Other examples of aspiration driving a Blockbuster’s adoption and growth , include :<br />
<br />
• The “Gangnam Style” video was a parody of <a href="https://medium.com/r/?url=https%3A%2F%2Fwww.theguardian.com%2Fmusic%2Fshortcuts%2F2012%2Foct%2F25%2Fgangnam-style-seouls-most-exclusive-neighbourhood">Gangnam, Seoul’s most expensive and most exclusive neighbourhood</a><br />
<br />
• People have always to get their portraits done. A desire served well, both by selfies and the Prisma app (More on this later in this post)<br />
<br />
• In the beginning of the 20th century, cars were nothing more than a rich man’s horse, until the <a href="https://medium.com/r/?url=https%3A%2F%2Fwww.linkedin.com%2Fpulse%2Ftoo-expensive-game-changer-shubhankar-bhattacharya%3Ftrk%3Dmp-reader-card">Ford Model T came along in 1908 </a>with Henry<br />
Ford boldly calling out its mission as “ “This car will be so low in price that no man making a good salary will be unable to own one.”<br />
<br />
• And what would explain the Pokémon GO hysteria ? The prestige that comes with <a href="https://medium.com/r/?url=http%3A%2F%2Fwww.complex.com%2Fpop-culture%2F2016%2F07%2Fpokemon-go-player-complete-pokedex">catching them all</a>, and the fear that the Pokémon “<a href="https://medium.com/r/?url=https%3A%2F%2Fplay.google.com%2Fstore%2Fapps%2Fdetails%3Fid%3Dcom.nianticlabs.pokemongo%26hl%3Den">might get away!</a>”.<br />
<br />
<strong>Scarce and Imitable</strong><br />
<br />
After its triumphant launch for Apple users, there was much excitement for Prisma’s launch on the Android Play store.<br />
<br />
Within just a matter of days though, it was found that over <a href="https://medium.com/r/?url=http%3A%2F%2Fwww.scmagazine.com%2F15m-downloaded-fake-app-prisma-from-google-play%2Farticle%2F513750%2F">1.5 Million users had downloaded fake versions of the Prisma app</a>, much the same way that <a href="https://medium.com/r/?url=https%3A%2F%2Ftechcrunch.com%2F2016%2F07%2F18%2Fbeware-the-fake-pokemon-go-apps%2F">large numbers of users had downloaded fake Pokémon GO apps</a>.<br />
<br /> If you have searched for <keyword id="3582526" type="UNKNOWN" weightage="100" keywordseo="blockbuster-games">blockbuster games</keyword> such as Candy Crush Saga or Temple Run, you would know that many imitation versions of the games exist, to the extent that Candy Crush and Temple Run have almost becomes genres, not standalone games.<br />
<br />
Outside the world of apps, the proliferation of “fake iPhone” manufacturers in China has now become a well-known and well-accepted fact, <a href="https://medium.com/r/?url=http%3A%2F%2Fwww.reuters.com%2Farticle%2Fus-apple-china-idUSKCN0RN2EF20150924">one that many believe has in fact helped build Apple’s brand awareness in China</a>.<br />
<br />
Imitation, of course, can take many more forms, as <a href="https://medium.com/r/?url=https%3A%2F%2Fen.wikipedia.org%2Fwiki%2FDuck_face">Duck face selfies</a> and <a href="https://medium.com/r/?url=http%3A%2F%2Fwww.teenvogue.com%2Fstory%2Fnew-selfie-face-fish-gape">Fish gape selfies</a> constantly remind us.<br />
<br />
They say imitation is the sincerest form of flattery.<br />
<br />
Might this be corroborated by the observation that scarcity tends to heighten the demand of a Blockbuster ? And is it possible that imitations of a Blockbuster actually do it more good than harm, by extending its access ?<br />
<br />
So much for <a href="https://medium.com/r/?url=https%3A%2F%2Fen.wikipedia.org%2Fwiki%2FPorter%2527s_five_forces_analysis">Porter’s five forces</a> and what it taught us about barriers to replication being a good thing.<br />
<br />
<strong>Technological Relevance</strong><br />
<br />
Duck face sefies got me doing some research on the origins of the modern selfie.<br />
<br />
From 2006 to 2009 (back when MySpace existed), the term ‘<a href="https://medium.com/r/?url=http%3A%2F%2Fwww.newyorker.com%2Ftech%2Felements%2Fthe-return-of-the-selfie">MySpace </a><a href="https://medium.com/r/?url=http%3A%2F%2Fwww.newyorker.com%2Ftech%2Felements%2Fthe-return-of-the-selfie">pic</a>’ described an amateurish, flash-blinded self-portrait, often taken in front of a bathroom mirror. Self-portraits shot with cell phones, or “selfies” — cheap-looking, evoking the MySpace era — became a sign of bad taste.<br />
<br />
Facebook, on the other hand emphasized photos that were presented in crisp focus. Owing to cameras’ technological limitations, a well-focussed photograph was typically taken from at least three feet away, by another person.<br />
<br />
The subject of the MySpace bathroom selfie — with its tableaux of bathroom counter, mirror, face, and upper body — always looked alone. Selfies were for people without friends; the savvy moved on to the more advanced network — Facebook.<br />
<br />
<br />
<br />
<em><a href="https://medium.com/r/?url=http%3A%2F%2Fwww.chethstudios.net%2F2010%2F04%2F40-hilarious-facebook-comic-strips.html">Image source</a></em><br />
<br />
Facebook conquered MySpace because it distanced itself from the Selfie.<br />
<br />
Yeah, that happened.<br />
<br />
Selfies came back with a bang when the iPhone4 became the first iPhone to introduce a front-facing camera, a feature that is now a staple of every smartphone.<br />
<br />
Selfies, and therefore Instagram, Snapchat, and now Prisma could not have become Blockbusters before the front-facing camera became ubiquitous.<br />
<br />
What if cellphones with front-facing cameras had been mass produced while MySpace was still alive ?<br />
<br />
What if…<br />
<br />
<em><a href="http://i.imgur.com/Od0OkrG.jpg">Cover Image Source</a><br />
<br />
About the author: Shubhankar Bhattacharya is a Venture Partner at Kae Capital, an early stage VC fund. He can be reached via his <a href="https://in.linkedin.com/in/shubhankar-bhattacharya-a1063a3">LinkedIN profile</a>. </em><br />

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