The setting is a large pharmaceutical concern. All the top brass are attending a research meeting in the elegant wood-paneled boardroom.
Mr. Black, the CEO, presides and calls for a report from the research director, Mr. White, about the new drugs the company has in its research pipeline.
“Well, Mr. Black, I am quite excited to say we are almost ready with a new drug that will cure cancer.”
Mr. Black is dumbfounded. “What did you say?”
“That’s right, sir. A cure for cancer. One pill every morning for two weeks and we can cure all forms of cancer.”
“Fantastic. Unbelievable. A dream come true. Every pharmaceutical company would kill for this.”
The room turns jubilant. Except for Mr. Green, the chief financial officer, who slumps dejectedly in his chair, an ashen look on his face.
Observing this, the CEO asks, “Something wrong, Green?”
“I’ve been worrying about this. As you know our sexual performance drug for men went generic last year. So now more than half our market is cancer patients.”
“Yes, I would think you would be excited about this cure for cancer development.”
“Not exactly, sir. You see if we cure cancer with a two-week treatment, then within five years that market will dry up. Once patients don’t have to take our drug on an ongoing basis, it could eventually put us out of business. Unfortunately, the truth is that curing cancer is not a sustainable financial model for us in the long run.”
Mr. Black stares at Green for a second and ponders the implications of this statement. Meanwhile, Mr. White looks aghast and says,
“Green, what are you talking about? It’s the greatest thing since penicillin. We’ll be saving thousands of lives every year. And think of the good will.”
Green is undeterred and pushes back. “Mr. White you don’t understand. The problem is our stockholders don’t really care about good will. They care about the stock price. And the Wall Street hedge fund managers? Earnings and growth is where they are at. Any way you look at it, there is not much long-term growth potential in a one-time cure for cancer.”
Mr. Black asks, “Is there anything we can do?”
Green replies, “Well, we could price the drug at a million dollars a treatment. Put on a publicity campaign with doctors and hospitals, a little pressure on the insurance companies, some coercion from our Washington lobbyists. I’d say exorbitant pricing could buy us a couple of years.”
“It’s worth considering.”
“But the problem, sir, is our worldwide market. We’ll never get away charging more than $500 in India. And we’ll have to give a discount in Canada, so you’ll have Americans importing the drug for a fraction of the cost. And then there will be the knockoff drugs from China. Even at a million dollars a treatment, we’d just be prolonging the inevitable.”
This kills the euphoria in the room quickly. Mr. Black decides to change the subject,
“Any other drugs in the pipeline, White?
White says sheepishly, “Well, we are developing a cure for male baldness, sir. It looks like it works but it only lasts for a couple of months at a time, so men have to take keep taking it for the rest of their lives.”
Mr. Black suddenly excited again says, “Sounds promising!
White adds, “The drug has a side effect. It causes beard growth.”
Mr. Brown, the marketing director, looks up and says, “Beard growth? We can promote it off-label as a sexual performance drug. You know, enhances male potency.”
White protests, “But it doesn’t do that”.
Brown responds, “That’s not the point. If it’s an off-label indication, it doesn’t matter. The FDA will not bother us as long as we don’t market it directly. We just tell physicians it enhances potency and leave it to them to prescribe. It could double our prescription base.”
Mr. Black says,” Excellent. And we’ll have the full support of the barbers’ union!”
The whole room laughs obsequiously at the lame joke except for White, who senses the mood of the room.
Green chimes in, “From a financial standpoint, White, I must say you have an astonishingly good product there.
Mr. Black looks at the group, pounds his hand on the mahogany table and says, “I’ve made up my mind. Forget the cancer drug. Put everything we’ve got into curing baldness. Onward and upward. White, where are you going?”
Having just seen his dream of curing cancer die, White is more than a little nonplussed. He says, “Just outside for a couple of minutes, Mr. Black. Do we make anything for nausea?”
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