The Drug Market Should "Go to Eleven"
What the Pharmaceutical Industry Can Learn from Spinal Tap
We’ve been here before, or at least we think we have.
The Industrial Age — from which the current model of the ‘drug market’ was born — didn’t just give us steam engines and the horseless carriage. It also produced child labor, dangerous urban factories, decades of worker agitation, and, out of that unrest, contributed to the rise of dangerous new ideologies like communism and fascism. And while electrification remade cities, it also displaced trades and reshaped social and economic rhythms at global scale.
This is the pattern: change, uncertainty, social adaptation.
Each leap forward solves problems and advances economic well-being, but also creates new, hard-to-predict frictions and challenges. So it is likely to be in a world of AI, which belongs in the lineage of transformational change, but with a critical difference: pace. Steam engines, electricity, and even the Internet, all took decades to diffuse fully. AI could collapse diffusion into years, leaving governments, industries, brands and markets precious little time to come to terms with it.
Most recently, robotic automation displaced millions of manufacturing workers, setting off new crises for not only non-college-educated workers in the US and abroad, but the “panicking” recently college-educated struggling to find jobs, pushing more Americans into part-time work and other roles they don’t want. Ditto for China: fully 200 million people, or 40 percent of the urban labor force, depend on some kind of gig work that doesn’t always pay the bills.
A shortage of good jobs is one reason why youth in several Asian countries have risen in protest at the self-dealing of their political leaders. Fed up with elite corruption and widening inequality, a youth-led movement in Nepal toppled the government in forty-eight hours. In Indonesia demonstrations in August turned violent after an armored vehicle ran over a gig worker who gave rides on his motorbike.
Speaking of dinner conversation about the ‘family health’ agenda, at least 40 percent of America’s households are dealing with unpaid healthcare bills from hospitals, labs, doctor offices and not enough set-aside cash for over-the-counter remedies and prescription drug co-pays. They are being chased by collections agencies working for the $272 billion revenue cycle management market working for the aforementioned hospitals, labs and doctor offices. All the while student loan payments, escalating costs for groceries, housing, rent and child care, not to mention an unstable employment market, are all elements of the same system, squeezing families even further.
How bad could the coming acceleration of strategic collapse become?
Brent Orrell last week for the American Enterprise Institute:
AI raises questions that cut to the core of human identity. History suggests that when machines take over tasks previously reserved for humans, our sense of purpose requires recalibration. The rise of industrial weaving displaced artisans; the calculator diminished the economic value of manual computation; and digital photography abruptly ended centuries of darkroom craft (not to mention the bankruptcy of Kodak). Robots moved workers off assembly lines. In each case, human meaning shifted, sometimes painfully, from the pride of doing a task well to the challenge of finding new domains where human skill, creativity, and judgment still mattered. Recursive AI could force a similar reckoning, this time not for a trade or an industry but for basic intellectual tasks. Human beings as the apex intelligence might be supplanted.
Meaning and purpose —perennial, nonnegotiable human needs — are often linked to the sense of satisfaction we derive from shaping and contributing to the world. Since we are a thinking, self-reflective species, those needs occupy the top of Maslow’s hierarchy; with AI, the top could suddenly get more crowded, setting off competition — not for material goods but for the remaining opportunities to explore meaning, purpose, and satisfaction. It is hard to predict what an AI-driven existential crisis, scaled across the globe, would mean for individuals, communities, and nations.
It may be less hard to predict the strategic effect of a global existential crisis than it will be for government + industry to adapt. Consider the Big Mac Index: McDonald’s sales are slumping because people can’t afford fast food, its CEO Chris Kempczinski acknowledged in a recent earnings call, conceding that "our value leadership gap has recently shrunk."
In an interview on CNBC, Kempczinski said he was expanding its value meal menu in response to growing evidence of a divided consumer landscape: “Particularly, with middle- and lower-income consumers, they’re feeling under a lot of pressure right now,” he said, adding: “It’s really kind of a two-tier economy” with upper-income households spending freely while the rest struggle mightily with their own search for ‘strategic fit’ to a world that has stopped making sense.
The End Continues
In all great stories, the main character is altered somehow by their interpersonal encounters and conflicts with the world in which they are a part. As they clash, they send each other spinning outwards, only to clash again in new and altered ways, and then spin out again, and meet again and so on and so on, out across the plot, in an elegant and gripping dance of change.
It’s these ‘circle dynamics’ that a modern strategy channels and shapes into storylines of value, ‘narrative surprise’ from which to lead big market innovation.
And for evidence of his potential, look no further than Nvidia investing up to $100 billion in OpenAI, marking a tie-up between customer-as-collaborator in the global artificial intelligence race. [The deal also reflects the fourth rule of systems thinking: there is no ‘out there’ that separates customer from competitor or the observer from the observed. In a networked economy, it’s impossible to tell which side you’re on. Everything is edge.]
Pfizer on Monday made a big swing at claiming a chunk of the weight-loss drug market, saying it would pay $4.9 billion up front for Metsera, and promising bonus payments worth up to $22.50 per share if Metsera’s drugs hit certain milestones. Patent expirations and the loss of Covid vaccine windfalls left Pfizer short of growth drivers, and its shares have fallen nearly 50 percent in three years — making it one of the industry’s cheapest big names.
Pfizer is joining a crowded field of obesity-drug hopefuls that already includes Roche, AstraZeneca, AbbVie, Amgen and Regeneron. “The competition will be fierce, but with Metsera, Pfizer isn’t just buying one shot — it is buying a platform,” writes David Wainer in his coverage for the Wall Street Journal on Monday (This Hated Stock Suddenly Looks Like an Obesity Bargain). “The deal won’t fix Pfizer’s growth gap immediately, and success isn’t guaranteed. Still, in a market hungry for new weight-loss options, the company suddenly has a new narrative that investors might find easier to stomach.”
We’ll see.
The “new narrative” here feels very Industrial Age, organized around the same screenplay — the neural architecture — the pharmaceutical industry has been following since it was founded by Pfizer in 1849. The plots, endings and meanings haven’t changed in more than 175 years.
It’s early innings, of course, but when it comes to an ecosystem-centered market strategy, the entity that understands how to manage their business to spark and then sustain ‘gravitational pull’ into their ecosystem is the one with the advantage over rival. The new leadership skill to develop: If you’re able to weld disjointed markets into a single piece of machinery — as a new care and service infrastructure — you not only invent leverage, but you have the ability to steer an entire economic system your way.
Trying to compete in the ‘drug market’ isn’t the same thing as inventing a ‘pharmaceutical-as-healthcare market’. The former is conventional and cliché, the conceptual past defined by the dynamics of churn.
The latter is an entirely new system of thought, a conceptual future positioned with four words. These four words derive new market power from the fact that they’re so dense with narrative potential, as if an entire story is packed into them, a rich source of new data and different dialogue for the model-making brain.
These Go To Eleven
In 1984, the groundbreaking mockumentary This Is Spinal Tap lampooned heavy metal bands and rock documentaries — and introduced audiences to a new film genre.
"What we were doing was not only satirizing heavy metal, we were satirizing the documentary form and the way in which documentaries were presented," director Rob Reiner says.
Now, in the sequel Spinal Tap II: The End Continues, the band returns for a reunion concert. As in the original film, the band is portrayed by Michael McKean, Christopher Guest and Harry Shearer. Everyone's older in the sequel, but make no mistake: None of the characters has changed. From Spinal Tap is back. Director Rob Reiner says they're still dialed up to 11, published earlier this month on NPR:
"The beauty of these guys, the members of Spinal Tap, is that in all those years, from their 20s, 30s up now until their 70s, they have grown neither emotionally or musically," Reiner says. "There's no growth. They basically are in a state of arrested development for, like, 50 years. And the only growth that there is, is maybe skin [tags] from getting older."
Spinal Tap, the fictional band at the center of the film, was known for its excesses both on- and off-screen. The bass player stuffed his pants with a foil-wrapped zucchini, while the lead guitarists boasted of amps that "go to 11." Reiner both directed the film and played a documentary director in the movie.
What Nvidia understands in its deal with OpenAI is this:
Better story performance comes from content that is changeful. It should be formed with dialogue that drips with personality and point of view. It should serve as an ignition point that sprouts new plotlines and new characters and writhes with new meaning.
Like “These go to eleven”.
/ jgs
John G. Singer is Executive Director of Blue Spoon, the global leader in positioning strategy at a system level. Blue Spoon specializes in constructing new industry narratives.