Thursday, October 29, 2009

Black Swans and Sea Turtles

Conferences and networking are a rich source of new ideas for me. On a recent trip to San Francisco, I obtained the following food for thought:

In The Black Swan The Impact of the Highly Improbable by Nassim Nicholas Taleb, the author describes how naturalists believed all swans were white, until black swans were discovered in Australia. Such discontinuities can cause revolutionary changes, for better or for worse. In order to find exceptional returns, we need to seek out and put up to 20% of our resources (money, time, talent) into long bets - black swans - while keeping the other 80% in safer, more predictable areas.

While in San Francisco, I attended the PharmAsia Summit, to learn about the new trends in pharmaceutical R&D innovation in China. Current drivers are the annual 40,000 Sea Turtles - educated scientist / entrepreneur returnees to China, and a flood of patent filings by domestic Chinese scientists, encouraged by a new 3rd amendment to Chinese patent law that has changed the system from first to file to first to invent and increased penalties for infringement. Other factors include up to 50% tax credits for R&D investment, reforms and capacity building in the Chinese S-FDA, and the new Chinese healthcare system reforms aimed at making healthcare accessible and affordable to all. Continuing challenges include the high cost and 30-40% import duties on foreign reagents and scientific equipment, and supply chain and quality issues ranging from counterfeiting and adulteration to weak clinical data integrity and alteration of records.