Wednesday, August 26, 2015
Friday, August 7, 2015
Thursday, August 6, 2015
new challenges keep his thinking fresh.
You have a corporate headache that’s been getting worse for years. Or you have a new product, but you’re unsure how to market it.
Your best executives have tackled the issue, to no avail. You’ve brought in a health care consulting firm: ditto.
Try a whole new approach – economics.
"Economics is a science, like physical science, with laws," says Dave Webster, an economist who consults to the health care industry. “It's an extremely powerful tool to explain human and organizational behavior under a wide variety of circumstances. It allows you to make very good guesses about the future and explain problems that look insoluble, then design solutions to address those problems."
Webster wants clients to use Webster Consulting Group like a SWAT team to confront seemingly intractable problems or make predictions about apparently unpredictable markets.
He’s at his best when the conventional wisdom has failed or a situation has no precedent.
“I love running up against high-stakes, big problems that a bunch of people have tried to solve and can’t solve – and fix them. That’s just an incredible rush for me,” he says.
He's had some notable successes, including:
-- Helping Pasteur Merieux Connaught (now Sanofi Pasteur) raise the price of its flu vaccine when it thought the only way to compete was by lowering prices. The move doubled the entire company's profits in the first year;
-- Advising a prospective investor that a biotech company's stock was overvalued, because it planned to price its chief drug too high to penetrate the market;
-- Advising an optics company not to develop a new technology for combinatorial chemistry, just before the sector began a downslide.
Webster insists there's no mystery to his methods, although they're unorthodox.
Like all consultants, he does detailed research. Like some, he has a dynamic understanding of the complex health care industry, gained through his work at the healthcare consulting firm APM Inc. and as director of pricing for Pasteur Merieux Connaught.
But he has a powerful tool that most consultants and business executives lack: a Ph.D. in economics from the University of Chicago.
Given a problem, he bones up on the details, talks to people involved at all levels – executives, patients, doctors, hospitals, insurers, distributors, scientists, manufacturers, and regulators – then uses the laws of economics to identify key factors, root out faulty assumptions and arrive at a solution, which he refines with more input from the client.
"Our understanding of how these markets work helps us zero in on critical things to look at. That's what we have in a bottle that other folks don't," he says.
Nabil Lawandy, president and chief executive of Spectra Systems Corp., says Webster is a quick study whose methods work.
"Dave is really a brilliant guy who can apply his skills to commercialization in any industry, no matter what it is," Lawandy says. "I wouldn't hesitate to ask him to work on anything from nanotechnology to drug discovery."
Webster helped Spectra Systems at a critical time, when it was about to go public, by advising the company not to invest in developing a combinatorial chemistry machine, Lawandy says.
"He was able to really understand our technology as well as competing technologies, assess the industry's need for the technology – ours and others' – and essentially predicted the cooling off of this whole sector. That was critical for us, because we would have invested millions to develop a technology that ultimately would have fallen on weak demand," Lawandy says.
Paul Barone, who has worked in business development at several specialty pharmaceutical companies, likes to get Webster’s opinion before he decides whether to license a drug.
"I like to get an external view, a sort of sanity check," Barone says. "He's very responsive, very helpful, a smart guy, and very easy to work with."
Webster's ability to analyze existing and future markets also has helped investors.
Samir Devani, a biotechnology analyst at J.P. Morgan in London, asked Webster to help him value a firm that was about to launch a new drug for Gaucher disease, a rare but devastating illness. The company planned to price it at $90,000 per patient for a year’s treatment, and analysts valued the company accordingly (potential revenues from the new drug constituted nearly 90 percent of the firm’s value).
Webster determined that even though the new drug was better than an existing treatment, the therapeutic advantage wasn't great enough to induce patients or insurers to use it unless the price was much lower.
“The price that was going to maximize their revenue was around $35,000 to $40,000,” Webster says. “That was the price that would persuade enough people to adopt it.”
Based on Webster’s findings, Devani sent a report to major investors, who quickly sold their stock.
“It was very contrary to what the company was indicating, so it really added value,” Devani says. “The essence of our work is to try and give clients information they don’t have from other sources. That bit of work he did for us gave us something quite unique.”
Webster's first big success was at Pasteur Merieux Connaught, where he was hired as director of pricing in 1998. He quickly realized the company’s most intractable problem was an eight-year decline in the price of the flu vaccine..
Pasteur had tried repeatedly to raise its price, but always caved when big distributors threatened to buy from one of its three competitors.
All four manufacturers’ products were safe and effective, so Pasteur's executives and sales staff believed the only way to win market share was by undercutting their competitors on price. The vaccine had become so unprofitable that, shortly before Webster was hired, a major health care consulting firm advised Pasteur to drop out of the flu vaccine market altogether.
But after talking with sales staff and customers, Webster realized Pasteur excelled on two measures that strongly influenced buying decisions by doctors and mass immunization programs: early delivery and reliable supply. He persuaded executives that buyers would be willing to pay more for those advantages and the company hiked its price by 50 percent in 1999.
The move proved highly profitable for Pasteur, which at the time was a $450 million company. Revenues increased by $50 million in the first year, doubling the company's overall profits.
In his spare time, Webster likes to chew on some of the biggest problems confronting the health care industry, whether or not he has a client.
Recently, he's done a lot of thinking about how to tackle the thorniest issue confronting the pharmaceutical giants created by a series of mergers: The bigger a company gets, the fewer new drugs it develops. He's got some ideas about how to restructure companies and incentives to increase research and development productivity.
Most of all, he wants to avoid being pigeonholed as an expert in just one sector of the health care market. And while he welcomes repeat customers, he doesn't want his work to revolve around two or three big clients, because new challenges keep his thinking fresh.
"I love solving problems, I love working out solutions, but after I’m done, I want to move on," he says. "It wouldn't bother me if I worked for a client just once and did a great job for them."
-- By Katharine Pratt
Your best executives have tackled the issue, to no avail. You’ve brought in a health care consulting firm: ditto.
Try a whole new approach – economics.
"Economics is a science, like physical science, with laws," says Dave Webster, an economist who consults to the health care industry. “It's an extremely powerful tool to explain human and organizational behavior under a wide variety of circumstances. It allows you to make very good guesses about the future and explain problems that look insoluble, then design solutions to address those problems."
Webster wants clients to use Webster Consulting Group like a SWAT team to confront seemingly intractable problems or make predictions about apparently unpredictable markets.
He’s at his best when the conventional wisdom has failed or a situation has no precedent.
“I love running up against high-stakes, big problems that a bunch of people have tried to solve and can’t solve – and fix them. That’s just an incredible rush for me,” he says.
He's had some notable successes, including:
-- Helping Pasteur Merieux Connaught (now Sanofi Pasteur) raise the price of its flu vaccine when it thought the only way to compete was by lowering prices. The move doubled the entire company's profits in the first year;
-- Advising a prospective investor that a biotech company's stock was overvalued, because it planned to price its chief drug too high to penetrate the market;
-- Advising an optics company not to develop a new technology for combinatorial chemistry, just before the sector began a downslide.
Webster insists there's no mystery to his methods, although they're unorthodox.
Like all consultants, he does detailed research. Like some, he has a dynamic understanding of the complex health care industry, gained through his work at the healthcare consulting firm APM Inc. and as director of pricing for Pasteur Merieux Connaught.
But he has a powerful tool that most consultants and business executives lack: a Ph.D. in economics from the University of Chicago.
Given a problem, he bones up on the details, talks to people involved at all levels – executives, patients, doctors, hospitals, insurers, distributors, scientists, manufacturers, and regulators – then uses the laws of economics to identify key factors, root out faulty assumptions and arrive at a solution, which he refines with more input from the client.
"Our understanding of how these markets work helps us zero in on critical things to look at. That's what we have in a bottle that other folks don't," he says.
Nabil Lawandy, president and chief executive of Spectra Systems Corp., says Webster is a quick study whose methods work.
"Dave is really a brilliant guy who can apply his skills to commercialization in any industry, no matter what it is," Lawandy says. "I wouldn't hesitate to ask him to work on anything from nanotechnology to drug discovery."
Webster helped Spectra Systems at a critical time, when it was about to go public, by advising the company not to invest in developing a combinatorial chemistry machine, Lawandy says.
"He was able to really understand our technology as well as competing technologies, assess the industry's need for the technology – ours and others' – and essentially predicted the cooling off of this whole sector. That was critical for us, because we would have invested millions to develop a technology that ultimately would have fallen on weak demand," Lawandy says.
Paul Barone, who has worked in business development at several specialty pharmaceutical companies, likes to get Webster’s opinion before he decides whether to license a drug.
"I like to get an external view, a sort of sanity check," Barone says. "He's very responsive, very helpful, a smart guy, and very easy to work with."
Webster's ability to analyze existing and future markets also has helped investors.
Samir Devani, a biotechnology analyst at J.P. Morgan in London, asked Webster to help him value a firm that was about to launch a new drug for Gaucher disease, a rare but devastating illness. The company planned to price it at $90,000 per patient for a year’s treatment, and analysts valued the company accordingly (potential revenues from the new drug constituted nearly 90 percent of the firm’s value).
Webster determined that even though the new drug was better than an existing treatment, the therapeutic advantage wasn't great enough to induce patients or insurers to use it unless the price was much lower.
“The price that was going to maximize their revenue was around $35,000 to $40,000,” Webster says. “That was the price that would persuade enough people to adopt it.”
Based on Webster’s findings, Devani sent a report to major investors, who quickly sold their stock.
“It was very contrary to what the company was indicating, so it really added value,” Devani says. “The essence of our work is to try and give clients information they don’t have from other sources. That bit of work he did for us gave us something quite unique.”
Webster's first big success was at Pasteur Merieux Connaught, where he was hired as director of pricing in 1998. He quickly realized the company’s most intractable problem was an eight-year decline in the price of the flu vaccine..
Pasteur had tried repeatedly to raise its price, but always caved when big distributors threatened to buy from one of its three competitors.
All four manufacturers’ products were safe and effective, so Pasteur's executives and sales staff believed the only way to win market share was by undercutting their competitors on price. The vaccine had become so unprofitable that, shortly before Webster was hired, a major health care consulting firm advised Pasteur to drop out of the flu vaccine market altogether.
But after talking with sales staff and customers, Webster realized Pasteur excelled on two measures that strongly influenced buying decisions by doctors and mass immunization programs: early delivery and reliable supply. He persuaded executives that buyers would be willing to pay more for those advantages and the company hiked its price by 50 percent in 1999.
The move proved highly profitable for Pasteur, which at the time was a $450 million company. Revenues increased by $50 million in the first year, doubling the company's overall profits.
In his spare time, Webster likes to chew on some of the biggest problems confronting the health care industry, whether or not he has a client.
Recently, he's done a lot of thinking about how to tackle the thorniest issue confronting the pharmaceutical giants created by a series of mergers: The bigger a company gets, the fewer new drugs it develops. He's got some ideas about how to restructure companies and incentives to increase research and development productivity.
Most of all, he wants to avoid being pigeonholed as an expert in just one sector of the health care market. And while he welcomes repeat customers, he doesn't want his work to revolve around two or three big clients, because new challenges keep his thinking fresh.
"I love solving problems, I love working out solutions, but after I’m done, I want to move on," he says. "It wouldn't bother me if I worked for a client just once and did a great job for them."
-- By Katharine Pratt
Saturday, August 1, 2015
Your insights are more than helpful. Your distinct writing style has really left it's mark. I only read W-Land, I'm saving the next one for my subway ride to ballet in an hour or so. I have a question. How does an artist soak up knowledge and style from another without 'plagarising'( for lack of a better term)?. The entire piece was sexy, it left me wanting more. But there were distinct sentences that I loved so much I wanted to adopt them, or at least share their effect on me with others.
Could you help me piece it together?
I tried calling, but, you know. I'd love to speak with you again. Sorry I was awkward at dinner in the village. I hope that won't deter you from breaking bread with me again.
Holler back Hippie Lou, the world needs you, I need you.
1/28/10
Could you help me piece it together?
I tried calling, but, you know. I'd love to speak with you again. Sorry I was awkward at dinner in the village. I hope that won't deter you from breaking bread with me again.
Holler back Hippie Lou, the world needs you, I need you.
1/28/10
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