Last night, it broke on the internet that Tony Hsieh passed away after a tragic house fire took his life. We do not necessarily agree with the cult-like holocracy he advocated, but he brought employee engagement and customer service to a different high level altogther. We personally had a chance to visit his HQ in Las Vegas, tour the revival of a down-and-out area of the Silver State. Our company CEO got to shake hands with him and to listen to his ideas we can bring home to Sunfu Solution, Inc. (SSI). We pay tribute to him as a management man who defied convention to make corporations more human, more socially responsible, and to not simply chase numbers. Tony Hsieh, RIP.
It is with some amusement (sometimes sadness) that there are calls for, literally, the hanging of sellers of rapid tests. And we have a populist government ready to cater to anyone who shouts loud enough, or shouts louder than our president. We now have MECQ (Modified Enhance Community Quarantine), which, from my perspective of going out every day for work, will cause more suffering to the general populace than Covid 19. The restaurants where I took (forced) my family to eat every weekend to support businesses have their people working five days in a month, rotating those who stayed on to have some income to survive.
Yet as some blame us sellers of rapid tests for the latest MECQ, nobody has really checked the claims of private hospitals that they are overflowing with Covid patients, and if the allocation of beds requested of them had been made real. Surely there is truth to front liners being overwhelmed and exhausted, but nobody asked how many front liners were added in the four months we were in lock down, how many portable xrays and ventilators were added by all the private and public hospitals during the lock down. Sure, PCR machines were (are? really? which one?) all the craze, but I am not sure there is anything beyond PCR that were being pushed as the “gold” standard, in spite of many reports of false negatives, and (let’s say it already) even false positives. You mean there is no economic interests behind all the push for PCRs? (Note: we also have PCR machines being sold by our company, so do buy from us, as we have economic interests in this too! Although I have never believed it is a “gold” standard test, it is a legitimate and helpful and expensive yet necessary tool to fight and understand Covid 19.)
I feel lucky that as a seller of rapid tests, our brand being the Abbott Panbio, very early in the process, before we got approval from FDA, which is when we were allowed to import, we already pledged publicly, to friends and DoH and even Abbott, all income from this endeavor will go to charitable health care initiatives. At least it gives me a certain ability to write about this, with less baggage of being accused of making tons of money: there are so many cheap and substandard tests out there ahead of the curve, making those tons of money is an illusion for us, and an impossibility, unfortunately.
The initial plan was to form some kind of think tank for health care, as I admit being impressed with the knowledge I saw on the internet that groups in the US were producing, but I consulted people like Kenneth Hartigan Go, MD of AIM, who matter-of-fact pointed out, the shortage of talent will be a very difficult hurdle. I also asked Acting Neda Secretary Karl Kendrick Chua if he had a speaker in mind from abroad we could connect the economic team to help understand the pandemic’s impact on the economy, and sadly when contacted, of course the resource person was afraid to travel. I also visited San Juan De Dios, thinking of what they need, and internally we even thought of doing a partnership with them for say their MRI or their ventilators, and the income can generate funds for projects for the Catholic Church. Earnings from the Abbott Panbio Rapid Tests will make it easier to be adventurous in exploring non-traditional businesses at scale, with profit the least of the worries.
I wish I could say this impulse is simply because our people in the company want to live our Catholic faith, and this is certainly part of it. But there are other reasons: likely the pandemic made many of us want to win some points on the Karma score board. But really, for me, it was listening as a boy to old Tsinoy businessmen discussing this or that business opportunity, and it struck me when an old man, successful in business, said he would never go into the funeral homes business, or pawnshop business, which are lucrative, but it benefits from the misfortune of people. That idea has never left me. To not benefit from the misfortune of other people.
Now that the anti-rapid tests movement and hysteria are on hyper drive, let me share my perspective as a seller. During day one of April, when the PCR campaign was at its high, and whatever else tests were there, echoing the global call, especially in the US, for testing: I sent a message to friends and customers, saying at that time that we were beyond testing. I am sure some of my good friends like Dr. Harvey Uy will be able to retrieve that message somewhere in their phones. All the hospital directors we served will have it in their phones and emailbox.
Why were we beyond testing April at the height of the panic? I thought we should all be sheltering, educating the public, and if there are funds, building bed capacity, learning and buying ventilators, making sure portable xrays are in the right places, especially isolation hospitals that should have been built as a 2nd and 3rd waves seemed likely even then. We should be social distancing at that time, and even then, after 30 days, I was already arguing the lock down was too long. There was no example yet of Vietnam in the Philippine consciousness in April.
Actually, because we are today in the post-lock-down stage, we should be testing however we can. April 1, I was already sending the link of the interview with Jay Bhattacharya, M.D., Ph.D. with the conservative and pro-market think tank Hoover Institute in Stanford University.
( https://www.hoover.org/research/questioning-conventional-wisdom-covid-19-crisis-dr-jay-bhattacharya )
One compelling argument is only antibody testing can give us a denominator to the numerator of positives coming out of PCR machines. We will get an idea the population’s infection rate if we have a numerator and a denominator, the number of people who already have the antibody within a given population. But I also pointed out in April, that to declare Filipinos negative, or immune, or of having antibodies will be counter productive, because no explanation of the situation, no education campaign was able to conceptually explain social distance yet in the vernacular. At hindsight, one could say, there was no viral video and song yet, on wearing masks, social distance, and the washing of hands; which they had very early, at hindsight, in Vietnam.
Imagine my surprise when a very good friend, a medical director, told me businessmen like myself whose overwhelming economic interests in rapid tests are giving Filipinos a false sense of security, thus the spread of Covid 19 today. (Of course medical doctors and their medical doctor kids never have economic interests – wink wink, let us not go there, please). Even he has my message about this “we are beyond testing” via text messages and email from me in the first week of April. I was surely aware of this problem before Abbott even reached out to us to distribute the Abbott Panbio Rapid Tests, and I have been very vocal about this false sense of security, whatever the tests, because the Philippines as a country just has no culture of science and of planning (certainly not at the level of scenario building). And finally, people who test negative in the PCR do not have the false sense of security that they can go out and have parties and basketball tournaments that rapid tests people do? Because they spent more? Because cross contamination never happens in the preferred laboratory? Education is the problem, not testing. Hardly anyone wants to educate, but everyone is pushing this or that “gold” standard. Most of the “gold” standard hardly qualify for bronze by the month of August.
I even have a month of April SMS to friends who write in Filipino to translate, in Filipino, the concept of social distancing.
But I was clear, to all friends and customers, and we have the emails and text messages for it: during the lock down, we should be in the capacity building and education stage: now that we are in the post-lock down stage, we should be opening the economy, we should be using all the tools available to test, to get the economy going.
In our belief that rapid tests are useful, the very first shipment of the 50,000 tests of the Abbott Panbio, we delivered 4,700 to the Department of Health as our support for its efforts, in support of the work of Secretary Francisco Duque, and then Undersecretary Rolando Domingo, now of the FDA as Director General. We also donated, at more modest quantities, to PGH and individual health workers and friends.
The claim of Abbott in its brochure is for finger whole blood, sensitivity is 96.2% and specificity is 100 %. These are, we just assumed, laboratory-controlled tests, and so let us give it a minus 10 % at least in actual use. Anecdotally, it has enabled our team to serve well in our work, installing and repairing medical equipment, and in moments of very scary situations when we feared exposure, or false negatives, and false positives in the PCR, the Panbio enabled us to have some kind of guidance on whether to keep the office open or closed. Assuming someone was exposed in the office, but the office people all 100 percent tested negative in the IgM, without these tests, we could have closed our office many times. So far, the swabs have shown that our decisions have been correct. One of the multinational companies we deal with had their engineers shelter for three months, without going out to help hospitals, and in July when they came out, three of their engineers tested positive; while our engineers, wearing masks, gloves, and face shields, worked every day in five months, have zero cases so far.
We should move as a community and society away from fear, and towards more understanding of the situation. The hysterical anti-rapid tests shouts are not helping anyone, except making those who shout feel good about doing something, but actually bringing us back to the stage of fear and confusion, and the 2nd Metro Manila and surrounding areas’ MECQ is part of that fear and hysteria.
There is no doubt there are flawed, imperfect, and even sham rapid tests: but the call to just totally push out or ban rapid tests is another emotional, flawed, hysterical reaction that brings darkness, not clarity. It is a misunderstanding of what stage we are in, and I argue, in the post-lock-down stage, we need a cheap, quick, mass testing capability that rapid tests offer. This moment of temporarily bringing us back to MECQ will prove to be a mistake, it mis-educates the public, and I have no doubt, it just killed hundreds of jobs that will just not come back. They just won’t. Being an entrepreneur, I also built a business from absolute zero, and the many restaurants and stores and other businesses pushed over the edge by this MECQ will condemn many people to years of poverty and hardship.
I have to say: every business, small or big, it breaks my heart to see them close. I know the blood, sweat, and tears to get a small enterprise going; never mind to get one earning. It is hell.
The LGU that uses the Abbott Panbio in all its checkpoints, including the airport, have as of today 30 Covid positive citizens, all in isolation, all part of the balik-probinsya program of the national government, and their health workers interviewed on the ground claim their decisive and imaginative leadership was helped by the Abbott Panbio. Other LGUs have more infected people in their communities and are glorified in media for their showbiz efforts. The PCR tests allocation of this LGU is used wisely, as they are not overloaded and blind, so they can allocate these expensive and limited PCR tests to those going back to their home province from Metro Manila, but also for health workers, political leaders, law enforcers who are needed to be serving, planning, and educating. (The photo at the very top of this essay of a child getting tested is from that LGU).
A former congresswoman/medical doctor in her facebook said LGUs just wasted their time contact tracing those who dealt with positives in rapid tests. Assuming these to be IgM positive, with what we know now, we isolate, and with the availability of PCR machines, we swab. We are assuming of course, they got an Abbott Panbio, or equal it. Assuming IgG, then there is nothing to fear, and with the Abbott Panbio, we have found near 100 percent reliability on those that also test positive in the immunology machines.
We adapt, we learn, we improve.
I get addressed as medical doctor sometimes in my dealings with people in the medical community, and I always have to, embarrassed, correct them: I am not a medical doctor, and humorously (I hope) add that although I do have a doctorate, it is a Ph.D in literature, and I have never been addressed as a doctor in my previous life, but I now write out medical prescriptions (haha! a lame attempt at Woody Allen humor). But with all the hysteria and shouting over rapid tests, one even proposing to hang a noose around my neck, I am just glad to have specialized in literature, more than any other subject that I eventually built a passion for, and I do have a passion for science and medicine now (I have read Siddhartta Mukerjee’s Emperor of Maladies on Cancer with great focus and enjoyment).
Albert Einstein is a convenient and respectable way to end this essay: “Imagination is more important than knowledge.” Why did this genius say that?
Indeed, in these times of Covid 19, our lack of imagination as a society and as a health care community is just plain obvious. Imagination, in fact, it is our only way out of this rut. Indeed, I cannot resist mentioning, it is the novels of national hero Dr. Jose Rizal that finally gave the fatal blow to the colonial foundations of Spanish Philippines: it is not his knowledge of medicine.
(please consider read reading these articles:
Arturo Dela Pena, MD is the Medical Director of St. Luke’s Global City. He is a man of many hats, being an active surgeon, administrator, academic, and educator. Contrary to the serious demeanor, it always does not take long for him to crack a joke. Yet, underneath the good humor, the man is complex in a positive and interesting way: you enter his room and on his table is a Michael Cacnio sculpture of an anonymous every day man kneeling and kissing the ground to give respect to a crown of thorns. He has Ricardo Semblar’s book Maverick, which is on the radical transformation of a company in Brazil, also on his table, and this is for Dela Pena the management man. Yet under the book is The Teaching of Buddha, and only a pile of papers separate Facility Management and Safety Manual and the book Moments with God, together with the latest bulletin and journals of his medical specialty. This self-professed fan of Rod Stewart and the Beatles is deadly serious when talking about medicine and St. Luke’s Global City.
You wear many hats: educator, administrator, surgeon, academic. Which one is the more prominent one right now?
The answer of course is administration takes up most of my time, and as a consequence I have to cut down on my clinical practice, yet I cannot say it is less prominent in my life, because I give the same time to each of the patient, and without a clinical practice, I will not be in touch with the patient, which is important to my work as an administrator, and without my role as an educator in PGH, I will not be up-to-date not only with what is happening in my field, which is rapidly changing, but I will also not be up-to-date as to the kind of residents and training they are getting . The explosion of data is just incredible, and if you are teaching in front of these young people, you just have to digest the data in a way that you are unlikely to do unless you are there in front of them. All these hats are important, and I cannot say one is less over the other, as administration must constantly be informed by all these.
Yet in research, which is very important, and I am involved with the team of Dr. Adriano Laudico, I cannot say my involvement now is significant, unfortunately. But let me say Dr. Laudico and his team are doing good and significant research on the relation of female hormones to breast cancer. That is the advantage of the younger generation physicians is their training recognizes the importance of this integration of the many aspects that make a good physician. Their academic subjects even in freshman medicine are already being connected to the clinical practice. I have a daughter in 2nd year medicine, so I can see the difference.
What do you tell your daughter who is a doctor? What is the most important thing that you tell your residents that will make them good doctors?
I tell them to learn from the patient: see the patient for what is actually there. Do not just have preconceived notions of what should be or what is said in the book. This is what distinguishes a good clinician from the rest. My father is a farmer, and it is my great misfortune that I did not keep the brown bags he was sending me with his notations about his referrals. He would write in Filipino, for example, “Arturo, apologies, but this patient is asking for help. Please help and see what you can do, as she is complaining about excessive bleeding.” Later on he will ask me what was wrong with the patient, and I will say it was ectopic pregnancy. After many people have come to me through him with his brown paper bag notations, his notation would suddenly say: “This patient is having problem with excessive bleeding, please see if she needs a D & C immediately.” For some patients, later, he will have a note like; “Please see if this is appendix, and it might explode soon.” So I keep telling young doctors, keep examining patients, no matter even if you think it is a simple case of pneumonia, because the more patterns you see, the better off you are in seeing patterns, and yet you also learn that solely relying on patterns is not good, as you also learn that each patient is unique.
How did a son of a farmer become the Medical Director of St. Luke’s Global City, become a leading educator and surgeon?
You know, I recall it now and I still get goose bumps. I remember helping my father in getting copra in Talisay, Batangas, when I was a boy and I tripped: I literally found myself falling face down on horse manure. I remember the anger I had because my father could not stop laughing at me. I was so angry and crying, I said he should not laugh at me. My father said, and I still remember this very clearly, when he said: “Arturo, if you do not study hard, you will just be like me and you will have to work with manure. If you do not want to be like me, only by doing well in school can you become different from me. Or else you will be like me, and your son will be like you.” You know, that turned my life around, and I am convinced, if my father had the privilege of having studied all the way in school, he would have been a great intellectual.
Thankfully you were still able to study in FEU for medicine. How were you able to afford it?
I got to use the education benefits that my father had because he was a guerrilla during the war. My father had a town mate who was the college secretary of FEU and so we decided I should go there. The youngest sister of my father also married a lawyer, and they helped and housed me. They were my parents here in Manila.
What is exciting you in the medical profession right now?
Everything excites me. The opportunities in medicine right now are quantitatively and qualitatively very different from when I was a young surgeon. We are now in a position to improve patient care.
So this is the about the generational change in leadership?
Yes and no. Yes, Dr. Edgardo Cortez our President and CEO is a real visionary. He is really implementing brave and innovative changes in the hospital. But aside from the generational shift, there is more competition, so everybody has to shape up, at the same time there is more data available, so there are real metrics from which you could measure the performance of an organization. This is all changing medicine and hospital administration in the country, all to the betterment of the patient.
Yet it is not just the generation shift in leadership that excites me. The developments in medicine, the speed at which we are beginning to understand diseases, it is astounding. The time may really come when we can predict diseases in a person long before any manifestation is apparent.
There are those who are saying, the competition, due to the entry of conglomerates in the hospital business, are also escalating prices for the patients. What do you think?
Yes, that is true, they are escalating their prices, because they are in health care for profit. That is fine, but also, because you want them to put money in health care to improve health care. Yet we also realize, doctors’ owned hospitals, non-profits, religious-owned hospitals, public hospitals, they also provide another vision of health care, not just the bottom line and excellent service, and I am proud and happy with St. Luke’s Global in that our vision is not just profit, although I have to say, any hospital that is not profitable, except for a government hospital, is not sustainable as the expenses are big and constant. Doctors have, I would like to believe, a different take on running a hospital, compared to, for example, a finance man, or a banker. We have I think over a thousand nurses here in St. Luke’s Global, because we have to allocate a certain number for many departments and functions for three shifts, and you also have to have a backup for the holidays and leaves that are part of the package for employment in a hospital. If you are not profitable as a hospital, it will not take long for you to close down. To say we give the highest standard of care is very easy to say, but many ingredients come into play when you want that to be a reality, from doctors, to geographic location, to the culture of the country. Finance is a big part of that mix as well, we have to admit.
Speaking of location, how are we compared to for example the United States in terms of health care?
Well, it is the most expensive health care system, and we should have learned by now that expensive doesn’t necessarily equate to quality, especially in relation to health care. It is not a question of money for me, because even if you have all the money in the world, are you using it efficiently, wisely, and logically? Because of defensive medicine in the United States, where they ask you to take a battery of test just to protect themselves from lawsuits, when in actuality you do not need the test, it is not necessarily good for you, never mind the waste in your finances. You requests these test for academic reasons? Yes, if there is a reason, but academic reason is vague and has been a blanket rational to just getting the patient to go through all the diagnostic equipment available and I don’t agree with that.
Now going back to your question about going to the United States for your health care; unfortunately health care is not like building a bridge where engineering can compute for you up to the last bag of cement that will be used. The hospital you can standardize the process, the physicians let us say we can even standardize the quality, but the patient, each patient is different from another, and how that disease will develop or evolve you cannot predict with standardization. Maybe you can predict 85 percent of the patients, but how will you know your patient is the 85 percent? For example, you can operate on a patient for breast cancer, and in your research you can do comparisons based on age, economic standing, and yet not all of them will fall into the data; yet your patient is not only not a statistic, but you don’t know which part of the statistic she falls into. Of course if the statistic says the survival rate is this, it doesn’t also mean you will die of cancer. You may die of something earlier or later for a reason totally not related to cancer that you have, so I will study the data, but I will be careful in extrapolating conclusions from the data.
The simple standard should be: there should be the same standard care you get, in the best hospitals in the United States and in the best hospitals in the Philippines, except their culture is very different from our culture. For example, in many clinics or doctor offices, you cannot just show up without an appointment. For example, our hospitals are adjusted to our culture in accommodating watchers or relatives staying overnight with the patient. In many private hospitals, we have the facilities, up to a common pantry that watchers or relatives find useful.
No doubt the United States has one of the most cost ineffective systems of health care, but with the case-rate payment scheme, it is shifting to an opposite extreme in reaction to the excesses of the past, and this has an impact on the decisions of many medical doctors. The most important is what is necessary for you to get well, and I am worried doctors may begin deciding on what is only possible based on your case rate.
Steve Jobs: did his wealth and access to the cutting –edge treatments extend his life?
Maybe. But I really don’t know the specific treatment. Difficult to answer: what measurements do you use as to the reactions of his immune system to the disease or the drugs? How can you quantify this? I know it is not a simple adenocarcinoma of the pancreas, it might be some slow acting tumor, since a neuroendocrine tumor is slower. Is it secondary to the treatment that he received? We don’t know. There is a lead time bias that is important. The latest issue of Time magazine , there is a mention about ductal carcinoma in situ ( DCIS )where it used to be treated with radiation and a removal of the breast, now no treatment is being advised, because it is now seen to be only a premalignant lesion. The disease process now is better understood, and that is also what I meant earlier that the opportunities in understanding of diseases are simply different now, and as a result better treatments are also improving rapidly.
What have you realized now as an administrator you did not know as a doctor?
When you are not part of administration, sometimes you just think of your needs, so you request for the best and latest and most branded equipment, not realizing the fact that the hospital has to spread out its income to many other needs and expenses. Running operations means more than just toys for doctors. Running a hospital also means running things efficiently and as economically as possible without compromising on the patient’s health. And this again is where metrics for service, finance, treatment outcomes all come into play.
Are you saying we have the data?
We will get there. The CEO of St. Luke’s, Dr. Cortez, made a decision of acquiring a data gathering system that will put the data in our hands. We have been going around the world looking for the best system, and we are beginning to narrow it down to only a few vendors. Of course having the best and most accurate data gathering software doesn’t mean anything if it’s too complex or tedious, then we won’t get the cooperation of doctors and nurses, and the whole thing becomes useless. We already tried to do it ourselves and to develop our operating systems, but you realize, the best hospitals and system developers took 20 or 30 years to finally get it right, so you go out and try to find a well-developed system that you can purchase.
Who are the most influential doctors in your career?
Dr. Antonio Limson and Dr. Adriano Laudico, who I always call the best chairman we never had. He was a visionary, like Dr. Limson. They had the vision to develop sub specializations in our field. They sent me to Toranomon Hospital for further studies. Of course in a way I have the best of both worlds, because PGH has the research and training, but there are limitations as well; and the opposite is what we have here in St. Luke’s, which has the private sector need for optimum efficiency, speed, and cutting-edge equipment.
Maybe this is changing? PGH has a big budget for equipment purchases.
I am not sure if a big budget necessarily equates with using your budget efficiently. In the area of purchasing for example, usually government hospitals allocate funds on the basis of democracy, when the more efficient way really is to define your strategic objective as an organization, have the whole organization buy into the vision of the leadership, and the purchases will be based on that strategic objective. I am not sure if you can run PGH on the basis of getting a wide consensus as to strategic objectives. This is not about democracy. Before you can do all that, you have to know your core competence, and you must know where you want to distinguish yourself as an organization. Strategic intent is the most basic for management to decide on purchases. But no doubt PGH has a very strong faculty.
I guess the next question will have to be what distinguishes St. Luke’s from the rest?
The leadership. The President and CEO here, Dr. Cortez, is a real innovator, and his direction is towards building a culture where people can be creative in solving problems. We have invested, through his efforts, on something that changes the treatment and chances of anyone who comes to us with ovarian cancer. Adenocarcinoma of the ovary, for example, we do chemotherapy intraoperatively, heat it up to 42 degrees and we find that the survival rate increases. Many hospitals are looking to wet lab and animal labs, but we went to Israel and bought a simulation system that helps our doctors have more opportunities in training. We are into robotics now as well.
How do you deal with death as a medical doctor?
With the patients, I think it should always be with sincere empathy, and with honesty. I have experienced the loss of my only son when he was only 21 years old, and experiencing something like that changes you in very definite ways: it is never the same anymore after something like that.
It is cruel for a doctor to give people a false sense of hope. It is unethical and immoral. One of my most memorable patients was brought to me by a friend. She comes from one of the rich families in the country. When I saw her, from her workup, I knew she had advanced liver cancer. I gave her the objective clinical diagnosis. She was stunned. She asked for her chances, and I told her the truth that short of a miracle, she did not likely have a lot of time in this world anymore. She thanked me. She said she was wondering why she was not getting well and all doctors were telling her she had this or that, like diagnosing her with hepatitis: nobody wanted to tell her the truth. So, after seeing me, she made her plan to go Lourdes in France, and she asked me for the necessary medical certificates, and she made her pilgrimage, made side trips to relatives living abroad. In fact I remember she asked me what she could get me in her trip to Europe, and I jokingly said one of those famous shirts that has a crocodile as its trademark. That was July. December, on a Friday, on her birthday, she kept calling me because I was the guest of honor for her birthday party, but I was too busy. That was the last time I had talked to her. March she was brought to the hospital for hepatic coma and she died. After two weeks, her two kids came to visit me. They informed I was in her last will and testament: it said that as long as they can afford it, I would get 12 Lacoste shirts every year. I started getting them every December, because she knew December is my birth month, and in fact, I still get them but I had to request, if they insist on giving me the shirts, they do it bi-annually or quarterly, so I don’t end up with the same sets of shirts every year.
Are you religious? You have spiritual books here on your table?
I came from a Catholic family and went to questioning the existence of God and becoming rebellious and wanting immediate social change, and I believe I have come full circle. I have come to believe that when there are no answers to questions, the answers maybe with something higher than us.
What books have you enjoyed that you would like to share with our readers?
Few people can write with social science data like Malcolm Gladwell. I have read Blink, Tipping Point, What the Dog Saw, Outliers. I would encourage people to read him. The very interesting book I always remember is by Captain Michael Abrakoff. His first book is It’s Your Ship, and he relates how he turned one of the worst-ranked US navy ships to become the top ship in the navy in efficiency, cost control, gunnery score in his two years of commanding the ship. It is an amazing book, on how he got feedback from the sailors on how to avoid the rusting of the metal, and he implemented it, and because of that, it meant less time for people devoted to repainting the ship and the time was allocated for some more productive endeavours. It is a simple management book but very good. I am looking forward to this book on my table, Maverick by Ricardo Sembler. It is another leadership book.
Are you a maverick?
No, I don’t think so. I would like to believe my leadership style is to always work within the rules. I think a maverick goes outside the rules. But more than anything, I hope to be remembered as a doer, that I do things that are assigned to me. That I get things done, and not just talk about them.
What is your definition of a good leader?
A good leader must first be a good follower. A good leader must be able to motivate people to get things done and to aim for higher things.
For people into issues of design, creativity, books (or even the very issue of the survival of physical books), Designers and Books is the best site to visit, and visit and patronize regularly. We are not much of designers in our company, as we are really a management and trading and medical equipment company; but we are aware of the importance of the concept and execution of design, not just in designing objects, but in designing as an overall concept for management and life. The sheer strength of this site is that it has top people involved in design (fashion, furniture, architecture, interior) listing their favorite books that they generously share for the curious or the fan or the just driven to learn. Okay, those out to change the world will also benefit from a visit to this site.
A small interesting fact is there are hardly any management books in the over one thousand books recommended by these high achievers. Having looked at hundreds of the recommendations, I only can recall Peter Drucker’s Innovation and Entrepreneurship as a classic business book which made the master list (from industrial designer Tim Brown), which tends to affirm the dubious usefulness of business books as being helpful to people out there trying to set up innovative enterprises. Not surprisingly, books about building or designing classics like bicycles and violins have made the reading list of many people. Yet imaginative literature, or fiction, are all over the site and James Joyce’s Ulysses and Italo Calvino’s Invisible Cities being the most cited; and our personal favorites, Herman Melville’s Moby Dick and Nabokov’s hilarious Lolita are there as well (gratifying and flattering those of us in the company who majored in literature, not the more fashionable design or fine arts, in college). This tends to affirm our belief, spoken of as well by Michael Eisner (former CEO of Disney), that literature (novels, short stories, plays) are essential to feeding the human imagination to create, innovate, and interact with and in the world.
Books are in a precarious time these days, if we are to believe many who have declared the death of books as we know it; but for those of us who believe that print is still very much viable, which the recent issue of the Economist (October 11, 2014) shows is making a strong comeback for publishers in terms of income, this site is an incredible resource, a delight to visit, and we can only hope it thrives without having or needing to be acquired by Amazon or some such giant, whose love for books is at best questionable (no matter how innovative they are). We definitely, even if we have never won its regular book lottery (which we admittedly have), love Designers and Books. Visit the site, learn, and be affirmed that intense creativity is happening all around us. We can even contribute to that great human endeavor, and this site encourages that kind of magical thinking. Congratulations to its editor Steven Kroeter and his incredible team.
We have opened discussions in our website with all kinds of leading medical doctors, and with the best among them, there is a clear recognition that for our health care to improve, we have to have thriving manufacturing industries (good jobs are crucial to good health), research (to be at the cutting edge of knowledge for health, but as a consequence in order to start real manufacturing), and quality basic science education (in order to build a culture of producing goods and knowledge). We are starting a series of interviews with those who can start the conversation from a non-medical doctors point of view, from academics, industrialist, politicians. We start this series with Reynaldo Vea, Ph.D, who is the President and CEO of Mapua Institute of Technology. He graduated from the University of the Philippine with a degree in Mechanical Engineering. He earned his Master’s Degree in Naval Architecture and Marine Engineering at the Massachusetts Institute of Technology, and his Doctorate Degree in Engineering at the University of California at Berkeley.
You are an engineer, teacher, administrator, scholar: which one is your predominant role for you?
First and foremost I have always been an administrator of schools. I did professional practice for a short time, but never in the Philippines. I designed off-shore supply vessels for the Gulf of Mexico. I designed container ships and tankers as well in San Francisco. But this was not for any long period, as I immediately came back to the Philippines to begin my academic career in the University of the Philippines.
What was the motivation in coming back to the Philippines after having earned your degrees in the United States? Or did you belong to the generation that still wanted to come back?
Basically we wanted to contribute to building the research capability of the country. We did hear about many coming back and getting very frustrated because the research infrastructure was not there, and so they go back to the United States. We wanted to break that cycle. When we came back, there were no vacant positions in UP, and they could not give us the title assistant professor. We jokingly referred to ourselves as api , the Filipino word for oppressed, which we used as an acronym to stand for the association of permanent instructors, because we were still pegged as instructors in the University of the Philippines, in spite of the fact that we already earned our masteral and doctorate degrees. But the administration moved quickly and gave us support.
Engineering is now the priority for many things and programs in the University of the Philippines. During the term of President Gloria Arroyo, she donated a big sum for the infrastructure of engineering.
Yes, but it started long ago, it was a long process, which we can see the fruits only now. During my time there, in the 1990s, because the stars were somehow aligned that the president of the university, Dr. Emil Javier, is a scientist; and the President of the Philippines was Fidel Ramos, who is an engineer: it was at that time that the concerted effort to build the student base, the infrastructure, the profile of engineering was really strongly pushed. We presented even at the level of the president’s cabinet as to a national vision for the University of the Philippines School of Engineering. The land earmarked for engineering where the buildings are now being built came from that time. But a lot of ground work was also already done at the time of then Dean Francisco Viray, who I served as associate dean. Dean Viray of course eventually became Secretary of Energy during the term of President Ramos.
Do we have research projects from the University of the Philippines that we can show the world and be proud of?
From what I have read of what are on stream, we may not be in the map yet, but for sure we have the PhDs who are capable of high quality research. I have no doubt something will come out of it, but we also have to set up the infrastructure, which I think they are doing in the University of the Philippines, for the commercialization of the research output. There is a real and credible improvement moving towards producing very high quality research. There is a technology transfer office now in the University. In the area of Radio Frequency Identification (RFID), or the transfer of data using the magnetic field, there are interesting advances. In the area of optics in hard disk drives there are also interesting advances.
When we train great engineers, do we have jobs for them when they are done with their studies?
The semiconductor industry and the electronics industry have been pleading for more and better engineers all the time. They are crying out for people who have advanced degrees. Of course if we want to move up the value chain in electronics, we will really need engineers who have advanced degrees.
Are we still at the level of assembling chips?
No, we are already producing products based on chips that are competitive globally. Integrated Microelectronics Incorporated of Ayala is ranked eighth worldwide in the microelectronics industry, which is great, but overall the developments have not been fast enough.
Is manufacturing still possible in the Philippines?
I think the stumbling block right now is China. They still manage to manufacture at a very low cost. It will be very difficult for us to compete. However, the wages in China are said to be rapidly increasing, and maybe that will present us with an opportunity. But we can’t just have the engineers, we also have to have highly trained educators, researchers, managers, industrial park designers. It takes a lot to have that system, culture, and infrastructure that can produce ground breaking technology-based products.
I have heard Dr. Roger Posadas arguing that South Korea and Taiwan are great models for the Philippines, but I argued that the United States poured in large amounts of money to help these two countries because of the cold war politics at that time.
Well yes, there is one factor that we don’t have; there are no Filipino engineers and managers in significant numbers, and if we have them studying and working abroad, we want them to come back and sacrifice, and with government support, to build and innovate here.
Morris Chang is an incredible story, of bringing chip manufacturing to Taiwan. He isn’t even an entrepreneur, but with government help, he was able to build Taiwan Semiconductor Manufacturing Company Limited (TSMC), which has become a global powerhouse in manufacturing.
They did a study in UC Berkeley and they took snap shots of the first and second generation leaders in research, engineering, and management of Silicon Valley. The Filipinos are just not there in substantial numbers. While people from India, Taiwan, Japan, South Korea are there, and many of them went back to their country, using their connections in the United States, to build industry in their home countries.
We also need to scale, as the UNESCO benchmark would say we need 34,000 research scientist and engineers for our population of 100 million, and DOST last calculated that we only have 13,000. So how do you jump from 13,000 to 34,000? And the ideal of course is for that 34,000 to have PhDs. We can do it in 10 years if we produce around 2,500 PhDs a year: again, the question is how do we do that? You have to send out at least 2,000 scholars to do their PhDs every year. The government we now know has the money, but the money just ends up in the wrong hands.
Will these engineers come back if we send them abroad to study?
The record has actually been good. I worked administratively as associate dean to send 20 scholars abroad for their PhDs, and everyone came back, except for one, and the only one who did not come back paid the University for his studies. We should not be scared. People do come back. To stay here is not only a question of monetary rewards, you also have to give them an environment where they can find fulfillment.
So when they come back, don’t get them stuck in teaching Physics 101?
Or worse, make them academic administrators. (Laughter)
How does the University of the Philippines compare with say other top ASEAN universities like the National University of Singapore? Are we okay?
Yes, no doubt we are okay. Our problem is we have too few of our students and faculty going out for their PhDs. But those who do go out to earn their PhD, most do well academically, so that is already an indicator that we are not missing anything in our own universities. I myself when I went to the Massachusetts Institute of Technology found that my training here in the Philippines prepared me well for what I had to face abroad.
In going to MIT, what struck you most that made you realize, this is a First World institution?
For sure it is their research. Of course when in UP we were analyzing motion of bodies, for example, in 2D, while in the MIT it was already in 3D, so there was the facilities advantage, but this was because this was MIT, as most universities at that time in the US were also still using 2D. And of course in their undergraduate engineering, they already had advanced engineering mathematics. But other than that, there is not much difference. I do remember they did really overload the students with reading materials.
When you say overload, does this mean it was still humanly possible to digest all the materials given?
No, impossible to digest everything. But that is the atmosphere they want, the atmosphere is very competitive. The best will survive. The system in MIT was called being graded on a curve, so some are sure to get As, and a certain number flunk. They like to say getting an education in MIT is like drinking from a fireman’s hose. You won’t be able to catch everything.
I remember listening to an entrepreneur who has made it big saying the only advantage he had of going to MIT was that in college in another university, he was thought of as the smartest guy in class. When he went to MIT for his masteral degree, his first exam grade was so low, he ended up locking himself in the dorm to cry. He said the humbling experience has been good for him.
Oh yes, there are many stories like that. It really happens.
Is this why some of the research of their graduate students are good?
Yes, but it is not just that: but there is a whole organized effort to support, publish, commercialize the research results. You become just part of a large undertaking. Even if you just contribute a small but original research to this large undertaking, then you become part of a big breakthrough. It is not just one individual in a lab, although there is that as well.
How was your transition from U.P . to Mapua?
Well, when I first came I had the reflexes of an administrator of a state university. Mapua’s existence is only made possible by its wits, since it is a private enterprise, meaning unlike a state university which will always have a budget no matter how small, we have to find a way to generate resources to keep the school going and to keep upgrading. I have been lucky that the stockholders of Mapua have been very supportive. In my first year here there was hardly any computer, within a year we had almost 2000 computers. We were the first to get a gigabit network, when no one else had one. We invested a lot in infrastructure. Our proposals to keep improving the standards are all supported by the school’s owners. Of course UP has changed now, and faculty can also now propose ambitious projects. We were also the first school in the Philippines to be accredited by the US-based engineering school accreditation body. We have also raised the profile of the faculty. We now have the full-range of the masters programs in engineering, and we have five PhD programs.
What kind of engineers does Mapua produce?
I think we produce engineers that are out in the field, the problem solvers of the industries that require engineering. Our students, when they graduate, I think tend to stay in engineering for a long time. But we also want to go beyond that, and so we have a building that will be finished soon, which is a building that will be devoted to research.
Are we able to retain young engineers in the country?
Many leave, but what can we do but to keep training engineers.
We are a population of 100 million. Even Israel, a very small country, admittedly a great recipient of US money, has been able to scale their software development for example. People were saying in that Roger Posadas talk in the Diliman Book Club that maybe what we have is a cultural problem. The culture of consumption is just too strong now, for example.
If you read Nick Joaquin on our supposed culture of smallness, maybe there is some validity in that. We are not ambitious enough. Japan in the 1950s was being laughed at. People said, don’t even buy toys made in Japan, as it was supposed to be of such bad quality it was dangerous to a child’s health. Samsung of Korea was considered low end.We have to want to make it badly enough, the way these countries did when they decided they wanted to become an export-led industrial country.
Maybe we should just give up, for those of us interested in manufacturing. I read an article where John Gokongwei said the best chance of the Philippines in manufacturing was up to the 1970s, and after that, the chance passed us already. Dado Banatao in the ASEAN Integration forum organized by the AIM basically answered my question by saying it is impossible for us to have a real manufacturing, since even Singapore has given up on this.
I disagree. The story is never finished. No outsider would have been able to predict the South Korea of today just 50 years ago, or the China of today just 30 years ago. The face of manufacturing is changing. If you can plan for the coming changes, like hyper automation, maybe you have a chance. The systems and process do not remain static and unchanging forever.
For me we just have to get the politics right, maybe that is not the right term, but we need some kind of process of maturation. We must also remember that the story is not yet over. Countries which supposedly got it right, also sometimes unravel all of a sudden; those considered hopeless are suddenly emerging as industrial giants in spite of say their size, or previous leaders.
What can industries do?
I think industries should just tackle the basic issue of productivity, we have to increase our productivity. We have to educate our labor force to be better, more productive, and more imaginative.
If you look at the instability of economies in Europe, you can see the most stable is Germany because of manufacturing. In Asia, Korea is also powered by manufacturing, even if they are greatly threatened by China.
Yes, you really need to create things. Harry Turman, after World War II, when he was president of the United States, asked what were they going to do now that the war was over and there was so much they had developed in the sphere of technology because of the war. Vannevar Bush, the inventor of the radar and vice president of MIT, answered in his capacity as one of the key advisers on science to the government, that their national mission was to dominate commerce through science and research. Basic research in schools and applied research in industry have become cornerstones in the rapid growth of the United States after World War II. You really have to work on the basic science before you talk about anything else. We must also realize that it did not happen overnight for the United States. There was a lot of preparation and confluence of events.
What books would you like to share with our readers.
I forgot the title, but there is collection of science fiction stories by MIT professors and students I thought was very good in showing me the future, or at that time the immediate near future. I thought the collection was amazingly accurate in many of the speculations of the authors about the future. Nicolas Negroponte’s Being Digital may be a bit dated, but I thought it was very perceptive in showing the relationship of technology and society. These two books I would recommend to anyone interested in issues about technology and the future.
There is now some criticism of these young and new billionaires channeling their wealth to space exploration and some such grand projects. Some argue the money is best spent elsewhere, and these capitalists are now determining the science agenda by the sheer fact that they have the resources. What do you think?
Science is always about exploration. I am all for it. If we stop exploring, what will happen to the human species?
Many of the doctors we have talked to, like ophthalmologist Harvey Uy, like you, talk a lot about the need for a good basic science education. Please give us an idea what is a good teacher. Who are your good teachers in engineering? Why were they good? What is a good basic science education?
Edgardo Pacheco and Oscar Baguio were my favorite engineering teachers. You take their exam without a calculator or a slide rule, and maybe you can finish the exam in 15 minutes. They were not worried about your not having to do a lot of numbers crunching, but it is really the principle behind the problem that they want you to understand, not the numbers crunching. I look back and realize their exams were really elegant and well-thought out. They were very committed teachers. They really provide students with the right environment to learn. You could really see their commitment to teaching.
Yesterday, we saw an announcement in a business paper about an upcoming workshop on improving work systems, to make manufacturing and services more efficient: this is for Lean Sigma Six. If you want to be certified to be a consultant or to do lectures for this particular way of approaching quality control and efficiency analytics, they have different grades, black belt being one of the highest. Wow. What caught our attention was the mention that on the area of service efficiency, a vice president of one of the biggest banks is there to talk about how to delight and serve the customer. It caught our attention because every time we are asked to deposit money in someone’s bank account, say a travel agency in an emergency to book plane tickets and hotels, we always dread it when the name of this bank comes up.
Their branch in Ortigas may yet qualify as one of the longest lines in Philippine banking (yes, some hyperbole, but some reality there as well) with only three, at times because of the lunch-hour break each of them deserves, only two tellers, even one when someone is sick or is needed in the vault to process the entry of cash from the armored van. Our office is in a business center of Metro Manila (Ortigas): you can imagine how chaotic it must be in other business centers like Makati, Binondo, and Cebu. The same top bank just had its president retire to high accolades; a bright, popular, certainly a nice guy who has an Ateneo de Manila University undergraduate degree and a Harvard Business School MBA tucked under his belt. Never mind the Management Man of the Year Award. This same bank has a cutting-edge leadership program for its executives, tie-ups with Harvard Business School, a resident Caucasian-American to just provoke and challenge the way things are done.
But in the end we realize: all that does not mean anything. “Culture,” according to Peter Drucker, “eats strategy for breakfast.” And unless there is a massive overhaul of its culture in this bank, all the Michael Porter-photocopied reading materials on strategy and competitive advantage, all the right diplomas plastered on the walls, all the right sound bites won’t save it from the bad service it offers customers. Why they cannot figure it out and us geniuses here in Sunfu Solutions can? The bank’s size alone protects it from having customers flee in droves, as its branch network is one of the most extensive in a country of islands.
Is it simply because, as legendary editor Tina Brown said: “It’s really, really difficult for the old behemoths to stay nimble in an era of such disruptive innovation. Elephants can’t tap dance” ? We doubt if it is that easy. To say what Brown said is to buy into the mantra that corporations are by default slow, wasteful, and unresponsive to customers. Organizing corporations is easily justified because of its ability to get massive undertakings executed, but supposedly in an efficient and timely way. You can’t get to build an oil rig or hospital building without a massive organization. Sunfu is able to detect the flaw in the Bank of Philippine Islands because it is small, nimble, always desperate for time? We think it is because senior managers are expected to routinely, even if only occasionally, as part of our company exercise to do the work of its most junior staff. Meaning our senior management people go to the bank, pick up a customer from the airport, and join in equipment installations in far-flung provinces (Palompon in Leyte anyone?), as a management rule in making sure we face reality and not just face the balance sheet, we do not just meet long-existing and happy customers, and we do not just drink the kool-aid we offer. Every time one of us senior managers do this kind of work, or exposure, or quality/reality check, inevitably something will come up in the next company-wide meeting about how to avoid complacency, how to serve the customer better, what equipment or systems need to be upgraded, what rest period a personnel will need from the daily grind of a routine. Knowing reality and experiencing it is definitely one of the most important management tools: certainly better than a piece of paper saying you have gone through the Harvard Business School. A doctorate degree holder in business management who happened to be a president of one of the biggest universities in downtown Manila once told us she had never taught a single class in this university where she was president. She did not see it as being part of her job. It was immediately our conclusion that it explained why the university she managed was in shambles. At times like this, in spite of our love for management books and management gurus, we get our very healthy dose of skepticism that they even help us at all in improving.
The photo above does not capture at all the scene in the evening of the 40th day after typhoon Haiyan had hit ground zero. It is a photo, taken from a moving van, of a long road in the still no electric power Tacloban, where thousands of candles were lit up on kilometers of the road to remember the thousands who died during the storm. We don’t want you to think we take this event lightly, as the title of this article may suggest. So what does a start-up movement have to do with disaster and relief operations where so many have died? A lot, if we are to base it on what we have seen in Tacloban, Leyte. Let us begin by tackling multilateral organizations. There is no bigger organization or bureaucracy in the world, probably, than these global humanitarian organizations (Medicin Sans Frontiers, Red Cross, International Organization of Migration, World Food Program, the United Nations). We can even say these groups have some the strongest brands in the world that will be the envy of equally large, but for-profit organizations, like Coca Cola. Would you stop in the street to give someone money for whatever charity Coca Cola is working on, or for some product the company is developing? Think of UNICEF or World Vision in contrast.
We have read so much about the unintended consequences of aid agencies swarming places like Africa; like capturing local talent that eventually joins the aid agencies’ exit of the area. We never expected to experience some of these unintended consequences, and of all places, in the Philippines; not a rich country, but by no means is it wallowing in famine or war. But as soon as our plane landed, we knew it was a different Leyte we would be seeing. In spite of the barrage of television images, and the usual sentimental and caramel-laced ABS-CBN reporting, nothing prepared us for what we saw. From the air and on the ground, we saw dozens and dozens of white tents, army helicopters, fallen trees, and houses and buildings torn to shreds: it was a scene straight out of the movie MASH (about the Korean war), or some B-movie probably entitled “World War III.” This is serious business: and the word “calamity” doesn’t even begin to describe the gravity of what had happened, especially for us who have many friends in Leyte.
There are two ideas, or tools, we want multilateral aid agencies to explore: “customer discovery,” which “searches for problem/solutions fit,” and “get out of the building,” which should lead to the concepts about stating your value proposition, pivot, and innovation. (See our previous post on Steve Blank and Saving the World). The people of the Start-up Movement, from Steve Blank to Eric Ries and many others, have taught a lot to entrepreneurs who are inventors, software programmers, businessmen, corporate executives. Non-profits, especially gargantuan organizations like the United Nations, have a lot to learn from the movement. Eric Ries defines a start-up as “an institution, not just a product, and so it requires a new kind of management specifically geared to its context of extreme uncertainty.” There is no more uncertain situation that probably surpasses any business environment of a start-up than a few hours or days after a cataclysmic disaster hits a locality.
Who are the customers of the United Nations in Leyte? What do they want? We at Sunfu think multilateral relief organizations are overly concentrated on relief operations and their operational/logistics capabilities, as probably perfected in their business plan, but the creation of their business or execution model is largely flawed from the start. For one, the scale of the operations is so big and the resources of the multilateral agencies so massive, they create problems with their bigness that, having read about these problems over two decades ago, we realized they haven’t learned anything from the criticisms of their host countries that we have read about. For one, almost all the hotels have been commandeered by multilateral agencies, like the United Nations: they just take whole buildings and whole blocks, and in a short-sighted view it looks like they are helping local businesses, but in the end, they are actually hindering it because all of a sudden, the whole island’s operations shift from getting back on their feet mode, its disaster relief mode is prolonged. Now what is wrong with that? A lot.
The real customer of these relief organizations is the country. The whole interlocking relations that make the flow of life possible has just stopped. People from outside the island of Leyte, or even just the city of Tacloban, will have a hard time moving in to help or bring back normalcy into the place, to look for family, or to begin looking and connecting for business opportunities, because all of a sudden, there are no accommodations for months, all the restaurants are filled up, and so life is in a stand still because the multilateral organizations have a whole set of checklists they have to fulfill in order to report to headquarters in New York, or Geneva, or Paris that they have done their jobs: the right photo opportunities have to be taken, the right video clips have to be shot, and as Ban Ki-moon appealed for today, more funds would move in to feed this cycle. The infrastructure of the island that survived are being commandeered by the size, good intentions, and wealth of these giant aid agencies, which feeds more the need for relief, and we fear, they will further institutionalize mendicancy. Most hotels, even lousy hotels, have been booked for until June 2014. Do aid agencies know of these consequences? Do they know their customer?
Part of the panic, which fed into the looting, was caused by the fear that there would be no food available commercially. Money thus becomes worthless. Yet for us, the Sunfu team, it took us hours to find breakfast, because the available restaurants were filled up with aid workers, some with the insensitive posting on the entrance of an establishment saying this or that restaurant is exclusive for this and that group. The result is some of us had to go out for hours looking for breakfast, losing our patience and temper a few times, because the paratroopers of agencies like the U.N. have not been going out the building, or in this case, their hotels, except to distribute relief, do site inspections, and prepare for the arrival of agency bigwigs. But the area, the city, or even the whole province will not rise if the ecosystem of the whole province is under the strangle hold of multilateral agencies that want to make sure their tents are up, the food packs readily available, and they have done their mandate. Who can argue with that? A comment from one of the barangay captains, which I thought worth repeating: “The stores are beginning to open, which is the best sign that things will go back to normal.” But the aid agencies are hindering the flow of goods as trucks and other kinds of vehicles have been rented out at incredibly high prices. In fact, she said if the looting did not happen, whatever the devastation, people would have been able to pick themselves up faster. The point is get the customers up their feet, and the fastest way is to give them the capacity to get up: if you are in a medical mission, after the mission of a few days, just enough time to give the local doctors to recover, they leave them capacity to do their jobs. But that would be very expensive, and less dramatic. Not much photo opportunity, and fewer occasions to have contact with the media and the general populace. The validation of the customer therefore should not be in that the patient is not dead, or is up and about, but the validation is if their lives have gone back to normal as soon as possible, or is it even better and more productive than before. From our angle, what we see is most multilateral agencies are there to help, but their help ends with the “feeding mission,” or the “medical mission.” Tzu Chi, the Buddhist charity organization, seems to have gotten it right. They immediately did a work for money program: help clean up certain streets of debris and you get money. That helped clear some streets. They also had a medical mission component. Yet they also just distributed money, and we are talking about P10,000 to P20,000 (in US dollar terms it’s somewhere at the minimum of USD200 to USD500). The group gave people capacity and capacity immediately to get some of the resources they knew they needed and wanted, and it gave some life to the local economy. Tzu Chi left immediately afterwards, and its members were not in the way by hogging resources of the place (very Buddhist).
There were sardine cans from charity organization being sold in the market by recipients, hardly any takers, as canned sardines coming from charity organizations flooded the island. Recipients of these sardines were simply sick and tired of sardines, after weeks of nothing but sardines. They want variety, they want to move on, they don’t want the same fare day in and out. Inedible relief food packs have found their way in the market: with hardly any takers. This is not corruption, as some in media have claimed: this is the market somehow throwing out (vomiting) the food it is being fed, trying to monetize the situation in order to get going. One of the biggest hits, and the long lines of people waiting for their turn was the best proof, was when Mayor Sandy Javier’s restaurant, Andok’s Manok, opened: people patiently waited for hours to pay good money to get some juicy roasted chicken. Nothing like good food to heal the body and uplift the spirit. Even we fell in line. No doubt his being mayor of a small Leyte town and he is somehow also related by party affiliation to the province’s governor helped, as government electric generators helped light up the establishment’s surrounding area. But good food is good food: whatever the criticisms were muted by great hot crispy juicy chicken.
We know it sounds callous to be so calculating, at the same time critical of multilateral agencies who certainly want to save lives as well. But the multilateral agencies we observed were actually not looking at capacity building: they were looking to yes saving lives, but they were simply also looking at this as a job, a good job, a serious job, a vocation even. But they were not looking at this as an entrepreneurial enterprise that would fold up if it didn’t succeed in hitting its goals of making the customers happy, or getting the customers’ lives back to normal, immediately. And here is the other suggestion we can take from the start-up movement: verbalize what you or your founders are trying to do. If I am to just cite two perceptive and very interesting articles written about the disasters that have happened to the country, the phrase that stands out is “capacity building.” This is what is needed: capacity building. Very important. Equally important is to ask: But capacity for what? This is not about giving the fisherman boats and nets to fish: it is a lot more than this.
The first article is by Gabriela Luz, who works with Oxfam. She writes in the Philippine Daily Inquirer about what has happened to them in earthquake-struck Bohol, after Haiyan devastated Leyte: “In a natural disaster, the immediate assumption is that the most vulnerable are stripped of basic needs: food, water, shelter. There’s a race against time to deliver aid that would meet the big three. We in humanitarian agencies have been working in emergencies for so long that we’ve broken down aid to food packs, hygiene kits, water kits and emergency shelter.
“What happened in earthquake-struck Bohol was that agencies working on the ground were still trying to meet these needs when Yolanda hit, and then markets instantly dried up. Cebu was the nearest large market and logisticians trying to procure supplies were shut out. Supplies coming into Tagbilaran were suddenly diverted to Cebu hubs because the needs were bigger and more immediate in Yolanda-hit cities with zero systems.
“Granting that you can purchase the right number of aid kits needed, there’s still the problem of getting these in. What happened in Yolanda is that places like Leyte had no local suppliers. There were no vehicles, no fuel, no trucking. Everything had to be sourced from the outside. You’re scrambling to get the next available vehicle—but you’re not the only organization trying to do so. Suddenly, suppliers who could bring relief in were in high demand and could control prices. It was costing up to P10,000 just to rent a vehicle. Trucking companies were canceling arrangements in the middle of the night, right before a distribution, because of higher bids worth more money.
“Hand in hand with resources is the human element. In the humanitarian field, only a relatively small number of people are equipped to work in emergencies. Finding someone to do emergency work means finding a person with the technical expertise, knowledge and experience not just to respond but also to figure out how to go beyond response and move toward recovery as quickly as possible. Immediately after Yolanda, experienced humanitarian workers were being pulled out of Bohol to work where the need was greater.
“Recognizing that a competition of emergencies can happen is important because the pressure of it consistently happening should add to how we understand the scale of preparing for disasters. Here are some things we should consider to acknowledge this problem:
“Capacity-building and going local. We know that we are a country overrun by disasters and that it’s going to get worse. And we know we don’t have the personnel to respond to this on our own. We need to spread the knowledge, the capacity, around, so if we ourselves can’t do it, then we know others can.”
It is interesting to read the article because coming from the point of view of someone who works for a giant aid agency, she looks at capacity building as being prepared for disasters. While we advocate for start-up tools, we also advocate capacity building, in allowing the locality to figure out what they need to be strong, not for disasters, but for life, maybe with the help of aid workers getting out of the way after the initial stage of relief: or at the very least, to get out of the relief mode and immediately into capacity building, not for disaster preparedness (as Nassim Taleb would say, there is no way of preparing for Black Swans, but there is a way to be Anti-Fragile), but to be strong and have a mind set of strength by helping provide the mental tools to have the mind set of running their lives, or households, or employment, or companies as start-ups. The whole NGO and multilateral aid agency community must get out of the disaster relief mind-set, and it must get into the entrepreneurial start-up mode.
Here is another article, this time by Art Villasanta and Peter Galace, also published in the Philippine Daily Inquirer just three days after the above article from the Oxfam worker: “Tom van der Heyden, a satellite expert who works in the Philippines, said the country needs to be properly educated to properly appreciate what a satellite can do. He noted that its satellite requirement ‘has always been urgent.’ The Philippines, however, needs to have people in the highest positions who understand what can be done with a satellite.
‘Buying a truck will not help if you have no experience driving a truck. The country needs to build up capabilities, and then a satellite, so that the satellite is not just a drain on the economy but can serve the people and business,’ Heyden said.
“He emphasized that the Philippines also needs a satellite for maritime security and to protect its waters and borders. In this vein, Pimentel said the Philippine military should have quick-deploy VSAT systems and a hub with the necessary IP backhaul connectivity. ‘It is pathetic that today, the VSAT network of the [military] is actually on a Chinese satellite!’
“The Philippines has orbited only two satellites: the derelict Agila-1 and Agila-2, which is now operated by Asia Broadcast Satellite, and serves Africa. ‘Forewarned is forearmed’ is a lesson we should have learned long ago from the unending procession of natural disasters that pummel us without fail every year. We must immediately heed this lesson. Nature is not merciful, and never will be.
“We need a Philippine satellite now to save Filipino lives in the future.”
The excerpt above talks about “build(ing) up capabilities” in the high tech sense of having the technology, in this case a satellite, to withstand another typhoon Haiyan. We think in this blog we are writing, our point about capacity building is clear: we are different from these two articles in that we interpret capacity building eventually as a mind-set first, with approaches to the problem (the start-up movement tools) second, and third, but no less important, an eco-system within the local and national boarders (how unfortunate that we still have to talk about national boarders in the 21st century) that makes it possible for channels of commerce, goods, health care to freely flow and be strong no matter what situation, even after a major disruption by an earthquake (Bohol), invasion of gangsters (Zamboanga), or a typhoon (Leyte). After the initial first week: the relief mentality must immediately shift to local capacity building. In fact, it is a golden moment to get a community to be better than it was before the disaster.
With organizations like the United Nations, the magnitude of their operations and the professionalism involved: you know even if pursued with passion, the organizational momentum is towards feeding and temporarily housing people: these tasks will take up most of the organizational energy. This is partly, but also hardly, capacity building. Steve Blank is now talking about metrics and software programs that measure indicators of success of a start-up, and that has got us worried. We think that many victories and successes of a start-up, aside from the bottom line, will never be measurable, because a surviving start-up is a confluence of events and initiatives as it looks for a scalable model. The danger, always, for the start-up is that it will not be able to withstand the shocks the competitors, the market, and other Black Swans are throwing at it. The other danger is that it will start looking and believing that what matters are what are measurable, which is a trap of these giant NGOs and aid agencies-mind set. But the reason we are enamored by start-up thinking tools is because we think Steve Blank and the other articulators of this movement are able to find the equipment (or point-of-view) for people, entrepreneurs, to understand and take the shocks, by being lean and agile, by having the correct mental outlook and desire to fail, fail fast, and pivot.
And here is where getting out of the building is important: the concept in the start-up movement is for the founders or entrepreneurs to get out of the building to meet the customer, to develop customers and knowledge of the customers, to see their problems, to find out what they want and what are the solutions. Aid workers will tell you that in fact they are out, seeing the problems, and solving them. But we would argue, the generals of this army, like Ban Ki-moon, and the rest of the team should stay out of hotels and, in the evening, sleep in their tents (literally) during the duration of their stay. They want to spend money, then instead of spending them on hotels, rent out parcels of vacant land for their UN tents for their staff and generals to stay in. Perhaps they will find out why, in spite of so many tents available, people prefer to go back to their destroyed houses. Many tents are actually unoccupied. Other charitable organizations, when out there, will find out that, locals and local government officials do not know what to do with old clothes being sent their way, and if it will not offend, we have no doubt many of them would gladly pour some fuel and throw a lighted match on the clothes. They don’t need them. Those that do, they want new clothes. Local governments are in fix as to what to do with donated used clothes, without appearing ungrateful.
Indeed, a provincial administrator of the local government very provocatively asked: why have most parachute doctors and hospitals from donor agencies and countries not visited the local public hospitals and given or helped the local hospitals in having the capacity to do their work, as the local doctors there know the culture and the language of the area? The patients are flocking to these places, only to find devastation. The local doctors are just there, waiting. Some of the most sophisticated medical ships, mobile clinics, military hospitals came over from different countries, mostly from countries that have experienced or are currently experiencing military expansion, thus the development of very mobile medical teams and equipment. But they never gave the local provincial hospitals and doctors capacity: hardly anyone asked how they were doing. Sure a tent or two, with some medical tools were left behind by a group, but it was not even a dot in the ocean of need. The local doctors who know the problems, local language, the patients and their medical history: they were just left to clean up and wait for the national and local government to get their act together and go through the tedious task of meeting stringent purchasing rules to get the necessary equipment to get going. This is not a criticism of the local and national governments, but an acknowledgement again that the bureaucracy has its own rules and momentum, its own checklists of requirements, that dictates its actions and ability. It cannot move unless certain boxes have been checked. It needs a start-up culture, or at least it needs to have start-up clusters and teams. Yet local governments have the edge of having the local knowledge of each area’s idiosyncratic culture, specifics of who is in need, and the location of infrastructure to get whatever needs to be brought to the end-user. It will be difficult, if not impossible, to ignore them. Of course just like the experience of the Red Cross in Bohol in getting into a conflict with a town mayor who wanted to have a say in relief distribution, there is fear of being sucked into the local politics of each locality, thus the desire to avoid local officials. Fine: then get out of the hotel and literally stay in your tents as home and office: live literally on the ground. This way, not only is the feed back loop easier, faster, and more realistic: they do not hamper the normal flow of commerce by hogging all the resources of the locality. If bringing and cooking your own food is a problem, or is simply not the solution, leave half the space of the restaurant for other locals, do-gooders, entrepreneurs, scientists, and aid workers to buy their meal. Of course hospitals getting donated medical equipment will not be good for local businesses like Sunfu, so maybe donating countries can purchase equipment from businesses like us, and if they prefer, they only buy equipment that are manufactured or invented by their countrymen that businesses like us sell, as a sort of compromise (as this seems to be an issue for some); or better, support equipment invented and manufactured by us (although honestly medical equipment manufacturing is still a pipe dream in this country, as there is no capacity: although Sunfu Solutions is trying, and may partner with Dr. Harvey Uy in the future for some initiatives in ophthalmologic solutions).
Yesterday Ban Ki-moon appealed for more funds for food, shelter, water, and health. We could only imagine if this almost $1 billion US dollars of fresh funds could be used to fund an honest-to-goodness start-up movement within the UN for Leyte, and on the ground where their foot soldiers are all out trying to make a difference in the lives of Filipinos. There is a big movement in the Philippines called Go Negosyo, which encourages Filipinos to become entrepreneurs in a culture where dreams are for our loved ones to join the biggest corporations, which can withstand the shocks thrown by life at an individual. Work for a great big company and they have health care, insurance, yearly bonuses, and so on to protect the employee. We have always approached the Go Negosyo program with skepticism because, for one, the underlying current of the initiatives is government cannot help you, and for its failures, you are on your own: so look at these millionaires and billionaires (some of them modern day pirates) and see if you can be like them. The end goal, end philosophy, is to be self-sufficient. In the context of the Philippines, the start-up movement is worth pursuing, as it provides the outlook and tools in working towards self-sufficiency, but it needs to be added, in the context of the Third World, with the consciousness of the need for local capacity building, technology transfer, management innovation, and human capital development. The task and challenges are enormous: the start-up movement just provides conceptual tools to get started, to withstand and understand the shocks, the Black Swans, and if successful, to have the necessary mindset to see the world with eyes of a hungry and innovative entrepreneur.
In the context of the Third World, we know many of these apps and technologies out there, being produced by start-ups in places like Silicon Valley, are just toys; made for the First World, or worse, made for venture capitalists. (See article in “Can Silicon Valley Save the World?” by Charles Kenny and Justin Sandefur in Foreign Policy, July/August 2013, about innovation in the devices and gadgets supposed to help the Third World defeat poverty that are impractical if not laughable: example, a solar powered soccer ball that generates power when rolled, but cost maybe 10 times more than more practical and less sexy gadgets. Cute, but no thanks). We need local capacity-building start-ups, not band-aid solutions, we need start-ups that have a culture that will save lives beyond mendicancy, and on the other extreme, start-ups must also look beyond just the bottom line and the great global technology fetish. We do not need start-ups like a new gasoline station company in the Philippines which declared that it is decorating and lighting their gasoline stations like First World gasoline stations. Shell and Petron have done that years ago in the Philippines. Their other stated goal is to franchise out as many gasoline stations as the wildly successful Jollibee Hamburger. That’s innovation?
One of the most precious commodities for days, after typhoon Haiyan hit Leyte, more precious than gold, were to have liters of gasoline to run vehicles. People fell in line for over a full day to get their share, and only the opening up of alternatives like in the photo below alleviated the pressure on the community, which served to dissipate the panic. The black market helped calm down the communities, because money, the traditional medium of exchange and value, is back in circulation. How can gasoline stations service small entrepreneurs in the photo below, without being a danger the environment (using water and soda bottles as gasoline containers!), and skyrocketing prices? The need for goods to be readily available, not be hogged by a select few (no matter how good their intentions), they need to have a mind set to state the hypothesis or goal, to know the customer and have the hypothesis validated, and to literally get out of the building (and for multilateral aid agencies to live outside the hotel buildings) are necessary: we need a start-up culture obviously, yes, and we also need a start-up set of tools, sure; but equally necessary, we should not be too target driven when we enter a business or a relief operation, because we should be looking, with a clear and hard eye, at what the customer wants and needs. We cannot enter a situation with our preconceived notions. One of the great ideas articulated by Steve Blank is that no business plan ever survives first contact with the customer. Think about that. Why is that so true United Nations?
It was a wonderful experience and as usual there was plenty of learning for us in the recently concluded Philippine Hospital Association (PHA) convention in the SMX. Some lessons and observations:
1. There was very good response and interest to the Varian Digital Radiography system. We are very proud to be associated with a company mentioned in many circles as one of the most innovative companies on earth.
Varian’s PaxScan® line of ultra-fast flat-panel digital X-ray image detectors are used to capture X-ray images and instantly display them on computer screens, eliminating the need for film and film processing. Varian’s panels can capture up to 60 images per second, which is fast enough to produce a moving image of a heart beating.
PaxScan Products Imaging panels are available for medical and industrial applications, including: medical diagnostics, veterinary care, dental imaging, industrial inspection, and security.
PaxScan CBCT Software Tools Varian Medical Systems’ commitment to Cone Beam CT applications spans more than 20 years. In addition to CBCT-enabling flat panel detectors and X-ray tubes, Varian is now providing CBCT reconstruction and processing algorithms in the form of an easy to use software toolkit: CBCT Software Tools, or CST for short. CST is designed for use with all Varian X-Ray fluoroscopic flat panel detectors. It comprises a suite of Windows-based software libraries which allow an OEM to quickly develop software that produces high quality CBCT images for medical, dental, or industrial applications.
Technology Varian’s amorphous-silicon flat-panel image detectors for digital radiography work by converting the X rays that strike its surface into light, and then turning the light into electronic data that a computer can display as a high-quality digital image.
2. Clients and partners served well passed-by and stayed in our booths as if they found long-lost family in the mad and maddening market place of salesmen, wizards, doctors, engineers, and shamans. We know that sounds like a marketing tagline, but because medical equipment are so important to the flow and health of the community, hospitals, and businesses, “partnership” is a term hardly used, but is expected by most doctors and health organizations. Sunfu is serious about this, very serious.
3. China is really rising as an equipment manufacturer hub, and it is only a matter of time that innovation will become part of their process, as it has been part of countries that manufacture medical solutions and pharmaceuticals, like the United States and tiny Singapore. But many of the good manufacturers from China are also being punished by the market as hardly any China manufacturing company is loyal to any local distributor here. It is striking that some of the biggest China names are missing in this important convention, because dealers, customers, doctors, technicians know that this lack of loyalty eventually results in inefficiency of distribution, service, local technical capacity, and eventually relationships suffer all the way to the patients. All these local servicing take skills, knowledge, investments, courage, patience, ethics, and loyalty: partnership is a very difficult word for manufacturers, especially China manufacturers, all the more if their goal is to list in the Shanghai Stock Exchange, or worse, the the New York Stock Exchange. Then it becomes short-term planning, short-term relationships, and no local capacity building. The stock market, in the end, is not very helpful to service and innovation, although of course it is quite phenomenal in capital mobilization to be part of the global sweepstakes.
4. There seems to be two types of competitors: those who see you as enemy number 1, and everything associated with you or your company is to be avoided or condemned. And those who know this is intense, but it is also a game. We think either one can be great winners, but the latter has the best chance of improving and also enjoying, as the ultimate competition, and the ultimate cliche, is that in order to improve, one competes with oneself. Sunfu improves year-to-year, because we compete with our track record, which is certainly not perfect, but we are willing to look at ourselves truthfully and assess how we can serve our colleagues and partnerships inside and outside the company to the best of our abilities. We are harder on ourselves when we look at our failures, rather than hard on ourselves when we look at our competitors for their successes. The industry is big (even if we regularly hear of many Philippine medical equipment companies putting up the white flag due to the intensity of the competition and the incredible complexity of the market), the world even bigger: there is room for everyone.
Time for Another Revolution in Medicines Access The ‘Test Case’ of Herceptin
(From the website Newsclick: http://newsclick.in/international/time-another-revolution-medicines-access-%E2%80%98test-case%E2%80%99-herceptin )
The last fifty years is witness to a virtual explosion in the creation of new knowledge. Capitalism has used this characteristic of modern science and technology to constantly create products and tools to constantly revolutionize the productive forces.
This dual nature of capitalism in the arena of knowledge creation – knowledge creation and its control are both embedded in the nature of capitalism. Without new knowledge and the creation of new products, capitalism is unable to survive. At the same time, it cannot allow the free use of such knowledge, as this jeopardizes the very basis of capitalist accumulation based on hegemony over the process of production. This inherent contradiction is starting to express itself in a new dilemma – control over knowledge production is now a fetter on creation of new knowledge.
TRIPS – a cruel agreement
This dilemma s being played out in the field of innovations that leads to discovery of new medical products. It is being played out in two very important ways. The 1980s and 1990s were a period of intense struggle, waged by developed capitalist countries, to put in place a global system that would legalise its hegemonistic control over knowledge. The result was the signing of the TRIPS (Trade Related Intellectual Property Rights) agreement in 2004. The TRIPS agreement legitimized the control over knowledge through a strengthened patent regime that was to be applicable to all countries in the world (with some limited waivers in the form of transition periods for developing and least developed countries).
The TRIPS agreement is a cruel agreement – what it basically says is that access to knowledge that can save lives would be limited to those who can pay (as individuals or through their governments). The decade of the 1990s saw the unfolding of one of the worst man-made tragedies ever, in the form of the HIV AIDS epidemic. Nominally, the disease is caused by a virus, but the conditions for the devastation it caused (and is still causing) was a human creation. In less than a decade after HIV infection was first detected in humans, the first drugs to effectively treat it were being rolled out. Yet it raged across the poorest countries of the world, especially in sub-Saharan Africa, decimating huge swathes of the population. Almost a whole generation succumbed to the disease in the region. Not because remedies were not available. Not because we did not understand how the spread of the disease could be stopped. But because these remedies were not allowed to reach those who needed them the most. They were not allowed to be used because a handful of CEOs of giant pharmaceutical companies priced these drugs way out of the reach of people who needed these drugs in poor countries. Sub-Saharan Africa was already reeling under massive debt burdens foisted on them by policies promoted by the IMF and World Bank. They were now asked to shell out money to buy drugs that would save their people – money that amounted to, in some cases, over 50% of the entire GDP of the country.
In 2001, and Indian company – Cipla – entered the fray. It announced that it would supply drugs to treat HIV AIDS at 1/40th (that is just 2.5%) of the price charged by multinational corporations. Drug prices of anti-retrovirals (those that treated HIV AIDS) fell from the earlier $12,000 per patient/per year to $300. Since then the prices of these early anti-retrovirals have fallen to less than $100 for a year’s treatment.
Biologics – the new frontier of disease control
The above story, known to many, merits repeating because it is now being played out in another area of medicinal products. The next new-frontier of disease control lies in finding remedies that can effectively cure and control cancers and several degenerative diseases. Cancers of different kinds are a cause for over 8 million deaths every year (i.e. almost 15% of all deaths) and 70% of these deaths occur in low and middle income countries. Even 3 decades back most cancers were considered a death sentence. No more so. Over the past decades new treatments and products are starting to win significant victories over a number of types of cancers. New products are being developed and many are already in use – many of which are a significant advance over existing treatments. As such opportunities open up, they are also opening up opportunities for pharmaceutical companies to reap super-profits at the expense of human misery. While the basic research for virtually all cancer treatments are done in public funded institutions, the ultimate products are controlled by a handful of companies.
Simultaneously we are seeing another development taking shape. Fewer and fewer new drugs that are significant advances over current treatments are being researched. Partly this is a consequence also of what we have noted earlier – the patents system, by controlling access to knowledge, finally also acts as a fetter to the creation of new knowledge. Most patents registered today do not protect an invention, they actually are designed to prevent others from doing research. Known as ‘patent thickets’ these patents prevent transmission of knowledge, and its further development. In India less than a handful of new medicines are introduced every year, yet several thousand patents are granted. This is a global phenomenon not restricted just to India. While the number of patents is growing, the number of new drugs that are being researched continue to fall alarmingly.
There is, however, and exception to this trend. The field of biotechnology is starting to live up to its earlier promise and is delivering entirely new forms of treatment. Thus while we have fewer drugs of promise that are being developed through the earlier route of chemical synthesis, exciting new treatment avenues are being opened up by research using the biotechnology route for drug development.
Drugs developed using biotechnology are different because they are produced in living cells. The molecules which make up these drugs are larger in size and more complex than the ‘small molecule’ drugs manufactured using the chemical synthesis method. The manufacturing systems used to produce these drugs need to be monitored differently. These drugs – termed as biologics – have several potential advantages. They can, theoretically, be tailored to hit specific ‘targets’ in the human body. This is of particular interest in diseases which are caused by altered or aberrant functioning of specific genes – such as in the case of several types of cancers. Traditional cancer drugs are called ‘cytotoxic’ drugs, i.e. they are poisonous to cells in the body. The basic principle on which they work is that they selectively kill cells that proliferate very fast (as happens in the case of cancer cells). However they are never entirely selective and that is why cytotoxic drugs have a range of side effects caused by the destruction or alteration of normal cells in the body as well. Biologics are being developed that only target specific gene sequences in cells and thus would have less side effects.
The Herceptin Story
One such drug that is a breakthrough drug is called trastuzumab. The drug is used to treat a certain kind of breast cancer that is particularly aggressive and difficult to treat or manage.
Trastuzumab works in a way that is very similar to the way antibodies work in the body. Antibodies are produced by the body’s immune system, which is the body’s defense system against foreign invaders – like viruses, bacteria, and other biological agents. They are able to recognise these foreign agents and bind to them. The body’s immune system then gets into action to destroy these foreign cells. Trastuzumab binds to a gene called the HER2 gene, that is more active in some breast cancer patients. The HER2 gene stimulates the growth of cancer cells. By binding to the HER2 gene, Trastuzumab suppresses its activity. It also stimulates the body’s own immune cells to destroy the tumour cells.
Trastuzumab belongs to a class of biologics that are called monoclonal antibodies. Monoclonal antibodies are produced from a single cell-line (hence the term ‘mono’), which is cloned to produce a very large number of cells. The cells are genetically engineered (i.e. a piece of foreign gene is introduced into the cell) to secrete the antibody we desire. Trastuzumab, for example, is made by substituting a portion of a human gene into a mouse using recombinant DNA technology. The mouse cells are thus ‘fooled’ into producing the antibody.
To continue the Trastuzumab story – the drug was marketed in 1998 by Genetech (later acquired by the Swiss multinational, Roche). It is sold under the brand name Herceptin. It is interesting to note that though the product has now been around for almost 15 years, Roche still enjoys global monopoly over the drug. The story would have been very different if Herceptin had been a drug that could be produced by the chemical synthesis route. Given the drug’s important public health benefit, many generic manufacturers (especially in India, the major centre of generic drug manufacture in the developing world) would be interested in producing their own versions of Trastuzumab. Herceptin was introduced in the global market at a time when the Indian Patent law allowed generic versions of patented drugs to be produced without any restrictions. The inability of Indian companies to come up with a generic version is related to special features that characterize biologics like Trastuzumab.
Unlike in the case of conventional ‘small molecule drugs’ it is never possible to produce an exact replica of the original drug. Biologics are extremely sensitive to the manufacturing process and the starting material. As the starting material is a living cell, it is impossible to have an exactly similar starting cell. Moreover very small changes in the manufacturing process can bring about changes in the final product. Thus, even in the case of the original product, there are variations in the product – between batches and even within the same batch. Thus the equivalents of generic versions of generics are called ‘biosimilars’.
Biosimilar manufacture is a relatively new area as the processes involved are entirely different from those used to produce drugs through the chemical synthesis route. Further, there are regulatory hurdles because the process of getting regulatory approval for biosimilars is more cumbersome than for ‘small molecule’ drugs. This is again because of the nature of biologics – because it is impossible to replicate the original drug, more data is demanded by regulatory agencies to prove that the quality, safety and efficacy profile of the biosimilar is identical to that of the reference drug (i.e. the original biologic). Consequently, in the case of biologics, patent barriers are not the only barrier to the production of biologics.
The time to act is ‘now’
Herceptin has recently been in the news because of two reasons. First, because of the interest being generated about use of Compulsory licenses (i.e. licenses issued to generic companies to manufacture patented drugs) after India issued its first compulsory license last year for another anti-cancer drug – sorafenib. The second reason is that it is only now that Indian companies have started acquiring the capacity and technical competence to produce biosimilars.
Because it now appears possible that biosimilars of Herceptin can be introduced, it is important to examine the economics and the public health importance of the drug. Treatment with Herceptin typically consists of 12 intravenous doses of the drug, administered every three to four weeks over the course of a year. Roche sells the drug for more than Rs.70,000 per dose. Clearly the cost is prohibitive for almost any Indian patient. The cost has to be seen in the context that breast cancer is the most prevalent form of cancer among urban women, and the second most prevalent for rural women According to the national cancer registry, over 1,00,000 women in India develop breast cancer every year (about 1 in 22 women in India stand at risk of getting breast cancer in their lifetime). Out of the total number of breast cancer patients, about 25% benefit from Herceptin (there are tests that can show which patients will benefit). Thus approximately 25-30,000 women would benefit from the use of Herceptin. Importantly, Herceptin is useful in the most aggressive form of the cancer, which typically afflicts younger patients. Yet because of the misuse of the monopoly situation that Roche enjoys, barely 5% of eligible patients are able to access the drug, and many of those who do are put on a lower dosage than recommended.
The situation cries for an immediate remedy. There are several issues that need to be addressed in order to expedite the entry of biosimilars of Herceptin in the Indian market. First, patent barriers need to be removed by expeditious issue of a compulsory license. The patent status of Herceptin is not clear in India as it is the subject of several litigations, however a compulsory license is the fastest way to make sure that patents are not a barrier to introduction of biosimilars. Simultaneously regulatory procedures need to be streamlined to ensure that entry of biosimilars are fast-tracked, while of course ensuring that quality is not compromised. Finally, public investment is necessary to build larger capacity in India to produce biosimilars.
Herceptin is a test case. If the attempt to get Inidan biosimilars of Herceptin in the market is successful, it has the potential to open the doors for a range of other biosimilars of other new biologic drugs that are already in the market or are being developed. Cipla’s pioneering action in 2001 revolutionized HIV AIDS treatment. Biosimilars produced by Indian companies can change the face of treatments for many diseases, now considered virtually untreatable, not just in India but across the world. There is no reason why the experience of a 97.5% drop in prices, seen in the case of HIV AIDS drugs when generics were introduced, cannot be replicated in the case of biosimilars. A bold and responsive government and regulatory agencies need to act in tandem to make this a reality. The time to act is now.
There are many reasons to write this blog, as many as the reasons why we should not write this blog: we are just too busy, too tired, too focused on our work. But we would like to think that writing our opinions, observations, suggestions, and commitments is part of our work. Recently, we had lunch in the Gawad Kalinga run restaurant: Enchanted Farm Cafe, and it prompted us to discuss among ourselves our disappointment with the place. Don’t make that statement discourage you from going to the place on Commonwealth Avenue, as it is a good cause, and restaurants each day have their quality of food and service go up and down for various reasons (an incredibly difficult business to be consistently great in), and who knows, it may be to your liking. No doubt it is worth supporting, and this first entry on our company blog is really a support to the endeavor, even if this support is in the form of criticism.
The disappointment really comes from the realization that it is run just like most social enterprises: it caters to the goodwill of its small group of true believers (the clients when we were there, except for the Sunfu group, were from the Kawad Kalinga leadership, and Ateneo students who were there as part of their social action meeting/work), it does not push itself to keep raising its quality and desire to please, and worse, it clearly hopes that its good heart will see it through. Contrast this to a small catering company and restaurant called Patria, run by Loret Mendoza and his son, which goes out of its way to serve the needs of seamen having their medical exam on Maria Orosa street. The other day I visited them, and they were around a small round table, discussing the menu they planned to serve in the next two months to the employees of a company they have a contract with to feed, serve, and delight. The seriousness at which they were taking their duties and responsibility, for small change, was admirable. Ms. Mendoza said it takes many extra cups of rice for her to earn a few pesos, but she was certainly trying her best. Their food prices are nowhere as high as that of Enchanted Farm, but the food is much better (a little too sweet though for the dinuguan), in fact I had tried their restaurant and their catered food on different occasions, and I must say, they were great. I am worried about criticizing the adobo we ate in Enchanted Farm, which was too salty and took a long time to cook and serve, but the price was just very high for what they were serving. If you charge high, you better be ready to meet the expectations in quality, service, and atmosphere the price will inevitably pump up.
We are not great fans of capitalism here in Sunfu Solutions, thinking the system doomed with incessant ruthless competition, magnifying the worst instincts of mankind, and we would like to describe our medical equipment business as a social enterprise disguised as a business, but no doubt whatever is positive about the capitalist system (innovation, efficiency, drive) must be harnessed. We just did not see that in Enchanted Farm, and we contrast that with Patria restaurant, which has communication problems, as it is not able to communicate to the street where it is located, that it is open to the public. Yet in spite of the complacency, as it has home court advantage of having a contract with the owners of the building to serve its constituency (its employees and seafarer clients), the restaurant management is clearly pushing itself to give healthy and affordable food, great presentation, and efficient service. On the other hand, Enchanted Farm Cafe is in social media, newspapers, and has a band of advocates pushing for it via word of mouth. But can it go beyond the token one-time trial from non-Gawad Kalinga members? To go out of one’s way, in our case from San Juan all the way to Commonwealth? I doubt it, as of today at least, November 1, 2013.
We will not be ambitious in declaring this blog as something that will be updated weekly or even monthly. Most blogs, after the excitement of the first year, die a natural death. But these two restaurants that interest us is also what interest us about health care and medical equipment: we are interested in service, innovation, pushing ourselves to the limit to make a difference, yet making sure our various constituencies will be served well: patients, entrepreneurs, hospital/clinic managers, government health workers, politicians, inventors, manufacturers, medical policy wonks, all of who serve (or harm) the future by touching health policy issues in their daily lives. They may not know it, but the dynamics of the health environment, anywhere, takes so many factors and players to be where it is, good or bad. Washing one’s hands before every meal, a simple procedure, says a lot about the health education of a community. We take our responsibilities seriously, and writing about them and what we think about the world shows our willingness to take time out to reflect, share, and raise the stakes in the bets we are placing.