The Challenge of Understanding Biotech: Sifting Through the Fog and Jargon
I recently enjoyed reading two books on the mortgage meltdown, “The Big Short” by Michael Lewis and Gregory Zuckerman’s “The Greatest Trade Ever.” They each provided a detailed post-mortem on the implosion of the housing bubble. What fascinated me most about their accounts was how virtually everyone on Wall Street, with a few notable exceptions, was completely wrong about the stability and direction of the housing market. This, of course, fits the classic definition of Groupthink, a term coined by social psychologist Irving Janis to describe faulty decision making that results from a deterioration in “mental efficiency, reality testing, and moral judgment”. The lesson I took away from this is crystal clear: you must think on your own, forming your own opinions from the data in front of you. Remember that the “experts” are not always right, and indeed, are often very wrong.
Is Groupthink a problem for the Pharma/Biotech industry? A recent summary of “Pharma’s Biggest Flops” readily illustrates that both companies and the analysts who cover them can, from time to time, be dead wrong in their pronouncements and expectations. However, I only see weak evidence of Groupthink in BioPharma, nothing anywhere near the scale of what was seen in the mortgage meltdown debacle. Pharma and biotech are a much more fragmented and diversified industry than the mortgage business, and as a result it is much more resistant to having everyone think the same way. It is also harder to place specific financial wagers either for or against the industry in general, especially since many biotechs are not publicly traded.
So how does one avoid getting sucked in by industry Groupthink? Critical reading and thinking are the best defense against this problem, but this requires a serious brainpower commitment. I spend a lot of time reading and, more importantly, thinking about where the industry has been and where it is going. Science journals, newswire reports, and industry missives fill my computer screen on any given day. I know that many of you share my pain: so much information to process, so little time.
We all deal with information overload. More and more, however, I find myself spending inordinate amounts of time trying to understand a single number or the ramifications of a particular finding that are either poorly explained or don’t make sense. A lack of clarity can simply indicate poor writing, but it often reveals sloppy thinking. Herman Melville said it very well: “A man of true science uses but few hard words, and those only when none other will answer his purposes; whereas the smatterer in science thinks that by mouthing hard words he proves that he understands hard things.”
Consider the simple phrase “….. is the best selling drug.” What does this mean? … Next Page »