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A Former Pfizer Executive Finally Trashes Pfizer’s Strategy

A number of readers have noted this piece by John LaMattina in Nature Reviews Drug Discovery. He is, of course, a former head of R&D at Pfizer, which makes the title of the article something of an attention-getter: “The impact of mergers on Pharmaceutical R&D”. Pfizer, for those of you just returning from a near-lightspeed trip to Alpha Centauri and still adjusting to the effects of relativistic time dilation, has been the Undisputed King of Pharma Mergers over the last ten to fifteen years, growing ever larger and larger in a way that no drug company ever had before. So how has this worked out?

“. . .In this article, it is argued that although mergers and acquisitions in the pharmaceutical industry might have had a reasonable short-term business rationale, their impact on the R&D of the organizations involved has been devastating.

Lest anyone think that he’s trying to make excuses for his former employer, LaMattina explicitly advances Pfizer as an example of what he’s talking about, going over the company’s merger and acquisition history in detail, including research site closure and layoffs. How, he asks, are we supposed to discover new drugs in the face of such cutbacks? And what has been the effect on the scientific health of the industry to have so many fewer organizations there to work on new ideas as they come along?
Good questions. The reaction to LaMattina himself asking them, though, has been varied. My first thought is that I agree with his point of view right down to the ground, and have been publicly inveighing against Pfizer-style mergers for over ten years now for the exact same reasons that he details. (Early next year, in fact, will mark the ten-year anniversary of this blog, which hardly seems possible). All such protests have done nothing, nothing at all, as far as I can tell. Pfizer, up through its acquisition of Wyeth, has getting bigger, buying more companies because it needs their pipelines because now it’s so big, slashing and burning these organzations after buying them, and then turning around and buying someone else because now its pipeline needs shoring up, because for some obscure reason people haven’t been discovering as many drugs as they used to. Yep, that’s about the sorry size of it.
Another reaction, though, has been “How dare someone from Pfizer say that mergers aren’t a good idea? Now he tells us!” And while I can understand that, I think that you have to realize that in a company the size of Pfizer, the head of R&D is not perhaps in as exalted a decision-making position as you might imagine. LaMattina alludes to this here:

“Indeed, R&D seems to be especially vulnerable to the negative impact of mergers and acquisitions. Having a sense of how mergers occur in R&D organizations is helpful for understanding this impact. R&D organizations will be the last part of the companies to begin merger discussions before regulatory approval because of the commercial sensitivity of the pipeline and the intellectual property of the company. . .

I would say that in many of these cases, the job of the R&D executives has been to roll over and take it once the higher-ups have decided an acquisition is going to happen. “Your job is to make this work – and if you don’t want to do it, we’ll find someone that does”. After reading that alarming Fortune piece on the goings-on in the upper ranks of Pfizer, I find this view particularly believable. (And I would find LaMattina’s view on the events in that article extremely interesting, although I doubt we’ll ever hear them).
So, although I don’t want to put words in anyone’s mouth, my take is that LaMattina finds his part in Pfizer’s M&A activities to be regrettable, and that he’s now advancing the arguments against them – arguments that never gained any traction inside Pfizer. His own book skirted the topic – the word “mergers” only appears twice in the text, as far as Google Books can tell. But he’s not skirting it any more.

55 comments on “A Former Pfizer Executive Finally Trashes Pfizer’s Strategy”

  1. RandomChemist says:

    While it’s fine and dandy that La Mattina has changed his tune, what exactly is he doing to help the Pfizer underclass? Is he an active advocate for hapless pharma workers, or does he just want us to buy his book and supplement his hefty income from pension, social security, and other investments? If he REALLY had misgivings about Pfarmageddon Part 1, why didn’t he speak up when he actually had sway with the company?

  2. NoDrugsNoJobs says:

    Better late than never I think. The more press we can get that highlights the consequences of the Pfizer merger model of research destruction the better it is for us and our industry so let’s welcome any help we can get.

  3. Student says:

    Did these mergers cost him his job, or are they reducing the demand for people of his experience/role in large companies? Would this be why he is speaking up? (I’m asking, not insinuating. I honestly don’t know his background)

  4. PharmaHeretic says:

    I know those concentration camps were evil because I ran them.

  5. Beentheredonethat says:

    All too little too late. The lunatics (MBA’S) took over the asylums 15-20 years or so ago and the scientists have suffered ever since. Best thing to do (as I have done) is to get out and work in small pharma. Enjoy your job, make a difference and enjoy better control over job security too.

  6. Dr. Manhattan says:

    “LaMattina finds his part in Pfizer’s M&A activities to be regrettable, and that he’s now advancing the arguments against them”
    Too little, far too late. It’s somewhat a variation on “The Nuremburg Defense”, although I’ll admit that’s a bit harsh as a comparison.
    Many (Derek & others) have decried the destruction of the intellectual capital of the Pharmaceutical industry by excess mergers. Now we get an Apologist. Interestingly his predecessor, John Niblack argued in the late 1980’s (when Pfizer was nowhere near number 1 in size)to build a strong internal research effort which ultimately paid dividends before merger mania began for Pfizer. Maybe LaMattina did argue against the megers, but at the time they happened, they were uniformly portrayed internally & externally as just wonderful & adding to the Pfizer portfolio. Also, they were really acquisitions, and not mergers, as the emerging company always went by the name “Pfizer”.
    At one point, the senior management in Pfizer declared that they were “going to take Pfizer beyond #1!”. They did-into the realm of negative numbers.

  7. You're Pfizered says:

    It’s always nice to have this type of 20/20 hindsight revelation/mea culpa when you’re able to drive your $80,000 BMW back to your mansion and call it a day.
    The only good that might come from this would be executives from other companies who, like lambs, follow Pfizer’s lead on everything from Ro5 to M&A might think twice about their next step, instead of just saying “What would Pfizer do?”
    Who am I kidding?

  8. Stephen Frye says:

    Take a look at: Cuatrecasas, P. Drug discovery in jeopardy. J Clin Invest 116, 2837-42 (2006)
    Having lived through Glaxo-Wellcome-SK mergers, I can look back and say that Pedro (author of the above) was one of the best R&D directors I worked under and unfortunately, he was pretty unique in understanding the culture needed for scientists to succeed. Mergers are always about the short-term but they absolutely destroy the long-term prospects for any company’s research organization. While percieved as a consequence of low productivity, they have much to answer for as a cause. I lost my enthusiasm for re-designing the org chart at GSK and have truly enjoyed the freedom since moving to academics. There’s no free lunch here either, but I can develop long-term strategies and see projects through (as long as I can convince the peer review process they are worthwhile – at least this is more merit based than most decisions in pharma that I saw) and NO ONE has come to me wondering whether we should reorganize every 6 months instead of doing science.

  9. RandDChemist says:

    Money is not the answer, but there does need to be investment.
    The only thing worse than innovation is not innovating. It’s tough, it’s hard. It takes courage, vision and resources.

  10. johnnyboy says:

    Yes, as an ex-PFE employee in the mid-aughts, I very well remember that ‘Beyond no. 1′ slogan’ – I also remember the mirth that it caused in my coworkers (the non-manager ones). I also remember the one about the need for every employee to be a leader – that one especially made a lot of sense.
    This said, i’m glad to see LaMattina speaking up, and I think the commenters here are overestimating the level of power that a head of R&D would have over merger decisions. But at the same time, everything that LaMattina says now about the degree of disruption caused by these mergers could have been said 5-10 years ago by any non-manager employee of the company – all he would have had to do was ask.

  11. lynn says:

    I’m with Derek on this – a head of R&D has little say. You go along with the program – or get out. Maybe LaMattina should have spoken up earlier, yes – but it wouldn’t have altered the course of the Pfizer dreadnought. Perhaps his story will form the basis of a B-school case study; maybe MBAs can learn from this and change their course. Someone has to educate the biznauts in drug discovery, human nature…what all this M&A crap does to productivity.

  12. lynn says:

    I’m with Derek on this – a head of R&D has little say. You go along with the program – or get out. Maybe LaMattina should have spoken up earlier, yes – but it wouldn’t have altered the course of the Pfizer dreadnought. Perhaps his story will form the basis of a B-school case study; maybe MBAs can learn from this and change their course. Someone has to educate the biznauts in drug discovery, human nature…what all this M&A crap does to productivity.

  13. lynn says:

    I’m with Derek on this – a head of R&D has little say. You go along with the program – or get out. Maybe LaMattina should have spoken up earlier, yes – but it wouldn’t have altered the course of the Pfizer dreadnought. Perhaps his story will form the basis of a B-school case study; maybe MBAs can learn from this and change their course. Someone has to educate the biznauts in drug discovery, human nature…what all this M&A crap does to productivity.

  14. smurf says:

    LaMattina was responsible for the “let’s get the CAN” culture, and the CAN number game dominated and ultimately ruined the whole of Pfizer Research.
    He should be more self critical – yes, the mergers did not help, but the problem was (is) a metrics, bonus and signpost obsessed mindset that destroyed rational, science based decision making.

  15. Anonymous says:

    LaMattina was responsible for the lets-get-the- CAN culture, and the CAN number game dominated and ultimately ruined the whole of Pfizer Research. He should be more self critical – yes, the mergers did not help, but the problem was (is) a metrics, bonus and signpost obsessed mindset that destroyed rational, science based scientific decision making.

  16. Annette says:

    Derek, I would be interested to hear your thoughts on Bernard Munos’s suggestion that the best way to save the drug industry is by cutting R&D.

  17. partial agonist says:

    Munos worked in SALES for 30 years. what qualifies him to comment on R&D strategies? he was deciding what docs to pat on the back where and when, what color post-it notepads to make with a drugs name on it, etc.
    I’ll at least appreciate LaMattinna’s opinions as relevant, since he was in the trenches.

  18. Anonymous says:

    #17 agonist – I agree with you. I was wondering about the depth and insights one could get on R&D while in sales, but also spending much of that time in nations away from the R&D centers. Munos reminds me of other Sales leaders that said exactly the same thing (cut out R&D, emphasize other ‘valuable’ areas) over 20 years ago.
    As others note above (esp. #10 johhnyboy) the “observations” of Munos and Lamattina have been actively discussed (maybe not in public) inside R&D groups for at least ten years.

  19. drug_hunter says:

    Maybe I’m too critical but I don’t buy the “gee I’m just the head of worldwide R&D, I don’t have any influence with the CEO” argument. And I don’t buy the “if I don’t pull the trigger they’ll just find someone else who will” argument. Neither of these defenses pass the sniff test with me.
    It would be a lot more credible to me if any of these senior guys who have destroyed pretty much every big Pharma were to say “with the advantage of hindsight, I screwed this up royally and I was completely wrong about my metrics, my mergers, and everything else.” I’m not holding my breath.

  20. Anonymous says:

    #19 Hunter – Sorry. I have seen heads of R&D get squeezed by the board and whoever is pushing the merger/acq. Someone above noted that the ball is alread rolling before you get a look at each others’ R&D assets – especially early stages. So the “someone else” threat is valid, and the time to support the move is short-term and pressing. Result – often buying a pig in a poke.
    Plus, the amount at stake for the leadership is huge – unfortunately they get way way too many options that in many industries are “long term”. Problem is, for pharma R&D, that timeline is about 1/3rd of what it should be. So going along with the board ensures getting millions in ~ 5 years. About 5-10 before the consequences hit the fan.
    Finally, those leaders will never say “I did really stupid things” as they are continusing to sell their “expertise” as paid advisors, or are still positioning to be a viable leader in another firm. Can’t tarnish the resume, you know.

  21. Cellbio says:

    Re a head of R&D having little say, I worked for a very successful company that transitioned from a place where the head of R&D would have a lot of say, essentially equivalent to the CEO, to one where the head of R&D would have much less say. This transition occurred after R&D produced under leadership that promoted a science culture that drove innovation and product development. Once flush with cash, financial leadership took over and raged through the organization with efficiency measures, with the new CEO declaring that our Research was third rate despite our success. Recently, after nothing new from this new team in almost a decade, Research was publicly referred to as an underperforming cost center. In such an environment, research strategy is certainly not a driving element of corporate strategy, nor is it promoted as an important foundation of the company. So perhaps the head of R&D has little to say in acquisitions in a company of Pfizer’s size during LaMattina’s time, but perhaps that is the first sign of the impending train wreck for a science-based innovation culture.

  22. CB says:

    Derek, your lamentations of the destruction of the US research establishment by the ‘Pfizer’s of the world sounds positively socialist! Destroying established research companies for profit is the purist form of Capitalism.
    These mergers are brilliant strategic moves when viewed from the economic perspective of the Corporate executive suite. A big merger is invariably accompanied by rounds of bonuses and pay increases!
    Pfizer shareholders are dominated by large funds that dont vote their shares, so the larger the better.. …no shareholder oversight!
    If they teach Pfizer as a case study in B-school I would bet that the graduates would wish to emulate Pfizer’s management to achieve their ultimate objective, More Money!!
    Is the US is materially diminished by the disappearance of major corporate research centers, loss of high tech research jobs.
    No. Now these poor researchers can be reallocated and retrained for highly productive professions such as finance, law, investment analysis, and Casino dealers.

  23. Cellbio says:

    To further my point drawing upon #20’s comments. If you were a research leader who showed independence of thought and critical judgement that simply asked to examine the merits of following the course of an uncertain strategy you were excluded from a leadership position. In other words, the process selected people who placed their stature, salaries and options over wise decision making in the first place and demanded people who’s decision making was more socially oriented than intellectually principaled (an MBA mindset vs scientific, to over-generalize). So, don’t expect them to see the light now.

  24. Anonymous says:

    Not the first former head of R & D to come out and say this or similar things.
    Pedro Cuatrecasas (former head of R&D at Wellcome, Glaxo and Warner-Lambert) said some very similar things in a piece 5 years ago

  25. Anthony says:

    The sheeple seem to have no clue as to what Pfizer’s actual business model was.
    Hint -they didn’t have a business model.
    There certainly was an ‘executive enrichment model’ whereby the company grew on acquisition and the MBA lowlifes got bonuses, then when company growth lagged, they fired the scientists to increase cash flow( prompting more bonuses).
    The above model is being emulated all across America in all walks life.
    What’s left behind is a hollow shell and the scorch marks from the evil MBAs rocket as they head off to a happy new life.

  26. Annoyed says:

    Pedro Cuatrecasas came in with Ronald Cresswell Pres. at Parke-Davis (div of Warner-Lambert) to promote a better scientific culture there. Decisions based on sound science. This was just prior to the WL take over by Pfizer and of course this manangement team was lost as a result. I am sure that the former Upjohn management was shaken up as well, as where Wyeths. It would be interesting to hear more from those at the R&D management level. Fred Hassan was a turn around CEO, has a reputation of turning a company around and making them attractive. Every company it seems he had lead has been absorbed into another.
    Like I said earlier maybe what was hapening will all come out in memoirs and if lucky a case study will result.

  27. Anonymous says:

    Reminds me of McNamara disavowing his major supporting role in the Vietnam War – 30 years, and 56,000 dead US soldiers too late!

  28. pete says:

    re: Strategic “say” by R&D leader in large Pharmas
    My impressions have been that the Corporate Counsel, head of Marketing, head of Regulatory often carry as much, or more, weight than the head of R&D in today’s large Pharmas. And don’t forget all those Directors with their Big Biz / Big Law backgrounds. Gotta hear from them too.
    So is it really any freakin’ surprise that R&D continues to get treated like overhead ?
    At some level any hand-wringing about the state of Pharma R&D by former Pharma Officers is cause for cueing-up sardonic chortles from scientists. Save your tomes for the MBAs.

  29. MoMo says:

    Everyone of these Pfizer stories shows their denial and finger-pointing to the extremes.
    But that’s what Planet MBA teaches- Do not expose any weakness and blame-shift.
    They all should be banned from the industry.

  30. dichotomous says:

    Yes, because categorically banning all MBAs from an industry makes sense, and all of the reduced productivity from the last decade or so is caused by financial types and has nothing to do with the paucity of low-hanging fruit, enthusiastic spend on technologies that produced no drugs, lack of rigor in decision-making, and frankly, in some companies a lack of significant effort and focus.

  31. SteveM says:

    I dunno. Maybe you have to separate the wheat from the chaff to figure out the true story.
    Did the MBA’s actually cut R&D groups that had clinically compelling design strategies in place?
    I mean given that the Big Pharma pipeline has been sparse even before the big cutbacks, what does that say about the overall quality of the R&D portfolios?
    Were too many people chasing too few really good ideas?
    For example, Big Pharma is cutting back on CNS generally. Why? Just to save money? Or because the clinical opportunity space is just not very attractive given the known science and business climate?
    Are other companies recognizing the surrendered CNS opportunity space and jumping in? Is new capital flowing to the opportunities? If not, then whacking that investigative area might make sense.
    I love R&D. But it seems to me there may be scientific and business complexities that suggest culpability on both sides.

  32. CMCguy says:

    As has been mentioned the negative impact of M&A on R&D has been known for a long time and not sure why this obvious connection seemingly is overlooked when talking about decline in Pharma productivity.
    One would hope part of the head of R&D responsibility is to speak out about impacts of corporate level decisions on their part of the organization while they are in such a position. Even if input comes too late in merger process or ends up like spitting in to wind (blown from MBAs orifices) isn’t that what leadership in about. Unfortunately most the R&D people I have seen rise in organizations are the best brown-nosers and/or forget about science quickly when taken out of lab.
    At the same time realize it goes against human nature and wonder how many people in R&D have been willing to speak up against and just go along (than still complain to like-minded) when see something that is wrong or just poor-fit (get a Six sigma black-belt anyone?) especially if involves a project they are directly vesting in. Most people are not willing to put their neck on the line so why would you expect head of R&D to act that way since they may have more proportionally to lose.

  33. @#17,
    I think Munos has some good points in his strategy, although there are some pretty big holes as well.
    What I fear are those who come forward with “Do X, Y, Z and your R&D problems will be solved”. Each company has specific R&D issues and the “one size fits all” solution is what got us here in the first place.

  34. Anonymous says:

    High risk, high cost of R&D, and a long product development cycle makes Pharma the hardest sector to manage. Put it to you this way. Imagine how hard it would be to drive a car if every input was delayed 5 mins.
    Does anyone ask what they would do if they were promoted to a senior position? Would you speak up and essentially fire yourself with that kind of pay?
    Wouldn’t you be anxious to implement the newest fad you learnt on your part-time mba? It’s a lot of pressure to hold the ship steady when things are bad. It’s a lot easier to grab the 6-sigma book and start making noise.
    It’s pretty easy to convince yourself that you have the silver bullet. But I’m always amazed that these people always rush to implement it company wide, instead of small scale experiments and analysis.
    Maybe the brown noses get promoted so not to threaten or contradict the orders from up high.
    As scientists we are trained to spot trends. It seems that this problem is systemic. Is it a coincidence that this happens almost everywhere? IMHO different people act similarly in the same situations.
    Here’s what happened:
    While revenues were pouring in from blockbusters, people that generated the most money *short term* got put in charge. Weak scientific management slowly crept in and started to cripple R&D. A couple of big failures followed by frantic quick fixes exacerbates the problem and thus begins the spiral. Does anyone agree?
    IMHO engineers make great CEO’s in technical sectors. They work in the trenches and never forget it. You ever drive a ford tarus in 2005 vs. today.
    I end my rant by stating this. Have you ever heard of a company that researched/engineered their way to failure??

  35. WB says:

    I think the best cure for Pharma’s woes would be to greatly reduce the influence of the marketing, finance and legal weasels. Yes, we still need these people to sell the product and open the markets. But we DON’T need them killing off R&D because they want the company to be profitable in the short run. Sadly most scientists are poor at playing the political game, which is why it is often the useless dregs which rise to the top of the corporate ladder.

  36. fGSKandPfizer says:

    Hard to disagree with most of what LaMattina has to say and unlike many others, he’s at least prepared to hold up his hands and admit that mega M&A deals were detrimental. #35, I agree also with most of what you state but, having worked under the so-called “great scientist” that is Patrick Vallance @GSK, I’m not sure that putting these sorts of guys in charge of R&D is a good idea either. Arrogance & Ignorance is a dangerous combination. My experience at both GSK and Pfizer was that bullshitters and sycophants tended to get ahead, the good scientists were either to self-effacing to speak up or too outspoken and thereby suffered the consequences. The sad part is, I don’t see things changing so perhaps both these companies will just transform themselves into marketing outfits with all the R&D done externally. It’s possible that this might be for the best as bullshitters are needed in sales but are disastrous in R&D.

  37. Beyoncero says:

    Pfizer is great at establishing an army of king drones to screw the queen (CEO). These gofers dream up catchy phrases and use flowery language to deceit the soldier and foraging ants. They are good at “creating mile posts and symbols to rally support behind the corporate vision”.

  38. drug_hunter says:

    To those of you who are essentially saying that we could expect no better behavior from pharma R&D heads because it was in their self-interest to be sycophantic corporate men: I understand human nature all too well, being human and all that. But they had a choice. And they didn’t choose the honorable path. Not everyone makes such poor choices, do they?

  39. MTK says:

    OK, let me be the contrarian here and first state that I am a scientist and have worked in R&D my whole career. In fact, I still do reactions at the bench. However, I’m pretty tired of us blaming the “MBA’s” all the time.
    With that little intro, my first reaction to LaMattina’s semi-rant was quite different from everyone else’s. Mine was more like “What a self-serving piece of you-know-what that was.” Basically he absolves himself of any responsibility for the lack of productivity from the organization he ran, despite the fact that he had the largest R$D budget in the industry at his disposal. Not my fault, it was the people above me. There was an earthquake, a terrible flood. Locusts! It wasn’t my fault.
    So even with that, maybe his argument, self-serving as it may be, has some validity. Here’s my problem with it, however. I don’t see Merck (pre-Schering merger) or Lilly, the two companies he cites as having the right approach, doing much better. Their pipelines aren’t exactly bursting at the seams and they don’t/didn’t have the excuse of mergermania.
    As we all know correlation does not equal causation and symptomology is not the same as the illness. If anything I would argue that mergeritis has been caused by lack of R&D productivity and not the other way around.
    I won’t argue that mergers don’t help research productivity. They’re a distraction at best, crippling at worst. However, for whatever reason, most of these merged companies’ R&D were already limping pre-merger. If they weren’t then there wouldn’t have been a need for the merger.

  40. KP says:

    Agree with MTK that LaMattina absolves himself. He got the boot when Torcetrapib failed because Pfizer spent billions on acquiring Esperion and developing this drug when early data indicated that it would have safety concerns.
    Large pharma continues to pursue billion dollar drugs because that is what feeds its burn rate. Startup biotechs face the same dilemna because they need investors and pharma collaborations to operate, so they end up following the money.
    While innovation sounds good, investors and pharma companies are not really supporting new start up ventures until the innovation has been validated.

  41. Anonymous says:

    MTK – excellent post

  42. clinicalpharmacologist says:

    We started to fail the moment the first GANNT chart was introduced into drug development. We stopped using experience, judgement and intelligence to measure what was important and started measuring what was easy.

  43. Nick K says:

    MTK: Spot on analysis, unfortunately. La Mattina’s got the arrow of causation the wrong way round: had R&D productivity not diminished in recent years none of these destructive mergers would have occurred. Mergers are merely a symptom of a deeper malaise, not a cause.

  44. Anonymous says:

    #43, then we added Six and Lean Sigma and created an environment where empty suits flourished

  45. Annoyed says:

    @KP Torcetrapib didn’t come from Esperion. And after Torcetrapib Pfizer got out of LDL, HDL drugs for the most part. Roger Newton bought Esperion back from Pfizer in 2008.
    Much of Esperion’s work revolves around natural and synthetic phospolipids.

  46. 3TC says:

    @MTK, I can say from personal experience that the SB-GW merger was directly responsible for the demise of some very productive areas of research @GW. Consider that GW, through its acquisition of Wellcome, had a top-class anti-viral therapy sector and look at GSK’s standing in this area now where it depends almost entirely on compounds from the legacy companies. Almost every one who worked on hep C, HIV, flu’ etc has left or been booted out the door. It takes years to build productive teams but they can be trashed in weeks.

  47. anon says:

    agreeing with MTK; I think that most of the commenters would agree that the advice is generally sound (more R&D, less merging). I find it hard to believe that LaMatinna is doing anything other than sensing the direction of the prevailing winds, and speaking out to sound sage for the benefit of his consulting and VC businesses. he was around for the closure of the successful discovery sites at pfe, while allowing the unsuccessful ones to remain blithely entrenched in their terrible processes. Decision making and leadership at its worst.
    I am convinced that the success of the industry with ACE inhibitors and statins got too may c-suite types too used to easy money. couldn’t suffer the inevitable downturn after such huge wins to be had on their watch, so started the merger mania and cost-cutting to make thing seem like they were still geniuses, rather than recognize that they got some huge breaks and save that money for a rainy day (or, god-forbid, spend it on something other than themselves). They completely misunderstood their fiduciary responsibility, and destroyed lots of money in the process… most were vain, back-biting jerks (c.f. Forbes article mentioned a few days ago) interested only in their own.
    whether an R&D chief with a spine could have done anything about it is a question, but none tried, I bet.

  48. These observations are paralleled by an interesting article in Science Translational Medicine that points out some of the deficiencies of the current model for drug discovery in big Pharma. Whereas historically drug discovery was driven by innovative and entrepreneurial scientists, it is now subjected to micro-management by company ‘bean counters’. The problem is that, unlike the generation of other types of products, pharmaceutical drug development is essentially driven by ‘black swan’ events not easily encompassed by business school management theories. Thus attempts to reduce risk through top-down management have actually increased risk and jeopardized the entire model of what was previously a highly innovative industry.

  49. James says:

    What might be the net difference in productivity as measured by IP/revenue spent between (1) an R&D lab staffed by top Western-educated, academically collaborating, well-equipped, SINGULARLY-FOCUSED, organized for rapid response, and rewarded for IP-delivering effort and (2) an offshore CRO that is managed at arm’s length and gets its direction from someone that is putting in some rotational time from the rest of the business. Years ago when the corporations introduced so much distracting crap into the scientists’ lives, there was serious push-back. But now everyone seems to have acquiesced to working part-time at IP. Now we all talk about breaking the R&D paradigm and I agree, but I would rather have top, well-experienced, indisputably-creative talent assigned the opportunity to discover the new paradigm than have the “initiative” assigned to an MBA. Where will the industry get its new ideas from? MBAs, based on my experience are either parasitic weasels or sycophantic followers. There is much (rubbish) talk about how true entrepreneurs might be better off skipping university. For sure they would be better off skipping an MBA.

  50. TexUte says:

    Plenty of people knew, when this wave of mergers started 20 or so years ago, that it would be harmful to R&D productivity. Unfortunately those people were generally rank and file R&D types, not blowhard executives.

  51. Jim says:

    Pharmagiles has found a nice quote from JLaM that kind of puts his new-found aversion to mergers into perspective.

  52. RTP Lab Rat says:

    Having been through the Wellcome/Glaxo and later the GW/SKB mergers, the motivational environment is like night and day. At BW the pay wasn’t outstanding and there was no annual bonus, but people seemed happier and worked crazy hours because they loved the science. Now in GSK they collect metrics on everything we do, and people work crazy hours because they’re afraid of getting cut in the next “wave of synergy”. It used to be that the top people were scientists interested in science; now they’re former scientists who have become “business men”. The latest push to “simplify” ways of working at GSK is such a joke – – never has it been more complicated to get something done – – yet the mantra is “we are simplifying the business”. They must think it’s our first time at the rodeo.

  53. Anonymous says:

    #53…substitute Merck for GSK and your paragraph is still 100% true. Sad.

  54. fmrDiscoverySci says:

    I don’t know how I got this in my head, but I thought all along that Pfizer’s mission has been “elimnating excess R&D capacity in the pharmceutical industry.”

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