Several readers sent along this article from the Times of London (via the Ottawa Citizen) on GlaxoSmithKline’s current research setup. You can tell that the company is trying to get press for this effort, because otherwise these are the sorts of internal arrangements that would never be in the newspapers. (The direct quotes from the various people in the article are also a clear sign that GSK wants the publicity).
The piece details the three-year cycle of the company’s Drug Performance Units (DPUs), which have to come and justify their existence at those intervals. We’re just now hitting the first three-year review, and as the article says, not all the DPUs are expected to make it through:
In 2008, the company organized its scientists into small teams, some with just a handful of staff, and set them to work on different diseases. At the time, every one of these drug performance units (DPUs) had to plead its case for a slice of Glaxo’s four-billion-pound research and development budget. Three years on and each of the 38 DPUs is having to plead its case for another dollop of funding to 2014. . .
. . .Such a far-reaching overhaul of a fundamental part of the business has proved painful to achieve. Witty said: “If you look across research and development at Glaxo, I would say we are night-and-day different from where we were three, four, five years ago. It has been a tough period of change and challenge for people in the company. When you go through that period, of course there are moments when morale is challenged and people are worried about what will happen.”
But he said it has been worth the upheaval: “The research and development organization has never been healthier in terms of its performance and in terms of its potential.”
I’m not in a position to say whether he’s right or not. One problem (mentioned by an executive in the story) is that three years isn’t really long enough to say whether things are working out or not. That might give you a read on the number of preclinical projects, whether that seems to be increasing or not. But that number is notoriously easy to jigger around – just lower the bar a bit, and your productivity problem is solved, on paper. The big question is the quality of those compounds and projects, and that takes a lot more time to evaluate. And then there’s the problem that the extent that you can actually improve that quality may still not be enough to really affect your clinical failure rates much, anyway, depending on the therapeutic area.
Is this a sound idea, though? It could be – asking projects and therapeutic areas to justify their existence every so often could keep them from going off the rails and motivate them to produce results. Or, on the other hand, it could motivate them to tell management exactly what they want to hear, whether that corresponds to reality or not. All of these tools can cut in both directions, and I’ve no idea which way the blades are moving at GSK.
There’s another consideration that applies to any new management scheme. How long will GSK give this system? How many three-year cycles will be needed to really say if it’s effective, and how many will actually be run? Has any big drug company kept its R&D arrangements stable for as long as nine years, say, in recent history?