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Derek Lowe The 2002 Model

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Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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May 25, 2006

Too Big to Discover Anything

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Posted by Derek

Raymond Firestone is a retired medicinal chemist with a long and distinguished career, most recently at Bristol-Meyers Squibb. He's never been very shy about speaking his mind, in person or in print, and it's nice to see that time has not mellowed him. A colleague, under the e-mail title of "Ray Firestone being Ray Firestone" pointed out a letter from him in a recent issue of Nature, in which he responds to the idea that the Bayer-Schering deal (and others like it) are necessary for innovation:

My experience, during 50 years' research in big pharma, is the opposite. Large companies are always inefficient because their command structure makes them so. Any organization with many layers, where power flows from the top down, works against innovation look at the widely reported depletion of big-budget companies' pipelines.

The reason is that people in the middle layers, who neither control events nor engage in discovery, are too afraid to respond favorably to genuinely new ideas. If they encourage one and then it flops, as most innovations do, they are marked for demotion or dismissal. But if they kill novel programs, no one will ever know that a great thing died before it was born, and they are safe. . .Nowadays most of the innovation takes place in small outfits, because it is not crushed there.

I can't say that he doesn't have a point, because I've seen just what he's talking about. But the flip side, which unfortunately isn't as common, is that some large organizations have been able to innovate because they're big enough not to mind a little failure here and there. And large organizations provide more places for people (and projects) to hide for a while, which is occasionally beneficial.

Anyway, if anyone has Firestone's e-mail address, feel free to send him to this recent post, which should make him feel right at home.

Comments (16) + TrackBacks (0) | Category: Who Discovers and Why


1. Novice Chemist on May 25, 2006 9:41 PM writes...

How many layers are there in a big-time company, anyway? Are we talking about more than ten? less than five (unlikely, I'm guessing.)

I've never quite understood this whole problem, because I've never worked at anything more than a small company (

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2. weirdo on May 25, 2006 11:58 PM writes...

How many layers? Depends on the company.

Some companies, 10 is the minimum. Associate, Ph.D., group leader, project leader, Asst. Director, Director, VP of (chem or bio), Sr. VP of Research. And that's just the research division, above that is corporate.

Then there are some big pharma that are very flat: Associate, Ph.D., Team Leader, VP, then corporate.

4 vs. 9. Your pick. Some people prefer 9 because there is "room to grow". But clearly less freedom and less responsibility.

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3. DLIB on May 26, 2006 12:08 AM writes...

His sentiments are my experience. Your counterpoint assumes that people work with the benefit of the large organization whereas it's my experience that the mid-level through VP generally are consumed with careerism. Everyone has a tight budget and although the whole drug discovery adventure is a risky business, individuals tend to be risk averse when it comes to putting dollars into risky ventures that could put the spotlight on their choices. That adds up to very safe ( within the bounds of normalcy ) decisions at the expense of true innovation ( not derivative )

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4. Derek Lowe on May 26, 2006 6:04 AM writes...

Actually, DLIB, Firestone's comments mirror my own experience more often than not. I've seen counterexamples, but if you had to put money down (which in a sense we are), his is the way to bet.

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5. D on May 26, 2006 8:03 AM writes...

I'm at the #2 pharma company, and we've got about 8 layers I'd say. Another issue is that people below VP often have no decision making capability. A lot of CYA goes on, that's for sure.

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6. Paul Dietz on May 26, 2006 8:22 AM writes...

It seems to me that upper management should be requiring at least a certain amount of failure, a quota of failed projects and wild ideas that didn't work out, with more failures in smaller projects.

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7. RET on May 26, 2006 9:00 AM writes...

Paul, as an academic, I appreciate your idealism. Unfortunately, that adds a considerable amount of subjectiveness to an individual review. One could also add, "You must read the literature broadly, attend more than one meeting a year, and other valuable exercises."

Are there any companies that evaluate group success equally to individual success? I assume process groups work this way to some extent. If indviduals got greater credit for the success of a group then "risk-taking" and other important complementary activities may be better accepted.

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8. secret milkshake on May 26, 2006 12:38 PM writes...

I think the problem with big companies is a lack of mechanism for eliminating bad top management.

A small company will go uot of business, larger corporation will eventualy merge/get taken over but it takes much longe and the loss is much bigger.

One field where big companies have advantage is high-throughput screening of chemical collections. We had collection that came from Kalamazoo, small molecules synthesized for med-chem projects, one by one, for over 30 years, and it was high-quality stuff. We found lots of good leads from there for almost all our kinase projects. Other chemical collections (combichem and from Monsanto) generated nothing usefull.

One big pharma company that is supposedly less philistine is Sanofi - the newly acquired sites (afetr mergers) are not closed if possible, they get their own budget, projects and high level of independence. That way a big pharma research can operate almost as a collection of small biotech companies.

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9. srp on May 26, 2006 4:26 PM writes...

Large-sample empirical studies in the 1970s and 1980s using data across many industries tended to find the relationship between innovation and size is an inverted U--the medium-sized firms had the highest rate of R&D per dollar of sales, highest patents per dollar of sales, etc. All these proxy measures for research output are pretty shaky, of course. And I don't know whether more recent studies have been conducted.

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10. MolecularGeek on May 26, 2006 4:44 PM writes...

On the idea of a failure quota: They aren't a drug company, but Costco DOES actually such a thing. They know that n% of the products they bring in won't be big enough sellers to justify continuing to stock them. Store managers, who have a large amount of leeway to make marketing decisions on that level, have the numbers of products pulled checked during their revies and they can be penalized for having too low a number of pulled products. The justification is just as given above. If you aren't failing some, you are probably playing things too safe.

In the question of how many layers are between you and the top, I would have to agree that more layers tends to lead to a certain ossification of the decision-making process. In my current position, I have more managers between me and the VP of my divison, than I did between me and CEO of my last employer. While they are in different businesses and success is a hard metric to define, I know that this environment isn't nearly agile as the last one. While this may not be inevitable, I think that the best way to avoid stagnation is to give a lot of opportunity for the people in the trenchs to take initiative, and I have yet to meet a middle manager who wants to show how little they contribute to the organization by letting their subordinates do all that they could.

One question. For those of you that work in matrix organizations, do you find that this increases or decreases the agility of your research organization, and does it encourage or discourage individual initiative?


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11. SRC on May 27, 2006 1:35 PM writes...

Sound decision-making defies simplistic quantitation, MBAs, accountants, management consultants and such notwithstanding. Quotas for this, that and the other, and virtually any other "metric" (how I detest that word, unless juxtaposed with "system") are laughably easy to game. How hard is it to generate more compounds, invention disclosures, patents, or publications (cf. the LPU in academia) if one is of a mind to do so, and their intrinsic value is not a factor?

Bottom line: statistics cannot substitute for judgment, and counting cannot substitute for thinking.

The curious part is why nominal decision-makers want to substitute algorithms for judgment. While on one hand doing so would get them off the hook for decisions that didn't work out ("it's the algorithm's fault!"), on the other, a robust decision-making algorithm would obviate the need for the decision-maker in the first place.

So either the algorithm they chose is unreliable, in which case they're culpable for the decision to use it, or it isn't, in which case they're expendable. Is it possible they haven't thought of that?

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12. IP Person on May 27, 2006 5:40 PM writes...

Dr. Firestone's dismal assesment echoes the thoughts of that chemist, about 15 years ago, who said, "If you say yes, you're wrong 50% of the time, if you say "no", you're always right". [My full previous post quoting this guy, who left a big pharma for a dinky biotech start up, was linked in the blog entry]

This doesn't answer the question of why the "culture of no" arose in the first place.

Answer: Limiting risk to smooth the stock price, for the benefit of investors. (That'd be us.) Plus some greed in executive compensation.

One thing I've seen work moderately well: spin-offs.

Scientist get the "no" answer, but company funds 50% of a new company and gets 50% stock. Company limits downside (as well as up side), but eliminates culture of "no" from the big company.

Roche (who owns most of Genentech) is the master, imo, even though they probably were kicking themselves all during the '90's as to why they bought that company.

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13. Canuck Chemist on May 28, 2006 1:19 PM writes...

SRC, that was very well put. I think that metrics hold much greater value for products that are much more well-defined, or predictable, then for drugs in development. That being said, I think it's fine to use measurements for specific tasks in the discovery/development process which are quantifiable and may be a bottleneck in the progress of a particular project, such as turnaround time in an important screening or tox study. Additionally, I think that specific goals and target numbers are fine if they are highly specific to each project, and realistically address the problems inherent to each. Otherwise I think that they become basically meaningless to the scientist on the bench. I am not sure how upper managers could use these "global" metrics to make difficult choices about complex projects, but they would seem to have value in identifying potential bottlenecks in the overall process.

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14. SRC on May 28, 2006 7:03 PM writes...

Thanks, Canuck Chemist.

I fully agree that numerical measures can be useful for things that are under someone's control, although even then one has to use judgment in interpreting such numerical measures. Your example of a service department assessed on mean turn-around time to perform an analysis is well-taken (the judgment enters in assessing whether speed is coming at the expense of reliability).

Research, as we all appreciate, is more akin to wild-catting. Progress comes in fits and starts, and often does not strongly correlate with resources expended. These characteristics drive many business guys nuts because they have more of an engineering outlook than scientific, so many subconsciously expect progress to be a linear function of time and money. Metrics based upon research progress are therefore intrinsically flawed, because qualititative progress (e.g., generation of candidates having specified properties, as opposed to quantitative progress, e.g. scaling up a synthesis) is beyond the control of those being assessed.

Speaking of meaningless measures, in a previous company bonuses were assessed dependent upon some arcane accounting measure that no one in the R&D building understood, much less influenced, and still less controlled (something based on efficiency in use of working capital, IIRC). Needless to say, the company didn't meet the goal, and no one (at least, none of us) received a bonus, which was probably the whole idea. Useful metric? Depends on your viewpoint, I guess.

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15. Canuck Chemist on May 29, 2006 1:56 AM writes...

SRC, you bring up a good point about bonuses. If the folks in the trenches can see no obvious connection between their work and the quantities being measured, then you basically defeat the purpose of having bonuses. Plus management loses credibility and becomes a "Big Brother" outfit in the eyes of the employees, when goals aren't met and bonuses are denied. The last company I worked at (NPS Pharma, a medium-sized biotech) seemed to do a pretty good job with their goals and metrics. Most of the goals were very project specific, and gave something tangible for the scientists to shoot for, even if meeting (or exceeding) the project objectives had a significant chance element to it.

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16. John Fahey on May 23, 2008 6:42 AM writes...

How delightful to see Raymond Firestones's name again. I worked under him at Merck in the 1970s for several years. As a young Ph.D. I found his mentorship thoroughly rewarding. He enthusiastically supported my innovating approach to synthesis and that led to novel cephalosporins and imipenem. Among warmest memories of our friendship are the time he was presenting my work at a symposium at Yale in front of Nobel Laureates and stsrted his talk by having me stand up in the audience under spotlights as the person who did the syntheses - he always believed in giving credit where it was due - and the time when he challenged me to prove I could do the imipenem ring closure by a method I proposed - then 24 hours later celebrated my success by taking me for lunch to our favorite italian deli with another good friend and colleague, Ronald Ratcliffe. A wonderful man, a brilliant organic chemist, a rennaissence figure of many accomplishments.

John (Sean) Fahey

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