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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

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: derekb.lowe@gmail.com Twitter: Dereklowe

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April 7, 2009

Scientists Running Your Drug Company?

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Posted by Derek

There's an interesting article that showed up in the Financial Times about the leadership of drug companies. Specifically, the number of them that are run by scientists (always lower than you would have thought) is dropping even further.

"Only one large western pharmaceutical company will be run by a scientist (John Lechleiter of Lilly) following completion of the current round of acquisitions, in spite of the growing need for strengthened innovation to develop new medicines. . .

The changes reflect a shift for the scientists who once dominated senior pharmaceuticals positions to give way to executives with backgrounds in marketing, legal or other more general business backgrounds.

The evolution mirrors growing legal and marketing expertise required to operate in the US, which remains the world’s largest medicines market, although its recent sluggish growth and renewed demand for greater innovation and science-based assessment of drugs may suggest different skills will be required in future."

I wonder, though, how many of the background assumptions here are true. I don't think that the large drug companies have been dominated by scientific leadership for some time. This (to me) isn't a recent shift, although it may well have accelerated. And we've gotten into discussions around here a couple of times (most recently on the news of Lechleiter's appointment) about whether you even want a scientist in the top job. Opinions, to put it mildly, are divided on how much difference that makes, and (if it does) which way you'd rather go.

My take, for what it's worth, is that scientific training can be desirable in a drug company CEO, but it's not sufficient, or always even necessary. The skills needed don't overlap as much as you might think between science and management, even in a company that makes its living from science. The problem is, I don't think that the particular skills associated with law and MBA degrees are sufficient, either. Being good at running a large organization is a rather rare quality. And it's not always easy to recognize: some companies have issues (good ones or bad!) that will swamp most of the signals you might try to get about the qualities of their CEO.

Comments (14) + TrackBacks (0) | Category: Drug Industry History


COMMENTS

1. Hap on April 7, 2009 12:38 PM writes...

People skills are useful. Intellectual honesty would seem to be a prerequisite, although lately it seems to be an automatic disqualifier for higher management - the ability to admit when you're wrong, or don't know something, and to change accordingly, would seem to be helpful. Familiarity with business and the sources of certainty and uncertainty would help, too, as well as the ability to analyze them. Scientists don't have a monopoly on these qualities, though I wonder if some fields actively discourage their cultivation.

If the business is driven by stockholders and others who don't want to hear bad news, it almost doesn't matter who's in charge, other than an omniscient being. If that were the case, people would reward companies who tell them what they want to hear, and eventually, that's what you would get.

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2. startup on April 7, 2009 2:47 PM writes...

I had a conversation with a guy from GE a few years ago, and he noted, that it was interesting how Jack Welch who had chemical engennering background saw the future of company in financial serives, and the moment Immelt (an MBA) arrived they saw some significant investments in the science side.
And from my personal experience, nothing is more devastating to a company than being run by a scientist who thinks that his ideas are the only ones worth pursuing.

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3. CMC guy on April 7, 2009 5:10 PM writes...

While I agree coming from Science/Engineering is not a prerequisite to being a CEO of a pharma company one would hope any such CEO has grown up in the Industry so has the expose to the elements involved. Pharmaceuticals, particularly in R&D areas, requires diverse disciplines and expertise to produce so not sure what best background is to run such organizations. However with so dominate business/legal/marketing at all levels pharma has IMO shifted away from a science/medical core as many at the top don't understand and appreciate the power and problems associated with drug R&D. That is why they seek "fads" to address the productivity rather than having the right people working on the right projects because is much more elusive to figure out.

At the same time having too heavy techies in charge can be just as concerning as such people get absorbed in their own worlds (i.e. startups comment) and do not transition company well/timely to those many other areas (mfg/legal/reg/marketing) necessary to succeed. Its really about building a good executive team with varied expertise that can provide leadership that keeps mission focus and deals with multiple factors.

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4. srp on April 7, 2009 6:57 PM writes...

That omnicompetent person who can understand the science and the research process while also managing marketing effectively, handling legal issues with aplomb, negotiating deals skillfully, while attracting, promoting, and motivating the best people is a rare bird. Of course, the CEO delegates like mad but that requires knowing whom to assign to things and knowing when to question and/or alter what others are doing--it still requires enough meta-knowhow about all these areas to not screw it up.

Looking at business outside pharma, I am personally struck by the success of complementary CEO/COO teams. (I am sampling on the dependent variable, success, here so there is no scientific claim being made; this is just an anecdotal observation.) Honda/Fujisawa were a really good technical/commercial team, Eisner/Wells worked great at Disney (and in fact things went south when Wells departed the scene), Murphy/Burke at Capital Cities, and there have been lots of other complementary pairings that worked out over long periods of time.

Has this pattern occurred in pharma in the past?

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5. Anonymous BMS Researcher on April 8, 2009 6:53 AM writes...

Well, I have a strong scientific background but am sure I would make a terrible CEO.

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6. larry on April 8, 2009 7:54 AM writes...

The Financial Times article needs a correction.

John Martin, CEO of Gilead Sciences has a PhD in Chemistry. He took Gilead from a struggling startup to a market cap larger than Lilly's in less than 20 years. Despite sometimes being characterized as a biotech, all of Gilead's products are pharmaceuticals.

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7. Sili on April 8, 2009 11:56 AM writes...

A pure scientist in charge may not be ideal. Most certainly not if it's one - as suggested above - that's fallen in love with their own hypothesis and forgotten the Scientific Method.

Which is pretty much what's wrong with the marketing types and the financial sector. Too much fantasy, too few facts.

Margaret Thatcher made her career in law and politics, but she had a B.Sc. in chemistry. Would we have an ozone layer still, had she not known enough basic science to back the Montreal protocol?

Not directly relevant, but if the one in charge has no idea what or how their business foundation works, they cannot but fail.

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8. CMC Guy on April 9, 2009 10:36 AM writes...

FT has a related Interview with Lilly CEO that may be of interest

http://www.ft.com/cms/s/0/f25e0e24-2243-11de-8380-00144feabdc0.html?nclick_check=1

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9. Ryan on April 10, 2009 3:51 PM writes...

IMHO the skills needed to be a good CEO, in any industry, are pretty distantly removed from academic training. SRP said it well above, omnicompetence is the true need, and generally omnicompetence for high level strategic issues.

Part of this is knowing that it's ok to not know everything, particularly if you've been away form the bench for a while. PhD or no, i would feel better if the pharma ceo deferred to his lead R&D team members on present technical issues.

rj

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10. jgault on April 10, 2009 11:26 PM writes...

I have to go with CMC guy here. Intimate knowledge of research and development at least keeps you from chasing your tail on the latest fads to improve productivity. For every egotistical scientist who is enamered with his own ideas is a marketing genious who thinks there is no room for proton pump inhibitors because we have H2 antagonists. I say, science background required but not sufficient to run big pharma

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11. Real Science Doesn't Lie on April 12, 2009 8:38 AM writes...

Scientists make terrific salespeople, particularly when they are attached to a pet project or idea. A non-science CEO doesn't have a choice but to believe that the scientists that report to him know which projects will succeed, and this is where the problem lies. You can teach a smart scientist the business skills he or she needs to run a company, but you cannot teach a business professional the science they need to make good research decisions. I think Lilly has the right idea.

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12. Bored on April 12, 2009 7:24 PM writes...

Business leadership is mostly politics, which by its nature is deceptive. Science is about pursuit of truth. The twain rarely successfully meet.

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13. zenscientist on April 24, 2009 2:49 PM writes...

I think the last 8 years of having an MBA president and a plethora of disconnected, corrupt MBA-trained CEOs has shown that you are more likely to get someone who is willing to be honest in the face of adversity if they have been trained to seek truth as a scientist. Although, as we know scientists can lie, cheat and steal as well. I think in the 21st century it would be nice to see more PhDs in executive positions, but at the end of the day there is no "right path" that exists for someone to become a great leader and CEO. Character and experience are what truly matter and if one has been trained as scientist during the course of their "experience" all the better!

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14. xtc on September 8, 2009 4:25 AM writes...


At the extremes, it seems overly simplistic too ignore the obvious team structure of modern business organizations, and say that one person's background will determine the success of a biotech/Big Pharma company. I have my biases about the value of one background over another based on my training, but I do like the comment: "...building a good executive team with varied expertise that can provide leadership that keeps mission focus and deals with multiple factors." Loss of focus is devastating and happens in the mileu of what should better be called engineering projects without prototypes. Science, as a word for a particular activity, is loosely thrown about when what is really occurring in biotech/Big Pharma is engineering. Engineering seeks to find solutions under the constraints of pre-defined parameters (e.g.tolerance measures) and works towards a final vision or product. Science is, in the best possible circumstances, seeking to answer a large question with predictive models constrained by strong or weak inference (e.g. physics, chemistry), or builds convincing descriptive evidence from historical and constrained data (e.g. RNA-based world) that spurs new questions and research. Far too often in biotech/Big Pharma, the data is made to fit the pre-ordained product/result by a process of purposeful neglect of data that doesn't fit the end result. Rare indeed does Biotech/Big Pharma examine its failures. Yhese tactics, in science, would eventually lead to falsification of claims, usually by one's competitors, and lost opportunity for leaning about reality.

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