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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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In the Pipeline

« Day Off | Main | The PhD Problem: A Global Perspective »

April 25, 2011

Now They Tell Us

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Posted by Derek

"Big Pharma should get smaller". Now that's something that most readers around here will have heard or thought several times in recent years. But what if you were hearing it from Pfizer's former head of global development?

You are now. Peter Corr, formerly of Parke-Davis/Warner Lambert, had a chance to see how things worked from the inside at Pfizer. And as he tells Xconomy, it wasn't a thing of beauty:

Warner Lambert/Parke Davis was a larger company “but decisions were still made fast,” he says.

It was not until 2003, when Dr. Corr was Pfizer’s executive vice president of global research & development and president of worldwide development, that he realized the old model was not sustainable.

The company was spending about $8 billion on R&D but only producing about four products a year, a whopping $2 billion per drug, Dr. Corr says.

“That doesn’t work,” he says. “We needed to go out and license (drug candidates) and keep smaller (R&D) sites and let them go on their own. Let them be funded independently. Let them define how they can work best at their particular site as opposed to manage all of these sites around the world and pretend that we knew what was actually going on.”

Of course, this is basically what a lot of people were saying at the time, as they watched productive research organizations being shaken, shuffled, and shuttered. And it's just what many of us have wondered over the years, what the various companies that Pfizer has acquired might have done if they'd just been left alone. Could they possibly have been less productive than they were after they were absorbed?

Comments (18) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. You're Pfizered on April 25, 2011 7:39 AM writes...

This has the makings of a "Real Men of Genius" commercial.

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2. notmedchem on April 25, 2011 8:11 AM writes...

What I would like to understand is why non-clinical R is never just left alone to work to find new molecules and products. That seems to be how it was done in the 1940s/50s/60s....and it seems that companies like Lubrizol and Dupont still do that.

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3. Luvyurnmr on April 25, 2011 9:04 AM writes...

Could it be the problem is class based? Socio-economic? How many lab rats have been to the corporate offices? At the last company worked for, the digs were pretty swank. The cafeteria had a personal nutritionist on call who would come out and advise what entree would work best for your low carb diet. The food was the same price but the corporate types had a bigger and better selection while the labrats had the high fat, high carb selections that only a lumberjack could love. Well, do you really need to look good under that labcoat? The fitness center was bigger, the exercise classes had better schedules. The parking lot was full of Lexus and infinity SUVs. Even the mail center operated differently. If you were in the corporate center, you could send personal packages and mail internationally for steep discounts. At the labs? Sorry, we stopped that service for you. Now you pay the regular fedex rate.
I think the atmosphere is special up there. They negotiate the contracts, they decide what you need. Lab rats need guidance. They're like coal miners. They get their hands dirty. They don't have to dress up everyday because they wear lab coats. Aren't they like uniforms?
I think that's the way they see us. I once witnessed a woman from purchasing humiliate a PhD biologist during a purchasing training meeting because he had the temerity to ask what SAP was. It would have taken him five minutes to learn her job but a lifetime for her to learn his. I was shocked and appalled by her dismissive attitude. But that was what we were up against whenever we had to interact with the suits. They seem to be deliberately mysterious, unhelpful, mean and patronizing. It doesn't surprise me at all that they've screwed up research by trying to make all of our decisions for us. They have no idea what we do and they think they are little gods, reveling in their power to shut down research. (oh, yes, they do. Straight from one of the horses' mouths).
What I wonder is why with all of the business functions research has been forced to take on that we need these guys in the first place. They didn't do their jobs very well and they killed the goose.
It's probably too late to fix what's broken. There will be a wasteland as far as new drugs go for years to come. Their business is business. They got theirs. Too bad Corr is just starting to realize what ails Pfizer. From what I hear, their databases, one of their most valuable assists, are a complete wreck from their march through pharma without pausing for integration. Well, whatever. Does anyone do small molecule these days anyway?

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4. ex-chemist on April 25, 2011 9:09 AM writes...

Wish this guy had let Merck know about this before they closed the small, lean and productive sites.

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5. Hap on April 25, 2011 9:15 AM writes...

Why do I think they got their merger policies from Paul Reiser's character in "Aliens", and only now are they beginning to realize why that might not work so well.

I guess thinking about this beforehand would have been too much to expect from the people managing the company, even though it's much of what they are supposedly paid (in some cases, extravagantly) to do.

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6. Rick on April 25, 2011 9:29 AM writes...

The article goes on to say that "The drug industry today is increasingly following this decentralized, outsourcing model, according to Tufts University Center for the Study of Drug Development (CSDD)." Setting aside the credibility of the TCSDD, there's an even more significant issue raised by this phenomenon. While it's clear that outsourcing is indeed a very popular trend, it is NOT, repeat NOT, the same thing as running a smaller, more integrated, highly-communicative R&D organization. In fact, it is totally different from either the too small, too large or the just right R&D organization: it is a disintegrated R&D organization. It remains to be seen how whether a disintegrated R&D organization will function as efficiently, either in terms of dollars ROI or numbers of products produced per dollar, as a small, integrated R&D organization. Unless something new has emerged from the study of organizational behavior, the increased separation between team members and the increased number of information "hand-offs" between subunits, with their inevitable fidelity problems, should make the disintegrated organization significantly less efficient than the integrated organization. Unfortunately, it will take at least a decade to adequately test this idea. I think it's a bad idea.

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7. A2 but not forgotten on April 25, 2011 10:12 AM writes...

I wonder how long it took Peter to realize that after he built his mansion/navigational hazard in Groton?

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8. CMCguy on April 25, 2011 10:49 AM writes...

The problems of Big Pharma are not only attributable to overgrown size but have much to do with attitudes, cultures and leadership. The most frustrating aspect is they tend to have the necessary potential available resources; financial, functional areas, outsourcing network connections, access to technology, plus wealth of lessons learned. Even with inherent overhead wastage in the systems the failure to integrate the correct pieces inhibits progress. The biggest issues became attempted to satiate the hunger only with new blockbuster which typically are only recognized once they are mature.

My guess if many of the organizations gobbled up by Pfizer and other Pharma monsters had been left on their own the number of shots on goal taken would have generated more good successes possibly even a few unexpected big ones. At the same time reality of drug development/reg environment suggests would not have been dramatically increased and a few companies would not have survived or ended up reorganized.

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9. Blue Mountain on April 25, 2011 11:21 AM writes...

re. A2... completely agree.
Amazing how many former R&D heads have these epiphanies AFTER they've walked away and pocketed the cash...

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10. Hap on April 25, 2011 11:48 AM writes...

It's much easier to admit that you've eaten the seed corn and left a wasteland when you have a return ticket to wherever you came from, and lots of money and food for when you get there. Freedom from responsibility is so liberating.

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11. GreedyCynicalSelfInterested on April 25, 2011 4:06 PM writes...

The steel industry, the auto industry and now the pharmaceutical industry... Industries mismanaged, over-unionized and definitely bloated.

The suits in the steel industry used to build golf courses for themselves in the 1950's and 1960's. The auto industry executives were sometimes hand-picked by the UAW and the result is a matter of historical record. Now the pharmaceutical industry finds that it cannot afford to sell its products to a $10/hr workforce.

I'm not surprised by the ill treatment of the scientists by the executives. They have better jobs and are probably better looking and have more social skills. Their education seems to have paid off while the Ph.D. degree confers negative value to the holder. I wish I would have gone to business school and majored in economics.

But, I intend to be an example to my children, a negative example, that is. They can watch their pedigreed father work in a grocery store next to the other grocery baggers who did not graduate from high school.

I can sleep well at night knowing that no child of mine will wind up being some professor's bitch.

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12. Nick K on April 25, 2011 4:14 PM writes...

#3: Thank you for this post. You're absolutely spot on about the utterly shameful attitude of senior management towards the people who actually discover drugs.

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13. MW on April 25, 2011 4:20 PM writes...

The frustrating thing for me is that a lot of us in Groton were saying this (let the sites run independently and stop the global consensus crap) to Peter Corr back in 2000! We got lip service from him and the other execs (like McKay, McKenzie, etc), but no real (tr)action. We all thought that McKinnel's globalization of "best practices" meant more bureaucracy and less productivity. McKinnell is the main culprit IMO. The other guys were following orders. Doesn't absolve them, but does help explain things.

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14. milkshake on April 25, 2011 4:30 PM writes...

This reminds me of McNamara in his later years, telling mournfully that he knew all along that the Vietnam campaign wasn't going to be a success... Thanks, Dr. Corr, our SUGEN site was one of many ex-Pharmacia sites that you looted and pillaged for late-stage projects and then closed down.

I think Dr. Corr belated change of heart in a public interview is somewhat self-serving, given his current involvement with the virtual pharma Celtic group.

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15. Mary Peed on April 26, 2011 1:37 PM writes...

I worked with Dr. Corr when he was at Searle. Wasn't impressed then, and am not now. Always thought he was charming but also a self-serving opportunist. I've never seen anything to prove that opinion wrong.

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16. PHA-away on April 26, 2011 5:14 PM writes...

I second Mary. Peter Corr was DESPISED at Pharmacia; he was despised at Ann Arbor. I don't doubt that he was despised at Groton. Upper management material, no mistake.

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17. BlueBaron on April 27, 2011 5:48 AM writes...

One can count on this site to depress even the most avid scientist. In response to the comment by #11, it seems that one of the problems is that scientists don't have a union.

But besides that, it seems like in today's world, failure is rewarded. If upper management is paid ten times the science staff, they've already made a lifetimes worth when the company realizes 5 years down the line. Accountability dwindles with pay grade.

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18. GreedyCynicalSelfInterested on April 27, 2011 1:18 PM writes...

Unions are no solution. People in this field just don't seem to get one crucial aspect of their "Future-Improving" work. Science is something that does not "have to be done." You can postpone it, forgo it, or just do it when you can potentially make a killing by selling a company to ignorant investors. It's not something that needs to be done now, tomorrow or ever.

A doctor, dentist, tax accountant, or plumber usually responds to some need that "has to be done." Therefore, they have jobs, can be a sole practitioner and probably have full employment. Get an effing clue people! Your "profession" is not necessary.

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