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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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February 13, 2014

Jobs, He Says

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Posted by Derek

If you want to hear the most perfectly conventional wisdom about STEM jobs, then come and pay heed to John Lechleiter, the CEO of Lilly. He's been giving speeches and writing op-eds for some time about the issue, and he has another one out in Forbes. It's the same one. It's always the same one:

Right now, there are over 600,000 unfilled manufacturing jobs in America.

Many employers are eager to hire. They’ve got capital set aside specifically to invest in expanding their workforce. And they have applicants — problem is, many of them simply don’t have the training and education needed to perform the work.

Largely to blame is the “STEM” skills gap, so-called after the core subjects of science, technology, engineering and math. It’s real and it’s growing. If we’re going to retain America’s greatest competitive advantage — our genius for innovation — we must inspire more kids to pursue STEM skills through education that’s engaging and effective.

It's hard to speak up against this without sounding like some sort of villain out of Charles Dickens. "Study science and math? Fah! Filling their heads with nonsense, I call it!". And I really can't argue against the idea that students should be taught these subjects, or against the idea that they certainly could be taught better than they are now. So why is Lechleiter going around saying that he's in favor of apple pie, over and over and over?

My guess is that this is only half the speech. Here's the other half, where he blames tax and immigration policy. Lilly, as is well known in the industry, has been shedding employees with relentless energy for many years now. They've offshored jobs, they've ditched whole departments and hired them back as lower-paid contractors, they've reduced head count in just about every way you can imagine short of launching people into space. But given the fix that the company's in, that's still not enough.

This history makes reading any of Lechleiter's editorials a bit hard to take. For example:

And just like other STEM-centric industries, biopharmaceutical firms face a scarcity of incoming talent. Nationally, private industry is expected to add about one million new STEM positions over the next decade. But there aren’t even enough qualified applicants to replace the Baby Boomers retiring right now.

How about the people who have been "retiring" from Eli Lilly over the past few years? How about the ones that are going to feel the recently-announced billion-dollar cutback in Lilly's R&D budget? They're going to do that without laying more people off? And that's after vast reductions have already taken place. In July 2004, the company had 45,835 employees. Now they say that they have "over 37,000", and keep in mind that they've added several thousand people just by acquisitions (i.e., not by creating new positions). So the total loss of jobs since 2004 is probably around 12,000.

And their CEO goes around talking about having trouble hiring people.

Comments (85) + TrackBacks (0) | Category: Business and Markets


COMMENTS

1. anon on February 13, 2014 11:21 AM writes...

Another small bit of my faith in humanity - gone forever...

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2. Anonymous on February 13, 2014 11:26 AM writes...

You are incredibly restrained when you write these posts, Derek. I occasionally comment on your blog about the need for change in this industry. The big pharma model is dead in the water, anyone with half a brain can see that. But to read Lechleiter's utter nonsense is frankly offensive and appalling in equal measure.

How the man puts his name to this stuff is beyond me. Do you think his delusional state has reached the point of him actually believing this stuff?!

Disgraceful

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3. Teddy Z on February 13, 2014 11:29 AM writes...

Don't forget that taking away garbage cans from every one's desk will positively impact the bottom line.

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4. Chemjobber on February 13, 2014 11:35 AM writes...

@2: If you would like to hear Lechleiter actually say this garbage from his own lips, click on my handle for a link to a recording of a January meeting.

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5. Hap on February 13, 2014 11:37 AM writes...

Perhaps he means that he can't find (cheaper, younger, trained) people to replace the people he and Lilly laid off. I imagine that potential employees might look at Lilly's (or the rest of pharma's) actions and business prospects and decide that their future is unlikely to be rosy, and that if they want to find jobs or make money they'd probably have do something else. It must be frustrating for Dr. Lechleiter to see other people acting with the kind of self-interest that only Lilly is supposed to act with. How unfortunate.

Preaching to the choir and all, but I'd be interested if Dr. Lechleiter can explain why young people should be spending ten years and lots of money to work in a field where the business model is "get startups to work their people into the ground or get cheaper people elsewhere to find your drugs so that you can buy their companies and lay the employees off or outsource them". I'd probably also be interested in how countries are supposed to fund the educational and physical infrastructure to get the business environment tech businesses want with the reduced taxes they want to pay, or where businesses are going to find people to buy their things if individuals are paying lots more in taxes to fund their businesses.

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6. Wile E. Coyote, Genius on February 13, 2014 11:38 AM writes...

Wow, and he trashes his own employees, too (of which I was one formerly - left of my own volition). Being a preclinical scientist, I am glad to know how I was regarded, as evidenced by his quote from his article below.

"Many STEM jobs in biopharma don’t require as much formal schooling as high-end research positions, but still compensate well for specific STEM expertise. Such jobs include preclinical scientists, software developers, biostaticians, and lab techs."

Just so happens I have a DVM, a PhD, and board certification, which were prerequisites for the position I held when I applied there. And yet the preclinical scientists don't require much formal schooling. Good to know.

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7. BigA on February 13, 2014 11:42 AM writes...

Shortage of STEM Students? The gov't lab where I work hires over 1000 student interns each year to do science research, and that's a small percentage of the applicants. I've had 3 students contact me personally this year, which has never happened before. From what I'm seeing, young folks are going into science, and they are seeking research experience.

Maybe the shortages Lechleiter refers to are in young, early career folks who will work for less pay than the experienced folks they laid off. Maybe Lilly et al. need to hire postdoc and student workforces like many of the national labs and academic institutions do. I wish these CEOs would just be honest with us for a change (about their concern for bottom line) rather than bemoaning problems that don't exist (like a "qualified" workforce). But, as my dad used to say, "wish in one hand and [spit] in the other and see which one fills first."

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8. luigi on February 13, 2014 11:48 AM writes...

Maybe Lechleiter "forgot" all the people he's laid off. Maybe that's the reason Lilly is so interested in drugs for AD?

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9. The Iron Chemist on February 13, 2014 11:49 AM writes...

Maybe he'd have better luck finding qualified people if he didn't treat them like dirt?

And I can tell you that this problem's trickling down to academics as well.

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10. Anonymous on February 13, 2014 11:49 AM writes...

Thanks but no thanks Chemjobber... Reading it is about as much as I can handle

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11. RKN on February 13, 2014 12:13 PM writes...

And just like other STEM-centric industries, biopharmaceutical firms face a scarcity of incoming talent.

Translated: We are running out of people to layoff!

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12. mdb on February 13, 2014 12:16 PM writes...

How many of the laid offed R&D folks apply for manufacturing jobs? My bet is not many (probably close to 0). Give them enough time and expiring UE benefits, more may apply. There is very little cross over from R&D to manufacturing, a little from manufacturing to R&D.

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13. Not a highly paid consultant on February 13, 2014 12:26 PM writes...

It is sad how our industry seems to be more interested in ways to fail faster and cheaper, rather than trying to raise the success rate for Drug Discovery.

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14. Chemjobber on February 13, 2014 12:29 PM writes...

In my handle, I've linked the Deloitte/Manufacturing Institute report where this "600,000 unfilled manufacturing positions" number comes from:

Here is how they report it:

High unemployment is not making it easier to fill positions, particularly in the areas of skilled production and production support. There’s no way around it: respondents report, on median, that 5% of their jobs remain unfilled simply because they can’t find people with the right skills. Translated to raw numbers, this means that as many as 600,000 jobs are going unfilled, a remarkable fact when the country is facing an unemployment rate that hovers above 9%.

First, the report is from 2011. 2nd, it's not a census of unfilled positions, it's an online survey of executives asking their opinion of the matter and finally, it's an extrapolation of their opinion. It's a wild-ass guess and this number is being used to lie to the general public and politicians -- it's a damned shame.

Also, Lechleiter's claim that "private industry is expected to add about one million new STEM positions over the next decade"? 75% of those are in computers and engineering, with only 5-8% being life science oriented.

What is stunning about this is that Lilly is in a relative shambles, yet Lechleiter's passion on this issue is so strong that he's going around Washington, shaking a tin cup for Bill Gates and Sergey Brin. I don't get it.

(And he's probably the most prominent non-academic Ph.D. organic chemist in the country - what a disgrace to our profession.)

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15. anchor on February 13, 2014 12:49 PM writes...

Dr. Lechleiter is trolling on us and I ask, have you no shame? May be some of my ex-Lilly friends can spotlight on what is his claim to being a celebrity other than a CEO? His talk on STEM and related subjects is like rubbing salt on our wound which after 4 years of being gone (from big pharma) is still garden-fresh!

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16. anchor on February 13, 2014 12:50 PM writes...

Dr. Lechleiter is trolling on us and I ask, have you no shame? May be some of my ex-Lilly friends can spotlight on what is his claim to being a celebrity other than a CEO? His talk on STEM and related subjects is like rubbing salt on our wound which after 4 years of being gone (from big pharma) is still garden-fresh!

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17. Anonymous on February 13, 2014 12:52 PM writes...

Skilled production and production support. Which classes in college does one need to take to pick up these skill sets?

Hey, how about taking the time to train people?

Lechleiter is in a no lose situation given his compensation level and prospects after Lilly's shareholders have had enough. He can join LaMattina as an expert Pharma talking head, ignoring the roles they played in the loss of so many jobs.

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18. MoMo on February 13, 2014 1:01 PM writes...

Lechleiter's serotonin levels are out of wack to spew such grandiose craziness.

That is the only explanation.

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19. NMH on February 13, 2014 1:05 PM writes...

I think Lechleiter is playing a numbers game. The more STEM scientists competing for jobs, the harder they work to try to get the coveted "good job" and the harder they will work to keep it. Also, the more people in the system the more likely you will have the "golden child" chemistry genius appear in your company. But this comes at a staggering human cost of a lot of underemployed mediocre research scientists, like me.

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20. SteveM on February 13, 2014 1:08 PM writes...

Re: 14 Chemjobber "High unemployment is not making it easier to fill positions, particularly in the areas of skilled production and production support. There's no way around it: respondents report, on median, that 5% of their jobs remain unfilled simply because they can't find people with the right skills."

And many of those jobs are unfilled because company management can't find skilled machinists and other trades people who will work for the 9 bucks an hour that the corporate cronies want to pay them.

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21. Anonymous on February 13, 2014 1:12 PM writes...

@13: That's because if a drug doesn't have the potential, it doesn't have the potential. Period. You can only "increase success rates" by eliminating those which don't have potential, and better to do that cheap and fast.

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22. John Wayne on February 13, 2014 1:18 PM writes...

"...They've reduced headcount in every way you can imagine short of launching people into space."

Thanks for getting me to laugh out loud.

This may be a dangerous foreshadowing of worse things to come for laboratory scientists. I can show you a graph that shows great correlation between improved laboratory safety and a decrease in new drugs. Stay tuned for a paper in Nature Drug Discovery that supports a new research model involving human sacrifices at key gating points in the process called "Iterative Decimation of Research Staff: Economical and Successful"

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23. SteveM on February 13, 2014 1:19 PM writes...

Re: 18 MoMo "Lechleiter's serotonin levels are out of wack to spew such grandiose craziness."

Maybe. He should be force fed Cymbalta. The car wreck of withdrawal would serve him right...

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24. Anonymous on February 13, 2014 1:29 PM writes...

I worked for Lilly during the 70s & 80s when they would regale us with stories of how management during the Depression would not let employees go but retain them even to paint fences. Omnia gloria fugit.

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25. Anon on February 13, 2014 1:33 PM writes...

I am sorry but Lechter seems to be totally unhinged from reality. I especially like how he thinks he has to even now explain what the abbreviation STEM means. This makes me believe he thinks he is lecturing to clueless clods.

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26. paperclip on February 13, 2014 1:47 PM writes...

I went to LinkedIn yesterday, where they often show how many applications a job posting has received. One opening received over 200 applications in just one day. Stunning proof of the real and growing STEM shortage.

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27. Anonymous on February 13, 2014 1:53 PM writes...

I find it's always more difficult to hire people after you have previously laid off all of them and/or their peers.

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28. Ayatollah tickled with lillies on February 13, 2014 2:03 PM writes...

But isn't this John L the same dude who said Lilly would produce 2-4 new drugs every year?

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29. RL on February 13, 2014 2:13 PM writes...

Is there any way to write a column that would be a rebuttal of Lechleiter? (DL, possibly you?) Especially given the company's layoff record?

This man appears to no longer be in touch with reality. I mean it. Doesn't Lilly make an anti-psychotic drug for him to take?

However, to the thousands of readers of Forbes who don't follow pharma and science employment issues, his words sound mighty fine. They are, in fact, rather soothing - the way out of our national economic/employment problems is to simply increase the number of people studying STEM subjects. This is far easier to achieve than bringing back outsourced jobs from overseas, or revising the corporate tax code, or making what are now temp/contract jobs into permanent positions, and so on.

I also think he is trying to deflect criticism of Lilly's success rate of late - it is easier to blame a (suppposedly) poorly trained workforce for the company's woes, rather than executive decision-making.

(BTW, what are the Cymbalta withdrawel symptoms? I've had doctors offer this drug to me in the past, though I've never taken it.)

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30. boo on February 13, 2014 2:28 PM writes...

Lilly just tweeted about the Forbes article at https://twitter.com/LillyPad/status/434031255525793792

Those of you on twitter might want to respond accordingly.

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31. joe on February 13, 2014 2:29 PM writes...

I knew that putz when he drank beer at fall down bars in cincinnati - you just wanted to dog pile on his weasel smirking face along with the other a-holes from Xavier HS he hung around with, instead you went outside and puked 3.2 beer all over the sidewalk and laughed your ass off. Mistake. Should have dog piled him.

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32. Screener on February 13, 2014 2:33 PM writes...

Why should pharma CEO's be immune from the hypocritical bullshit that CEOs of every other industry exhibit? I'd like to think that we work in an industry that is at least partially fueled by an altruistic sense of helping the sick, but I'm afraid it just ain't so. It is the rare pharma exec that conveys a believable sense of compassion - in my experience these have almost always been MDs that have risen to senior exec positions - and those guys don't always last long in the business. Not hard-headed enough, I guess.

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33. Esteban on February 13, 2014 2:36 PM writes...

Ah, Lechleiter. He likes to tout his chemistry degree but he was long ago assimilated by the MBA Borg.

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34. Hap on February 13, 2014 2:45 PM writes...

13: "Fail fast and cheap" seems to have as a goal to make the people who make the failures/successes disposable (so that you can just get a lot of cheap ones), while the people that determine the processes and constraints for success or failure (upper management, consultants) are the core creators of value. Thus, it seems obvious why pharma management keeps banging on the theory like a monkey with a drum.

Of course, they seem to have reduced the "fail often" part of finding drugs to practice - the finding part, not so much. It doesn't matter how fast you fail if you never succeed, but I'm not sure who they've left employed to learn from.

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35. Anonymous on February 13, 2014 3:02 PM writes...

@34: See 21.

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36. Hap on February 13, 2014 3:27 PM writes...

But if you don't find anything with potential, getting rid of the ones that don't work more rapidly still doesn't help you - you stay in business by making drugs, not getting rid of losers. The underlying assumption is that you will still find candidates (because it's a random process depending only on how many tries you get), but will also get rid of losers faster. The assumption of randomness is an assumption, not a fact. Getting rid of many of the people who used to find drugs and replacing them with lots of others who haven't done it fits with a total committment to the randomness theory of drug discovery, but doesn't mean that that theory is correct.

Of course, you also don't know why things fail - getting rid of lots of losers early would help, but the late failures are lethal. Of course, the people that could do that are probably going away, too. Oops.

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37. dearieme on February 13, 2014 3:42 PM writes...

Politicians, and Captains of Industry, have advanced this line in Britain throughout my life. Alas, only once have I had the chance to ask the obvious question: what subjects are your children's degrees in? But, by God, it hit him below the waterline. Hypocritical creep.

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38. Anonymous on February 13, 2014 4:28 PM writes...

Do these speeches bemoaning the lack of STEM training and education in the US ever have a Q&A follow up? Has anyone ever asked Messrs Lechleiter, LaMattina, Brin et al to give SPECIFIC examples of the "training", "education" and "skills" that only China, India and other low wage countries provide their students?

I would suggest that we start a letter writing campaign to C-SPAN asking them to do a Washington Journal segment where the guests are a "we need more low wage non-overqualified scientists to address the STEM shortage" proponent and someone like Derek or better yet, an unemployed "overqualified laid off ex-pharma STEM employee" who can counter the BS in real time. It would also give us all the opportunity to call in and force tools like Lechleiter to face serious follow up questioning.

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39. Pedantic Speaker on February 13, 2014 4:36 PM writes...

Mr Lowe, the supposed skill shortage has been debunked more than a year ago.
As Krugman notes (http://krugman.blogs.nytimes.com/2012/11/25/the-fake-skills-shortage/):
"Whenever you see some business person quoted complaining about how he or she can’t find workers with the necessary skills, ask what wage they’re offering. Almost always, it turns out that what said business person really wants is highly (and expensively) educated workers at a manual-labor wage. No wonder they come up short."
The article he links to (http://www.nytimes.com/2012/11/25/magazine/skills-dont-pay-the-bills.html) shows how little the employers value the skills they say they need:
"Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour.

The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says."

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40. Lyle Langley on February 13, 2014 5:10 PM writes...

@35 (and @36)...

I completely agree with Hap's assessment of the "fail early, fail cheap" mentality in Pharma. All this does is reward the management for never taking a risk, never trying the extra experiment that may just give you the information you need. No, why do that when you are rewarded internally and externally for saying no. It's the same mentality that those of us in Pharma (or used to be in Pharma like myself) saw all the time when there was a number of DP (PCC, ECN, whatever the abbreviation is) candidates a year that were needed, by golly, we are getting those numbers no matter what. Pharma is not in the business of killing projects, they are in the business of discovering and developing drugs. Please show me that the mantra of fail early, fail cheap over the past 10 years has increased success rates. Doing good science does not exist in Pharma anymore...it's either not there because management doesn't know what they are doing (e.g., Lechleiter) or they have decimated the workforce so badly that the morale is horrible (e.g., Lechleiter), or both (e.g.,Lechleiter).

I disagree with @21 about "if a drug doesn't have potential, it doesn't have potential, period". Pretty strong black and white statement. Yes, when the mantra is fail early, fail cheap, there are a lot of compounds that don't have potential. Especially when you don't look for that potential because you're not rewarded. Sometimes, drugs come out of things that looked dead - I know, crazy idea that there was a scientist that asked that one extra question.

Dr. Lechleiter is a d-bag, plain and simple.

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41. Anonymous on February 13, 2014 5:14 PM writes...

@36 Hap: But if you get rid of the losers faster and cheaper, you have more money left to invest in more potential winners. Would you rather keep trying with the same loser until you run out of cash? Like Lilly does, for example?

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42. Anonymous on February 13, 2014 5:28 PM writes...

@39: "Sometimes drugs come out of things that look dead".

True, and sometimes people win the lottery, or beat the casinos.

It's that kind of irrational, anecdotal vs statistical thinking you show which explains why scientists aren't generally trusted to make business decisions. Not all scientists, granted, but your "rationale" doesn't help break the stereotype.

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43. Anonymous on February 13, 2014 5:32 PM writes...

@39: "I disagree with @21 about "if a drug doesn't have potential, it doesn't have potential, period"."

Then you disagree with basic logic, because what you are saying is that, if x = y, then you disagree that x=y!

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44. Hap on February 13, 2014 5:46 PM writes...

The money you've got is from winners, though, and if you can't find them, you don't have any money to find winners or losers later. Failing fast and cheap seems like trying to find things wrong with potential dates so as not to be hurt; there are lots of bad things to be aware of in people, but trying to nitpick your way to perfection just gets you alone.

"Fail faster" seems to be trying to allowing companies to avoid making judgements (and requiring people qualified to make them) by killing everything that doesn't move; what you want is to have enough info to purge problems early and to fix what can be fixed, and people who can distinguish the two (if it can be done).

In addition, unless companies are developing a lot of quality info, the stuff they don't know is hurting them in PIII, when it really costs money (and that seems like the kind of data that you can't get if you want to fail cheap). I don't know if "fail faster" is lowering the fraction of P3 failures, but if you don't know what's going on, it seems kind of hard to avoid by failing early.

Considering how well the business people have been running pharma, a lottery ticket might have been a better investment.

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45. annon too on February 13, 2014 5:52 PM writes...

I think his statements are pretty clear in sending a consistent message: there are not enough new folks entering the work-place who can be paid less to make up for the older, experienced, higher paid people that are being let go by Pharma under the argument of cutting expenses.

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46. wathcer on February 13, 2014 5:57 PM writes...

Wile, #4: I also have experienced the assumptions & insult of what must be done in preclin. When it all goes ahead without anyone complaining, then it's perceived as easy & mindless, until there's an issue----and then all hell breaks loose.

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47. Anonymous on February 13, 2014 6:09 PM writes...

@43 Hap: You can't pick winners, because you never have enough information (or enough resources to try everything). Therefore all you can do is keep weeding out the losers as quickly and as cost effectively as possible, so that you have more cash to continue testing what's left (hopefully something that is more likely to succeed).

It's like recruiting people: You can't hire everyone, and you can't spend forever interviewing everyone, you have to weed out a lot of low quality CVs, weed out more candidates with telephone interviews, and more with face-to-face interviews, and then you just hope the person you're left with is the most likely to work out for the company. Selecting drug candidates is no different, it's a process of elimination and attrition, while investing in more information on fewer remaining candidates to make better quality decisions.

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48. Lyle Langley on February 13, 2014 6:22 PM writes...

@42..

Spoken like a true manager that is getting rewarded for these measures. Yes, all drug discovery is as black and white as x = y then y = x, it really is that simple. If what your trying to do is kill projects, then all you will do is killprojects. Please show me how this strategy has helped the success rate? That should be a black and white measure, correct? NRDD just had a review of success rates and I don't remember a huge improvement, but I could be wrong. It's really helped neuroscience as well. Either the fail early and cheaply strategy improves success or it doesn't. Drug discovery is not black and white.

@41...
And sometimes "good" looking drug fails as well, it helps to let good science drive programs and not bean counters.

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49. Anonymous on February 13, 2014 6:33 PM writes...

@47: I didn't say drug discovery is black and white, but, for example, if a drug is toxic to the liver, it is toxic to the liver. Period. So kill it fast, and move on.

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50. Anonymous on February 13, 2014 6:41 PM writes...

PS. Actually MOST good-looking drugs fail, but very few bad-looking drugs succeed, which is exactly why we have to be ruthless!

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51. Lyle Langley on February 13, 2014 6:54 PM writes...

Ruthless? Now I know you're a manager that gets a bonus for killing projects/compounds. Lets be "ruthless" when it comes to systems we know very little about. Yes, sign me up. Lets not do the best science and assays at our disposal to de-risk a project, lets just be "ruthless" and kill it because it makes my numbers look good. Still hoping you can show how this has positively impacted the success rates.

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52. Anonymous on February 13, 2014 6:56 PM writes...

PPS. And just to add my bean counter perspective (although I also started and ran my own drug discovery company, FYI):

Let's say we take your "kind" approach and complete full development of every preclinical drug candidate, of which statistically only 5% get approved. We would need to spend at least $500 million / 5% = $10 billion to get 1 drug approved on average, of which 75% tend to fail commercially even after approval. So we would actually need to spend $40 billion to get one successful drug product. So how likely do you think it is we will make more than $40 billion in pure profit from the drug just to recover that investment? Maybe only 1-2% of drugs ever make that kind of profit.

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53. An Old chemist on February 13, 2014 7:05 PM writes...

Derek Lowe, you have never been laid off and have worked at a few big companies. Now, do you want to give us your personal views on the subject?

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54. Anonymous on February 13, 2014 7:09 PM writes...

And PPPS. At least (despite my PhD and 20 years in drug R&D) I recognize and accept that I don't understand most biological systems. The problem is you think you understand it all, but then how many successful drugs did you discover? Out of how many failures?

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55. Nick K on February 13, 2014 7:21 PM writes...

#52: I believe DL got laid off from Schering Plough some years ago.

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56. Anonymous on February 13, 2014 7:32 PM writes...

@50: Success rates are declining because you're making worse compounds.

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57. Anonzymous on February 13, 2014 8:25 PM writes...

#54: Bayer

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58. Derek Lowe on February 13, 2014 8:47 PM writes...

#53, Old Chemist - I have indeed been through a large layoff, hundreds of people at a time. I've sat around at home waiting for the phone to ring and checking my e-mail, taking a break to slip into the library at the local college and catch up with the chemistry journals that I couldn't afford to read. I've been there.

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59. Anonymous BMS Researcher on February 13, 2014 9:16 PM writes...

@53: even those of us who have not been laid off have more than once awaited news of who would get cut in this round, then felt a strange mix of relief (at surviving) and regret (saying farewell to people with whom I worked for over a decade).

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60. Lyle Langley on February 13, 2014 9:32 PM writes...

@52, 54 Anon...

Of course, how can I have ever doubted you with those kinds of credentials. And, thanks for putting words in my mouth also, since you are ever so wise, it sounded better coming from you, from me.

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61. watcher on February 13, 2014 11:36 PM writes...

#50: "MOST good-looking drugs fail, but very few bad-looking drugs succeed".....sounds like they both are the same when good looking drugs seldom succeed and bad-looking drugs almost always fail. What an amazing insight.

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62. Cellbio on February 13, 2014 11:39 PM writes...

To join the sidebar conversation....The fail fast strategy was a complete disaster. Risk averse executives trashed failures as if they were evidence of lack of talent by those that set the course, the great unwashed researchers. Middle managers with a penchant for simple finance ran numbers about how many programs it would take if some fail commercially, 50% fail in Ph3, etc etc, pointing out all we had to do was start 500 screening projects and dutifully cut loose the ones that were "failing early". Then teams of scientists that are normally skeptical were rewarded for sitting in team meetings and finding reasons why things might not go well (not sure PK supports once day, selectivity is OK but we could do better, no tox at all in female rats, but males had an issue at 1000x exposure). Bonuses paid handsomely to circle around in preclinical land without ever taking a risk and moving forward. Sure you don't ignore patently clear problems, but absolute clarity is rare and not the scenario from which one builds a strategy.

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63. Anonymous on February 14, 2014 1:57 AM writes...

@61: Yes, but even more bad-looking drugs fail than good-looking ones, obviously. Did I really need to spell that out???

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64. Bernard Munos on February 14, 2014 6:57 AM writes...

John Lechleiter's Forbes blog post is unworthy of Lilly. I hope he reads this thread and ponders the loss of intellectual vitality at Lilly. The company's misfortunes are not just bad luck, as it often alleges, but the result of the rise of mediocrity fostered by the platitudes and double-speak that his blog sadly exemplifies.

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65. Anonymous on February 14, 2014 9:25 AM writes...

"John Lechleiter's Forbes blog post is unworthy of Lilly. I hope he reads this thread and ..."

And what, get in touch with reality? You must be joking: It's much easier to bury your head in the sand and invent your own reality!

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66. Hap on February 14, 2014 9:57 AM writes...

I wonder how the policies he advocates even pass the smell test. He wants lots of people to study science and engineering (lots of time and money) but then wants to get a lot of people from elsewhere to do the same thing, so that the job uncertainty for careers using that education increases and the pay decreases. (Of course, as his career and those of lots of others say, the money isn't in STEM, as one could see by seeing who actually is paid by companies.)

And, of course, he wants business taxes to be lower, and money to be more easily moved to and from elsewhere - but that means that 1) jobs are more likely to be made elsewhere where labor is cheap and the money can be sent back and forth more easily, and 2) all of the training and education and infrastructure that businesses need has to be paid by someone, so if it's not businesses, then someone else is paying, and it has to be individuals. Either people will lose money they had in benefits to pay for reduced taxes or someone will pay more in tax to replace the money, and in either case, there's less money for people in your biggest market (others are growing, but Europe has its problems, and China doesn't have enough wealthy people yet) to buy your things.

How does this work again?

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67. Anon on February 14, 2014 10:25 AM writes...

@66 Hap
It's the prisoner's dilemma. For Lilly, it's best if every other company (across the economy) employs people in high-paying north american jobs, who will consequently be able to afford Lilly's drugs and support the country's infrastructure. At the same time, it's best for Lilly's employees to be outsourced or have their north american wages suppressed by oversupply of labour.

Of course, in the prisoner's dilemma you usually have every prisoner (in this case company) trying to do the same short-sighted thing, leading to overall ruin. I have a question: Once the companies have succeeded in normalizing north american wages to the rest of the world, will living costs also come down? Will the minimum wage salary we are offered be sufficient for rent, groceries, visits to the dentist, retirement savings, etc.?

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68. PJ Hansen on February 14, 2014 10:36 AM writes...

As to Derek's question "..why is Lechleiter going around saying that he's in favor of apple pie, over and over and over?" I have been pondering that for a while as it is all so illogical and hypocritical. Adoption of all his recommendations will have no impact on Lilly's success or survival.
My conclusion is that his comments have nothing to do with the pharma industry or reality at all. I'd bet he is looking for a future in politics, post Lilly. With this STEM/tax/immigration theme he has been building a national reputation outside pharma, all while sounding positive, wholesome, and business friendly. Any takers?

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69. Lyle Langley on February 14, 2014 10:54 AM writes...

@62, Cellbio...

Yep. You are describing the favorite "shots on goal" mantra that accompanied the "fail early" concept. The problem is (keeping the analogy going) is you are always taking shots from your own defensive end because you never let the puck get past the center line. Not many shots get through from the defensive (pre-clinical) end.

But, again, what do we know? @63, Anonymous has a Ph.D. AND 20 years experience! That is so rare on this website. He/She is the Dr. Science on this site, why you ask? Because he knows more than you do!

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70. Anon on February 14, 2014 12:05 PM writes...

FYI, Dan Rather did a mini report on this:
www.axs.tv/news-and-docs/phdont-march-5-2013/

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71. Dr. Manhattan on February 14, 2014 12:26 PM writes...

""...They've reduced headcount in every way you can imagine short of launching people into space."

Thanks for getting me to laugh out loud."

Hey, how about we "volunteer" Lechleiter for a shot into space with the new Orbital Sciences "Cygnus" spacecraft. That's the one without the heat shield...

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72. Kokomo on February 14, 2014 12:37 PM writes...

@71 - Yes; it could even be part of the "Voluntary Exit Program" that is going on at Lilly right now. uniquely timed to align with Lechliter's op-ed piece in Forbes, it seems!

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73. Emjeff on February 14, 2014 3:22 PM writes...

# 29 is right on the money. STEM education is one of those issues, like being against texting while driving or anti-smoking, that politicians and corporate types haul out in lieu of real issues, like tax reform, immigration and government spending. We don't address the real issues because they are complex and solving them will require some sacrifice. Better to sit on our couches, eat Cheetos and watch reality TV, rather than think about the real issues facing this country.

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74. Lu on February 14, 2014 3:37 PM writes...

Lechleiter words are so outrageous that I don't know why people are not rioting on the streets over this.
Lilly's headquarter is in Indianapolis. Do they have offices around Boston or in New Jersey? I would love to picket those.

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75. Anonymous on February 14, 2014 4:19 PM writes...

67: I think that's the Bizness Kummunity's answer to the problem of "restoring the global competitiveness of the American labor force": keep cutting back wages and working conditions, trending toward "Third World" parity.

When it becomes acceptable to pay American workers $1/day and lock the doors to keep them from taking too many bathroom breaks, there won't be such a perceived incentive to outsource. (Of course that means that we will have to start tolerating repeats of the "Triangle Shirtwaist Company" disaster domestically again, instead of outsourcing the building collapses and fires to Pakistan and Bangladesh...)

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76. Max Yasgar on February 14, 2014 9:45 PM writes...

Isn't he a chemist by training?

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77. Rock on February 14, 2014 11:01 PM writes...

12,000 Jobs lost at Lilly? A lot, but nowhere near the king of layoffs, Pfizer. Hard to keep track, but my best estimate is somewhere between 100,000 and 120,000 jobs lost. Enough to fill a good-sized city.

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78. Nicholas on February 15, 2014 2:12 AM writes...

Keep posting such splendid posts. It was great to through it.

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79. Anonymous on February 15, 2014 6:10 AM writes...

I hope that one day, all those people laid off from big pharma will go on to develop great new drugs in their own start-ups, and when big pharma waves their big cash at them, they say, "sure, you can license our drug, but only if the CEO is fired without any golden parachute". Let's see who the big pharma investors are willing to back.

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80. Chemjobber on February 15, 2014 6:59 AM writes...

76: Yep, Harvard Ph.D. (from Wender, did not know that.), started at the bench in process R&D at Lilly.

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81. N-D-No on February 15, 2014 8:54 AM writes...

80: In Ag chemicals (before LLY divested that business) - not a process chemist in human pharmaceuticals

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82. Secondaire on February 15, 2014 11:27 AM writes...

My SO is a MS-level medicinal chemist who has been unable to find any work to pay off the massive student loans he accrued, and now he manages a Pizza Hut second/third shift for $10/h. He would do just about anything short of performing hits for the mafia to work as a medicinal chemist again.

Hearing this clown talk is making me crack my knuckles in uncharted aggression.

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83. Chemjobber on February 15, 2014 1:04 PM writes...

81: Thank you, I did not know that (and he does not tend to divulge that in his interviews.)

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84. Spannerman on February 17, 2014 3:54 AM writes...

In a market economy, isnt a shortage mitigated by an increase in price and hence supply? Simple answer then, pay more and they will come...
Perhaps he skipped the market economics class at MBA school?

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85. Hap on February 17, 2014 9:37 AM writes...

No, that only works for a shortage of supply (when someone else has to pay more). When it's a shortage of labor (when large companies have to pay more), it's a "market failure" that must be fixed by government intervention.

If there weren't enough people to do something, and the training time were long, raising wages wouldn't get more people in a timespan to solve the shortage. Of course, if the same employers offered money (to recruit trainees and trained people) and training, they might - but they want to provide neither of those things. It's much easier for them to devise solutions that don't involve them paying or training anyone.

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