According to an article in the March 27, 2006 edition of the Wall Street Journal (“Bureaucracy Buster? Glaxo Lets Scientists Choose Its New Drugs“), large pharmaceutical companies like GSK are experimenting with new ways to organize their research teams:

Mr. Garnier [Jean-Pierre Garnier, CEO] and Tachi Yamada, Glaxo’s head of research and development, decided to try a different approach to the problem [of drug development]: giving scientists a vested interest in a single drug’s success. To do this, they split middle-stage researchers into seven separate pods of up to 400 people, each concentrating on a specific disease grouping, such as cancer, psychiatry and respiratory and inflammatory diseases.

Some experts contend this will bring back the golden era of big pharma before it became so bloated by mergers and acquisitions:

“Taking [decision-making] out of corporate hands and putting it in scientists’ hands allowed them to go back to the way it was in the ’60s and ’70s, when it was mostly a science-driven process and CEOs were scientists,” says Kenneth Kaitin, director of the Center for the Study of Drug Development at Tufts University in Boston. [as quoted in WSJ]

However, I find it difficult to believe that corporate (ie, marketing and sales) influence will be much diminished by this type of re-organization. In fact, this type of therapeutic, pod structure is very similar to the type of organization suited to sales and marketing. In sales, for example, reps selling drugs in a specific therapeutic category often act in pod-like concert to detail physicians. Marketing is also organized within therapeutic silos.

Consequently, this new type of research organization lends itself very nicely to influence by sales and marketing — not that there’s anything wrong with that. However, it does not guarantee that big drug companies will relive their golden era as anticipated by Mr. Kaitin. Innovative products are not always the best-selling products.

The idea is to make pharmaceutical companies operate more like biotech companies, which are truly science-driven and more tolerant of researcher freedom. Biotech companies enjoy this “freedom” not only because they are run by scientist CEOs, but also because they don’t have big marketing and sales departments with vested interests (such as commissions based on sales) that are not necessarily aligned with the interests of science and medicine. Despite the WSJ article title, I don’t see scientists really having the last say on what drugs reach the market or even what drugs reach the final stages of development.

Big Pharma wants to be like biotech (more research) and Biotech wants to be like big pharma (more marketing)!

It’s interesting that as big pharma is trying to be more innovative research-wise and be more like biotech, biotech companies are being urged to be more marketing-savvy like big pharma and do DTC advertising, for example (see “From oligos to Oprah—the consumer and biotech“). See below for more on that subject!

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  • Counterpoint: biotech needs more than DTC as usual — There is no doubt that in the coming years, biotech companies will need marketing expertise to complement their R&D prowess to be successful in the marketplace. Many experts believe that biotech should follow in the footsteps of traditional pharmaceutical companies and adopt direct-to-consumer (DTC) advertising to promote their products to meet this challenge. What is good for pharma, however, is not necessarily good for biotech — particularly with respect to DTC TV ads.
  • Pharma’s Jekyll & Hyde — Sir McKillop, former CEO of AstraZeneca, was spotted recently in a pub nursing a pint of bitter and conversing about the bad rep of the pharma industry. He characterized a successful big pharma company as an embodiment of the Goldilock story — “large enough for marketing clout but not so big that drug discovery and development can’t be managed effectively.” It’s not Goldilocks and The Three Bears that comes to mind when I think of Big Pharma. Robert Louis Stevenson’s story of Dr. Jekyll and Mr. Hyde is more appropriate.
  • Vagelos Speaks. Will Pharma Listen? — Roy Vagelos, Former Chairman and CEO of Merck, gave a keynote presentation at the Pharmaceutical Marketing Congress in Philadelphia this past Tuesday. His presentation was entitled “Medicine, Science, and Merck: The Changing Pharmaceutical Industry.” Vagelos began his career as a physician and medical researcher. At Merck, he was also head of research before being “promoted” to CEO. Dr. Vagelos made many interesting points about science, credibility, pricing, and the future of the pharmaceutical industry.