Wednesday, April 8, 2009

Another Sign of Big Pharma’s Demise?

I couldn’t let this one go by. Andrew Jack wrote an article in the February 6, 2009 edition of the Financial Times about how scientists don’t lead pharmaceutical companies anymore. Andrew pointed out that only Lilly’s (NYSE: LLY) CEO, John Lechleiter, had trained as a scientist. He did note that Daniel Vasella, Novartis’ (NYSE: NVS) CEO had been a doctor.

Now, am I the only one who’s drawing a connection between the dwindling pipelines of large pharmaceutical companies? After all, what are professional managers all about? Optimal solutions. Squeeze every cent out of everything that you’ve got and don’t a cent anywhere else unless you have to. Doesn’t lend itself to developing many new drugs does it?

Remember Jack Welch? Hopefully, it hasn’t been that long. And, while I’m not a complete fan of the man, give the devil his due, he knew how to get results. Anyone care to remember Jack’s academic background? A doctorate in chemical engineering from the University of Illinois. Doesn’t sound very sexy does it? But, Jack sure got his money’s worth when he rose to head GE Plastics and made his career there. The rest is history as they say.

I believe that there are two things at work here. First, only scientists can truly appreciate pure research and development and understand what can be done. Next, only scientists can understand the values that pure science can bring to society. This is my opinion, I have no empirical data to back this up. If anyone from the Harvard Business School is reading this, they’re cringing. Now, I know what everyone is saying, Guy’s a Marxist. He’s going soft on capitalism. But, wait, just hear me out.

Anyone remember Bell Labs? When it was a true scientific establishment and developed things like lasers and transistors? Or, how about when Big Auto was run by engineers and designers and hung around with manufacturing types? Bill Gates was a college drop out. (OK, it was from Harvard, but, you get my point.)

The Industrial Revolution wasn’t started by a bunch of quant’s from business schools. They didn’t even graduate from high school! Some were even home schooled! It was all about a bunch of guys, sorry ladies, this was a long time ago, who saw that things could be done better and did something about it.

OK, the baton had to be passed. Even Edison could only go so far without calculus. Pure science and research was made possible funded by the early successes. Somewhere along the way, we lost our way. No one solves problems anymore, no one stretches, and, that’s why Big Pharma will follow Big Auto onto the dustbin of history. (With apologies to Trotsky.)

As always, we welcome your feedback. Please contact us at We look forward to hearing from you.

Contributed by Guy de Lastin

1 comment:

Anonymous said...

I believe that even a non scientist is aware of the importance of research and development in a pharmaceutical company. A person leading pharmaceutical company, even a non-scientist, will not cut on RnD spend or neglect aligning RnD to current health care needs. How different would it be for the company if a scientist leads it?
While we are talking of RnD, could you share your views on the acquisition mode that companies have chosen to bring new drugs in there portfolio. Do you think companies are concentrating more on buying smaller biotech or drug developers rather than develop own drugs? Is it necessary for the company to have own drugs or can it safely flourish by buying other smaller RnD based companies?