Pharmaceutical productivity is down, partly because of the industry’s own inefficiencies, according to Robert Ruffolo, Ph.D., president, R&D, Wyeth Pharmaceuticals (www.wyeth.com), who spoke at the recent "Scrip R&D Productivity Summit" in London.
The productivity issue is a serious concern to professionals in the biotech and pharmaceutical industries and is a recurring theme at key industry meetings (see review of MipTec meeting, GEN, June 15, p. 1).
R&D productivity at the Scrip summit was defined by the majority of speakers as the number of NDAs approved relative to the cost of developing them. Dr. Ruffolo cited a number of reasons that this has been in decline for the past 10 years, among them poor management of R&D and clinical development.
Some speakers pointed out that R&D operations in big pharma have been inefficient in the past decade because the companies are often just too big to be controlled. Peter Joshua, vp and general manager, CMR International (www.cmr.org; recently acquired by Thomson), a provider of R&D performance metrics, presented data from 2004 comparing major pharmas with medium-sized drug firms. His study showed major companies spent, on average, $250 million on their clinical development and used 150 staff to bring a drug to market, whereas their smaller counterparts utilized 100 people and invested $200 million on clinical development to get theirs approved.
John Gibson, M.D., senior vp, global development at the specialist pharmaceutical firm Allergan (www.allergan.com), noted that "one of the problems is that big pharma is too big, and this presents too many leadership challenges. There are not enough people with the requisite skills to lead companies of that size and to put in place the correct business strategy."
Other speakers agreed with Gibson about company size. "In small biotechs and pharmas everyone knows each other and there is a greater sense of ownership of drug development projects. Key decisions are made rapidly, so productivity is bound to be higher," adds Mark Levick, M.D., Ph.D., vp, clinical pharmacology and discovery medicine biopharmaceutical CEDD at GlaxoSmithKline (www.gsk.com).
Dr. Ruffolo went one stage further and stated that mergers and acquisitions to make huge organizations have contributed more than many companies are willing to admit to slowing R&D productivity. He backed this claim with data from a Cambridge Healthtech study which showed that three years post merger R&D productivity is reduced by almost 50%. It is not difficult to see why.
"After our mergers we had over 1,000 standard operating procedures or working practices, which we worked hard to whittle down to less than 50 today," said Eliot Forster, Ph.D., vp development at Pfizer (www.pfizer.com). "You have to do this kind of thing, but if it is not addressed swiftly it can impact on other aspects of R&D."
"Suddenly having so many sites across different time zones can cause unforeseen problems too. For example, we found that every time the server was switched off in New York to do data transfer, our researchers in Mumbai could not work for two hours because their computers were down."
If you add all these examples of simple inefficiency together it is no great surprise that large pharmas are experiencing a productivity lag.