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A Scientist's Take on Glaxo's Restructuring

Chances are good that if you're a drug-industry scientist, you already know Derek Lowe's blog In the Pipeline, which often as not focuses on the complexities of chemical synthesis and research management. Even though he works at a lab bench, Lowe also has an excellent sense of what makes pharmaceutical behemoths tick from a business perspective, and offers up an insider perspective that's still exceptionally rare in this industry.

In the PipelineSo I'd like to highlight Lowe's recent series of posts on GlaxoSmithKline's convulsive restructuring, in which the drug giant laid off as much as 40 percent of its research staff in some locations as a result of the fallout over the company's troubled diabetes drug Avandia. Last week, Lowe offered the following observations as the axe fell.

On how research teams -- and companies as a whole -- see themselves versus competitors:

[O]n a company-wide level, it's hard not to think of everyone else as being at least a little more competent than your own shop is. That's because you see the inevitable bozo mistakes of your own workplace up close, whereas you don't get such good seats for the ones happening elsewhere. And the side that all drug companies show to their competition is a bristling pile of patents and confident press releases about their mighty drug pipelines. You know, looking at your own company's public face, how much of it is real and how much is bravado or wishful thinking. But it's hard to keep in mind that the same goes for everyone else, too.
On the implications of Glaxo's declaration that it will turn elsewhere for new drug ideas:
Doesn't a statement that you're going to emphasize external research rather than internal stand as an indictment of upper management? After all, who set the priorities and funded the programs? They surely won't let individual project leaders or area heads explain lack of progress as "just one of those things, you know how it goes", so how to explain what is apparently a catastrophic lack of progress across the board? And what does this say about the whole "Centers of Excellence" framework for drug discovery, erected some years ago at great cost of time and money?
And on how Glaxo may well have a point about research productivity:
What I'm about to say feels strange to me, because I'm a scientist through-and-through, and I've done my share of complaining about ridiculous business attitudes. For that matter, I've found myself laid off though what I thought was a mistaken site closure. But all that said, there's a case to be made that GSK partly got themselves into this fix by letting the scientists free to do science. That's how I see, for example, the huge effort the company had for years in nuclear receptors. A massive amount of fundamental work was done, but (because it's such a horrendously difficult area) little or nothing ever came out the far end to make anyone any money. I'm willing to be corrected on those points, but that's how I see it now.

And it's not like the company's productivity has been one of the wonders of the world overall. One correspondent, an ex-GSK researcher, pointed out to me in an e-mail that one of the sites hit hard this week had taken one drug to market in twenty-five years. Some of that is surely bad luck, but that explanation can only take you so far.

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