I pose the headline question in response to several items I read regarding R&D productivity today. Namely, the Herper piece in Forbes about the amount in now costs to get a drug to market. And Timmerman's piece in Xconomy about the GSK proposed idea of paying BIG bonuses to scientists (and teams) who come up with BIG discoveries resulting in new approved drugs.
The Herper piece outlines the problem, namely drug productivity over the past decade is horrendous and unsustainable. It just backs this observation with a whole lot of data and facts. The Timmerman piece discusses why the concept of paying big bonuses for performance won't work. The list includes the difficulty of assigning who should get credit in big, long-term projects like drug development. Reward the wrong people and what have you achieved in promoting "good behavior"? It doesn't help if rewards look political. Jealously can easily rear its head if the wrong people are rewarded as well.
Money is not everyone's motivator. Those folks might respond to some more altruistic motivators like recognition, feeling of accomplishment for doing something meaningful, and working in a stimulating environment to name a few motivations -- that might be a whole lot more effectivel for this type of person. For those who are heavily motivated by money (and nearly everyone is motivated by money to some degree), one can get unintended consequences if that becomes overriding. Will people begin to withhold information? Will that stymie teamwork? Will projects be pushed ahead that should stop on the off chance that a miracle result can happen to make the drug approvable? The goal is not to load up the pipeline with a slew of risky projects with even worse returns. All of the above an more could be possible downsides. Read the piece for the entire discussion.
Also published today in Fierce Biotech was a report on the companies that grew the fastest or contracted the fastest in the past 5-6 years. This list was interesting to me as the companies on the fastest growing list generally had a better record than the really really big companies on the fastest cutting list in terms of costs per drug brought to market for the last decade. BMS was interesting on this list as it had one of the lowest cost records, but also was te fastest cutting company. It was the only one that looked like that in the top 40 (really 37) companies.
That led me to speculate if the measure of success might hinge more on optimizing the size of your staff (your costs) relative to the number of projects that you were pursuing. Given that hypothesis, some of the fastest growing companies may (I emphasize may) have overshot the mark with growth. And on the other hand, some of the fastest cutters haven't cut fast enough and are still bloated. These folks may have to get after it. Not the most pleasing message perhaps but one that might need to be examined more closely.
Posted by Bruce Lehr Aug 12th 2013.