Tanuja Koppal, PhD Editor in Chief

Ever seen people gulping down diet soda after devouring a large order of onion rings? Seems a little strange but that’s analogous to what pharmaceutical companies seem to be doing these days. They first grow in size by merging or acquiring smaller companies and then try to trim down the fat and get into shape to combat the inefficiencies brought on by the expansion.

Although mergers promise a quick access to larger, juicier drug pipelines, redundancies abound, inefficiencies increase, and cultures clash. It’s well known that when companies merge productivity levels drop and numbers are a strong testament to this fact. While mergers and acquisitions have skyrocketed over the years, the number of drug approvals has dropped, development times have increased, and R&D spending has gone up dramatically. Hence, soon after a merger, companies often have to spend a lot of money, time, and effort to reduce the inefficiencies and regain productivity.

At a recent Cambridge Healthtech Institute pharmaceutical leadership conference, Robert Ruffolo, PhD, president of R&D at Wyeth Pharmaceuticals, emphatically stated that companies don’t merge for fun and that they almost always are forced to do so to uphold shareholder expectations. But, if mergers never seem to succeed in meeting those expectations, then are they a valid option for beefing up a drug pipeline?

At same meeting I had the opportunity to chair a session on leveraging technology, informatics, and internal resources to improve pharmaceutical R&D productivity. I found it interesting that many companies, both small and large, were now investing in resources that would first help them identify and implement changes within the organization. For instance, TAP Pharmaceuticals has a quality performance management group in place that ensures that resources and projects are well-aligned and that performances matrices are in place. Pfizer has set up a program for attrition management that looks into why a drug failed to avoid a repeat of the same mistakes. We reported last year (February 2004) on some drastic changes that Wyeth had made to its discovery organization, which it is now implementing on the development and clinical side. Similarly, the cover story this month by Senior Editor Patrick McGee offers insight into how Bristol-Myers Squibb has increased the number of drug candidates entering the clinic by implementing changes to its workflow.

But why is it that, like most people, most companies do not think about getting lean until they get fat? But then again it’s the people who make a company. All changes to the process and portfolio mean nothing unless “lean thinking” is embraced by people and becomes a way of life. In an R&D environment where scientists thrive on creativity and independence I wonder how successful these companies will be in bringing about that fundamental change in thinking.