Hey, Hillary Episode 1: Your biggest donors are hurting us

Google Pittsburgh in Bakery Square, East Liberty.

This is the first in a series as I try to catch Hillary up to what has happened in the last 7 years.

Back when she suspended her campaign in 2008, I thought her presidential hopes were finished. 2008 was her best year in terms of what she might have accomplished. After the financial collapse, there was an opportunity for a disciplined and knowledgeable president to force rehab on the malefactors of great wealth. Well, that didn’t happen. Instead, the malefactors recruited someone more pliable and easily dismissed. I’ll never forget the passages in Ron Suskind’s book, Confidence Men,  where he recounts the meetings Obama had with Tim Geithner, Larry Summers and Christy Romer. Obama would make an executive decision and Geithner would essentially blow him off and nothing would get done.

Anyway, what I could see happening after Obama won is that the bad deals on the financial clean-up and healthcare reform would get concretized. The changes to the workforce brought on by the massive layoffs and restructurings would lead to a different kind, but by no means better, kind of work environment for working people. And that’s pretty much what’s happened. Now, you could say that she’s working with what she’s got and I agree. In these circumstances, given what she’s got to work with, her policies are going to have to be more modest than the opportunities that might have presented themselves in 2008 would have created.

But if all you’re planning to do as president is tweak what is a sucky situation and slightly improve the status quo, then what’s the point of running? No, seriously. Wouldn’t that just make you Babysitter in Charge instead of a president? Oh, sure, Hillary would be a great babysitter, one of the best. No one is going to complain about her protecting us. By the way, that doesn’t mean she is a “hawk”, whatever that means. There are shades of gray. You don’t have to be one thing or the other. And she’ll probably be really good on infrastructure projects, especially broadband. That right there would be a not insignificant legacy. However, for working people who have been so busy trying to keep their heads above water that they are only now realizing how far out to see they have been dragged in terms of work security and income stability, that’s not going to be enough.

Hillary, you need to talk to your donors. Because right now, they can do whatever stupid shareholder value, McKinsey generated idea that pops into their heads and it’s going to hurt them. It is time that someone sat them down and told them that just because they are hiring people in India, or bugging out of NJ and we all need to adjust, doesn’t mean they’re going to save money in the end. In fact, they could be making their problems much, much worse.

Let’s take the latest examples of really stupid ideas in big pharma. It’s now more like, little disconnected, distributed pharma in a  very expensive part of the country. One of the latest Nature Alerts featured an article about the shortage of space in the Boston biotech belt and that the price of land in Cambridge Massachusetts is too expensive for new startups. In short, there’s very little land but big companies keep firing their R&D staff in Connecticut and New Jersey to relocate there. Now, the little start up companies to which we are all told we will find our pot of gold can no longer afford the cost of business there.

And we haven’t heard yet from the hapless souls who manage to get an invitation to work in Cambridge. Go read Derek Lowe’s comment sections on the latest relocation scheme to Cambridge of the virology division of BMS from Wallingford, CT. First, it should be noted that the business people are mostly keeping their jobs and relocating to a different site in CT. But by our calculations, the R&D staff is facing almost a 50% cut in personnel and the “lucky” ones will be relocated to… you guessed it. Cambridge. There’s a lot of anger and bitterness there. Housing prices are astronomical unless you live far from the city. If you live far from the city, your commute is long. Then there is the uprooting of families and finding new schools. Then, when they get there, there’s no guarantee that the job will be available for long. They will be expected to be ready to jump to a new job every couple of years.

And for what? What in God’s green earth would make all these companies decide that it HAS to be Cambridge or they aren’t truly living??

We have no f^&*ing idea.

Harvard is there and so is MIT. Ok, fine. But it’s not like there’s going to be a smorgasbord of people trading industry shattering techniques. Hell no. We all have secrecy agreements. You can’t just talk about what you’re doing over sushi with people from other companies or academic groups. Even 15 years ago the ACS meetings were becoming less and less useful and informative because presentations contained almost no relevant information, structures or data. It’s all protected by lawyers. So, the idea that Cambridge is some kind of hot bed of new open source learnings is just stupid. Do not let them tell you otherwise.

It’s not even like you even have to BE in Cambridge if by some weird chance you can actually share information. The internet makes location irrelevant. In fact, some of these companies farm out so much of their work to other companies that there’s no need for them to be in the same place geographically. Hey, if they want to break up their infinitely configurable corporate lab space and inefficiently run their research by having lab rats negotiate contracts with outside companies, complete with secrecy agreements so that they can become lightweight organizations free from the constraints of employees to whom they are obligated, let them do it and waste their money and talent. But in that case, they’d be saving a lot of money by relocating to Detroit.

And while we’re at it, why is it that the R&D people are the ones that have to make all the sacrifices? Why can’t an MBA who is after all just a bean counter live in a rust belt city? Aren’t they costing valuable office space for the shareholders if they’re located in Cambridge? I mean, if the almighty dollar is the reason why we are reconfiguring pharma, shouldn’t we eliminate the costs of things that don’t actually contribute to the discovery of drugs? If I were a shareholder, I’d want to know why the cubes have to be in an expensive high rise facing the Charles River. It’s not like an accountant or marketing person will have any reason to hob nob with the PhD superstars at Harvard so why are they there? Can’t we find plenty of English speaking MBAs in Hyderabad?

Speaking of rust belt cities, Pittsburgh, for example, offers a lot of culture and plenty of affordable housing for working people. We are not located in East Jabip, most people have all their teeth and this city has one of the most literate populations in the country thanks to Andrew Carnegie’s magnificent libraries. This is a great place to live and work with public transportation, a thriving university center with Carnegie Mellon and the University of Pittsburgh at the center. There’s plenty to do here from an outdoor perspective and free jazz every Tuesday in Katz Plaza downtown. And we have internet. We even have our own Google headquarters. Why Cambridge? Or why not Cincinnati? I only ask.

But nooooo. They’re all going to squeeze themselves into a shoebox or run themselves off a cliff like lemmings. In the process, they’re uprooting a lot of scientists or just plain ruining their careers, and setting back drug discovery by decades. Somewhere on Derek’s comments section a commenter noted that drug discovery requires Leonardos not Mozarts. That’s because it takes a very long time to learn to be a drug hunter. There are software moguls who think they can speed it up by applying something like Agile principles and maybe they can have a minor effect on the middle layer of research. That is, the layer between routine analysis and project team level collaboration. There is a sweet spot consisting of protein groups and crystallography groups that might be amenable to that kind of intervention. But, in most cases, they’re already there. They’ve figured it out and work as a team and they don’t need no stinking software guy telling them how to do it.

The rest of the time, research just needs to grind through it, one cell assay at a time. It’s aggravating to the shareholders who have the attention span of a newt. Ok fine, Ditch the shareholders. No, seriously, they don’t seem to have any appreciation for this stuff. Outsourcing doesn’t make the process go faster, in fact it can cost money and time in the end. What looks like a sure fire way to cut costs and put money in the shareholders’ pockets just doesn’t in the end.

So, Hillary, the next time you meet with these guys, and they are almost always guys, ask them why they are doing what they’re doing. Does it really make sense from a business perspective? Is cutting R&D really the only thing these toadstools can think of doing to increase shareholder value? Aren’t there better ways to cut costs? Or is there a hierarchy of costs to cut that have nothing to do with actual productivity? Are these titans of industry deliberately overlooking the obvious in order to appeal to their MBA culture of smartness? What is the long term strategy or is there even a long term strategy? Is all this pain on the R&D side really necessary? And how does that result in new drugs? Is relocation to certain areas of the country really about costs and collaboration, or is it really about egos and classism? And ask to see the numbers. Tell them you’ll wait until they find them.

Someone needs to start asking these uncomfortable questions and getting straight answers. Because if you want to be the next president and champion for us, you’ve got to start getting the executive class to explain how their McKinsey generated restructurings actually work in the shareholders’ favor. I’m not seeing how it provides value over what we had when the industry was working through new technology but still producing blockbusters. Call me extremely skeptical.

Someone needs to start holding these people accountable for the havoc they are creating. If you’re not going to do it, don’t be surprised if the country doesn’t get all excited about your campaign. Do you really want to be another British Labour party politician?

Next week, does contracting everything out really work?

When I told you Research had left NJ, I wasn’t making it up

 

Hoffman-LaRoche Nutley, NJ- recently shuttered.

NPR ran a recent piece on the problem of ghost towns being left in the wake of the great pharma mergers and layoffs of the last 10 years.

The facility I worked at in Bridgewater, NJ closed in 2011.  I’m not sure they were able to find renters but the MBAs seemed to have a habit of overestimating what new tenants for labs space would be willing (or able) to pay.  The lab buildings I worked in were beautiful with lots of natural light but they were never full. The facility I worked at previously in Monmouth Junction, NJ was also abandoned for awhile but I had heard that there were some plans to lease it.  Or bulldoze it.  I can’t remember which.  I stand corrected.  Google maps says the site is “closed”.  That building was smaller and more contained.  It would have been perfect for a small biotech company on the rise.  It had a state of the art animal breeding facility and room for about 400 people. More than that makes it feel too cozy.

But as I wrote back in 2011, it is difficult to get funding for a startup.  The vulture capitalists like to see most of the work done before they commit their money.  Then there is the problem of finding money for equipment (this is cheaper due to the big pharmas auctioning off all their stuff), subscriptions to journals, buying expertise for robotic HTS assays, structural

The place where I spent the best years of my life

biology, specialized analytical chemistry and ADME analysis, and every other thing that a small biotech doesn’t have in its own arsenal.  A regular Joe researcher funding his own research will probably lose his house before the year is out.  So, he and his colleagues don’t have a whole lot of money to spend on lab space, which despite its abundance, is going to be expensive.

In the meantime, Big Pharma is counting on graduate students living on subsistence wages to pick up the slack on what are now reduced government grants.  It was hard enough to be a graduate student in Chemistry before the sequester.  Now, the money is much harder to come by.  For a person who may not get a decent paying job until he or she is almost 30, the prospects are bleak.

You can see Paul Krugman from here!

Funny how Paul Krugman doesn’t talk about this.  He’s living in the heart of what was Big Pharma territory and the desolation is hard to ignore.

Some of the lame excuses that Big Pharma gives for pulling out of NJ is that it’s too far from the City and the kids nowadays want to be right in the middle of some hot urban action, complete with expensive tiny apartments that they will have to share with roommates until they retire.  Also, Big Pharma has relocated to the coasts to be close to Harvard, MIT, Stanford and Scripps.  That’s so they can share ideas in the areas where genomics and molecular biology are king.  But this is utter bullshit.  For one thing, if you are working in Cambridge, MA or San Francisco, you are precluded from talking about your work with anyone.  There’s no sharing going on in the spirit of the Scientific Revolution of the 17th century.  It’s all proprietary and very hush, hush.  Your work won’t be published until the lawyers have taken out anything that’s remotely patentable.  It could be years before you can share your big breakthrough.

Plus, there is this new fangled device called the internet.  If I wanted to, I could use an online tool to order up a synthetic gene from California from the comfort of my backyard wisteria covered swing in Pittsburgh.  I can access thousands of journal articles, provided I had $33/electronic copy and could get over my impulse to strangle the ACS and Elsevier every time I had to do it.  I could attend meetings and conferences.  My work does not depend on my location.

And here’s one more reason why pulling out of NJ to go to Boston doesn’t make sense.  It’s fricking expensive.  If the MBAs were trying to save money, which is what they always claim is the reason for shuttering labs, why the hell would they relocate to some of the most expensive real estate in America??  Why not go back to the midwest where the mothballed labs are still cheap?  That’s where most of research was before the big mega mergers in the 90s brought everyone to the Northeast.  Cinncinnati, Kalamazoo, Ann Arbor all had thriving research communities before the business people decided to manage things.  Or even Pittsburgh.  This place is hopping lately, it’s urban, housing is cheap and there’s plenty of mass transit.

And this is where I think we come to the crux of the matter.  The relocation is about what the business people want.  They don’t want to be stuck in dowdy, suburban NJ with the high property taxes and they can’t think past the rust belt image of the midwest.  It’s not glamorous enough for the people who consider themselves the culture of smartness.  Smartness demands that it hang around other smart people.  Maybe if the business types rub shoulders with the supersmart MIT researchers, they won’t feel like they sold out their biology degrees to become finance wizards?  Projection of sorts?  I can only guess.

It’s also easier to jettison your workforce if you claim you HAVE to move to stay competitive.  Yep, just cut those hundreds of thousands of experienced STEM workers loose when they are in middle age and have family responsibilities.  Leave them stranded in NJ while their property values sink and they are stuck peddling themselves as consultants from one poverty stricken startup after another.

This is no way to treat the people who brought you Lipitor, Effexor and Allegra.  And, yet, this is the way it’s going.  Big Pharma sees its future as chronic illness specialists.  They will charge hundreds of thousands of dollars a year for a drug that some people can’t live without and will expect insurance companies to pay for them.  Think of it as sponge from some Nathan Brazil Well World novel. I know that a few of my friends are still making a living in companies that are focusing on orphan diseases and oncology but there’s something immoral about hooking up people to drugs you know they can’t live without with the goal of milking every dollar from them.  I realize that research is expensive but we didn’t use to be so mercenary about it.  Instead of solving the problem of out of control research costs, the new wizards of pharma finance have glommed onto cheap, dirty and unsustainable new ways to make money. Reduce your workforce to desperation, focus on the poor unfortunate chronically ill and ignore everyone else. This is the new business model.

And it is broken.

Another good reason not to work in Cambridge

It’s in lockdown mode right now while the terrorist suspects are being rounded up.  There are a lot of R&D facilities in Cambridge. Derek Lowe of In the Pipeline who works there just checked in with an update.

This is not the first time that R&D people were associated by location with terrorism activities.  In 2001, the pharma labs in central NJ had visits from the FBI when the anthrax letters made their way through the Princeton, Trenton and Rocky Hill post offices.

I’m sure it’s just an unhappy coincidence.

Stay safe, friends.