Pharmageddon continues

This time it’s Glaxo Smith Kline (GSK). You may remember that GSK was in the papers recently because it was one of the only big pharma companies with a potential vaccine for ebola. Well, now they’re cutting their R&D staff. According to the rumors flying over at In the Pipeline, the biggest cuts are going to happen at their research park in North Carolina.

How these things typically happen is the pharma in question just eliminates a whole research division or therapeutic area. Your job is not spared because you made your company a zillion dollars on the patent you sold to it for a dollar 10 years ago. I used to be in favor of this quid pro quo arrangement. You give me the means to do my research, I give you the fruit of my labor. But now, I’m not so sure. Like everything else, there are predators in the executive suites and on Wall Street who have zero appreciation for the amount of work it takes to create a new drug entity and plenty of people who think they own it. In some respects, researchers have only themselves to blame for not protecting their own interests, those being the need to earn a living in order to consume calories to sustain life and have a roof over their heads.

GSK’s cuts come on the heels of cuts at Astra-Zeneca, which decided to get rid of its antibiotics research unit. Yeah, try to figure that one out. And then there was Amgen that recently announced that it would cut up to 4000 jobs globally including at its research facility in Seattle. So, while the flood of layoffs in the US R&D industry has slowed down a bit since the high water mark of 2009-2010, it’s still not finished yet. After all, sooner or later, the industry will run out of people to lay off. But we’re still going to see pulses of carnage here and there, dumping more over-educated, over-qualified, experienced and talented chemists and biologists into the already saturated labor market. Fun, fun.

In other news, the left sometimes *almost* grasps what the problem is with pharmaceutical R&D but as soon as those of us who really know what’s going on turn our backs, we get more clueless BS from people like Dean Baker. Don’t get me wrong, I’d love to have him on my side. But he doesn’t seem to spend any time talking with people who have actually, you know, been there. There is something bizarrely automatic about the left’s misunderstanding of how drugs get invented and developed. Maybe this has something to do with the complexity of the process. Or maybe it’s just laziness.

Here’s the basic outline of the misunderstanding: The NIH, which we all pay for, does basic research. Then it collaborates with a big drug company and that big drug company turns around and sells that basic research for a ginormous profit. All the big company does is scales the sucker up, runs some admittedly expensive clinical trials, and then produces and markets the drug, delivered fresh and complete from the NIH labs, directly to you the consumer at an enormous markup.

There is just enough truth about the greed of the executive and finance movers and shakers to make this look plausible. Unfortunately, it is one of those beautiful theories easily destroyed by ugly facts.

I don’t want to go into this again because it will take at least several posts to unpack but the NIH rarely delivers a pristine drug to industry. No, the whole idea of basic research is that it is basic. That doesn’t mean it isn’t hard or not valuable. It means there is sometimes little more than a nugget of a something to follow up on. The “drugs” are sometimes nothing more than fragments or completely undruggable. (Undruggability is a whole different topic) Sometimes, there is no drug delivered to industry. Sometimes, it’s merely the suggestion that a specific protein target may or may not be involved in some undesirable endpoint.

The role of industry R&D is to take this very basic research and through many years of real, genuine, honest-to-god research, turn it into something resembling a drug. It is a very expensive process. I’m not surprised at the numbers being batted around. That is not to say that we can’t cut back on the amount of marketing that pharma does. At the end of the day, what is more valuable to you? The researchers that invent an ebola vaccine or the marketers that tell you why you need it? But to get real drugs from real research, a lot of money must be spent in order to pay for many trials and errors and reagents and lab equipment and researchers who need to be fed and housed.

That being said, it sure does look like there is a plan to exploit NIH and academic labs. If you get rid of all your R&D units in the name of shareholder value, or at least cripple them with endless, non-productive mergers and acquisitions and layoffs, you may end up without anything to market. And there are a lot of geeky students out there who are willing to work at subsistence wages to get a PhD. Why not use them as your new staff? That certainly looks like what is happening. It’s a bit of a self-fulfilling prophecy.

What is missing in the equation is the experienced R&D staff that will know “when to hold’em and when to fold ’em” when it comes to actually making the potential drugs. In other words, there will be a lot of reinventing of the wheel in academic labs as they sort through how to do it on limited soft money.

It’s a research strategy only a banker could love.

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One bright spot for the journal famished: Nature is experimenting with making its journal archive and current issue available as a free “read-only” version. That’s to circumvent the habit of some poor researchers who have to sneak around to satisfy their paper habit, a phenomenon known as “dark sharing”. You have to know someone who has inside access to a license, usually some friend who is still in industry or someone at a university. This is what we are reduced to: sharing illicit copies of nerdy papers like they’re banned versions of Tropic of Cancer. Read-only versions that you can’t save or refer to later is  better than nothing, I guess, though not quite as good as getting a subscription to Nature and Science for Christmas.

 

The problems with mergers

No nuts for you.

Tim Wu at the New Yorker wrote a piece about the all too predictable outcomes when United merged with Continental back in 2010.  There were sharp increases in fares in newly uncompetitive markets and a gradual decline in overall service.  I think the decline goes back even farther than that when United eliminated or sharply reduced pensions for flight crews and pilots back in the early naughties.  I remember distinctly the beaten down and depressed looks of the flight attendants on one of the flights I took from Philadelphia to Denver when I was on my way to a conference. When asked, the flight attendant made some remark to the effect that she had lost a lot in retirement benefits. It felt like we were hurtling towards Soviet era customer satisfaction with poorly compensated and indifferent flight attendants. Was this really what United wanted its customers to experience: a demoralized employee workforce, fewer services and a plethora of new fees, the profits from which were not going to the employee pension fund?

By the way, Tim, that ritualized abuse that you feel Americans are experiencing after the approved mergers of airlines and cable companies, for example?  I call it “exploitative profit mining”.

Then I saw that the New York Times Magazine was doing a big story on the lack of productivity in drug discovery (which I have been predicting for years now) and maybe it was time to go back to “trial and error”.  Now, I’m not going to say they’re wrong because we have tried proteomics, genomics, combinatorials, target based drug design, RNA interference and a whole lotta other “omics” type technologies and none of them have pulled off the “immaculate reception” to save the game that they promised to deliver.

But the thing that really made me laugh was the idea that any bean counter is going to let the R&D division go back to “trial and error”. My last impressions of the industry just before Pharmageddon was that “trials and errors” were distinctly money wasting activities. First, there was no metric that could be applied that could accurately determine exactly how many trials would be necessary to achieve the desired outcome. Secondly, there was the negative word “error”. Error implies failure, not a measurable objective, like a lead in the pipeline. To MBAs and the finance industry that now direct drug discovery research, it is important to minimize negative outcomes like errors, nevermind that it is the way the scientific method works and that we learn as much from error as success. Errors are the way we eliminate dead ends and turn our attention to more promising avenues. It’s how we work the kinks out of all those “-omics” technologies. Whatever. Executives would much prefer “predict and succeed”, which is theoretically a better use of time and money but rather less like science.

We might also try to eliminate the mergers and acquisitions of the drug companies by bigger drug companies, a trend that has interrupted project after project in the last two decades and caused the elimination of entire therapeutic areas. The increase in mergers occurred at the same time that biology is undergoing a 21st century scientific revolution. The finance industry’s unchecked enthusiasm for trading drug companies like baseball cards has blighted many promising new technologies and the careers of thousands of highly trained scientists, hence, no new blockbuster drugs. We probably do not need to conduct any additional trials and errors in merger experiments before we kill off the field entirely.

Just my non-MBA opinion but the lack of blockbuster drugs in the pipeline was entirely predictable fifteen years ago by those of us who experienced the joys of constant M&As. Maybe the bigger problem is that the MBAs never asked those of us in the trenches about the effect of mergers on productivity. Hmmm, one can only imagine why…

Derek Lowe and his insider commenters weigh in on the New York Times Magazine as well.

Re: Christie

I am not at all surprised that New Jersey is experiencing financial difficulties:

April’s income tax revenues from the state’s wealthiest residents are far less than expected, and the overall shortfall for the current fiscal year is $800 million below the Christie administration’s projections.

From a first hand perspective, I lived through Pharmageddon from 2007-2013 when lab after lab shut down, transferring a tiny fraction of the workforce to Cambridge, MA and leaving tens of thousands of highly skilled, well paid STEM professionals to rot in the vast suburban jungle between New York City and Philadelphia.  (Don’t believe me, you congressional lurkers out there?  Go look up the NJDOL stats for those years.  When you’re done cringing in horror at the waste of human and tax resources, you can tell those Pharma lobbyists to f^&* off the next time they whine that they just can’t find good help anymore and need to import from Asia.)

Of course, it wasn’t all Christie’s fault.  He wasn’t elected until 2009 (no, I didn’t vote for him.  I voted for Chris Daggett).  By then, the merry axmen in the executive suites were already hacking away at families and careers with abandon.  Living in New Jersey ain’t cheap and it gets damn near impossible when you lose your $100K salary to be replaced by a measly $2000/month in unemployment.  Someone besides me should see the link between the hemorrhaging of highly paid jobs and NJ’s fiscal problems.

Just think of all the tax revenue that was lost when Christie couldn’t be bothered to stop the carnage.  That’s tens of thousands of well paid jobs, *poof!*, gone in a flash.  Deval Patrick didn’t seem to have trouble attracting that (vastly reduced) pool of jobs, did he?  By the way, did those biotechs in Cambridge who promised to hire in order to get tax breaks actually hire all the people they said they would?  And why didn’t Christie try to make a deal with the pharmas to keep them in the state?  Was he just too busy putting his political adversaries in thumb screws?  Was he having too much fun killing infrastructure projects and slashing the NJ Transit budget in order to give hard earned NJ tax dollars to developers of a white elephant in the Meadowlands?

Anyway, Paul Krugman should stop wondering about why people are so enamored with Christie.  Well, some of us weren’t but then we weren’t taken in by Obama either and for roughly the same reasons.  Both politicians coasted to victory by playing on the emotions of the electorate.  In Christie’s case, he says what he thinks everyone is thinking.  Or at least he’s not afraid to verbally abuse the defenseless.  He gives his supporters status by picking on someone down the totem pole, separating them from their fellow citizens.  In Obama’s case, he was all about appealing to the aspirations of the insecure.  He called them “the creative class”, gave them status and separated them from their natural allies.  He made some vulnerable democrats feel all warm and gooey.  Yes, we can.

So, what can we learn from Christie and Obama?  My guess is that when it comes to politics, it’s best to be a cold blooded voter and ask very directly and persistently, “What have you done for ME lately?”  And when those pols start going for the emotional jugular to tell them to talk to the hand and walk away.

 

Need Yves Smith’s analysis of new Pfizer hostile takeover of Astra-Zeneca

Derek Lowe at In the Pipeline has a post on Pfizer’s hostile move on Astra-Zeneca:

What the hell is Ian Read thinking? Pfizer is apparently going hostile with their attempt to buy out AstraZeneca, all but ensuring that the deal, if it goes through, will take place at the highest price and in the messiest fashion that it possibly could. And for what?

If you’ve been following Pharmageddon from the beginning, you will know that Astra-Zeneca’s fall off the “patent cliff” was one of the steepest in the industry.  The patent cliff is the term used in the industry that refers to the expiration of patents for the major blockbuster drugs.

Patent Cliff by company since 2010.

 

Weirdly, most blockbuster patents have expired within the past decade because they were discovered in the 90’s, the golden age of drug research.  If you’re wondering why your blood pressure meds are suddenly so affordable, that’s why.  They’re generic now.  Pharma can’t make as much money off them anymore.  Great!, you say.  And it probably is great, to some extent.  The problem is there is not a lot in the pipeline to replace them, that is, if you’re interested in more effective drugs with fewer side effects.  There are several reasons for this that I’ve discussed in previous posts but the primary cause is NOT for lack of trying.  Researchers have seemingly endless dogged determination to preserver in  the face of failure after failure.  The problem is that research has to deal with *two* impossible systems: the complex biology and the self-serving, clueless managerial/finance class.  And the underfunded and politicized FDA.  Make that THREE impossible systems.  And the class action law industry.  FOUR! It all adds up to unnecessarily and ridiculously expensive drugs.  But I digress.

So, according to Derek, Astra had some really rough years, laid off a ton of people in Delaware and all around the world, but hired a new guy in 2012 to turn the ship around and has plans to consolidate a tiny fraction of their research unit in Cambridge, MA where no one really wants to work because it’s a.) expensive, b.) a pain in the ass commute and c.) an insecure career environment for researchers.  MBAs really are a bunch of status snob lemmings, I swear.  Or magpies chasing the latest shiny thing.

My bad, that’s Cambridge, UK where AZ wants to set up its stripped down R&D division.  It’s probably just as attractive to the relocated researchers (You happy few!  You band of brothers!) as the American Cambridge.

Derek makes a good point in that Pfizer has a lot of money to spend on the small, nimble biotech startups that MBA types have told the analysts are supposed to be able to generate a s^&*load of drugs to inlicense.  They’re like unicorns, these little startups, or like perfectly elastic collisions of particles in a box.  Theoretically, they exist but in the real world?  ehhhhh, not so much.  Drugs rarely emerge from these tiny incubators fully formed because, helloooooo, Silicon Valley, drug discovery is NOT like writing code for a new Facebook.  But you’ll find out in the next couple of years.  Just sit in on one of the project teams while the biologists drone on and on and on about how much to tweak the components of their confirmatory and cell based assays to make them reproducible and it will quickly dawn on you that drug discovery makes coding look like Chutes and Ladders.  Even so, we’ve got to wonder why Pfizer is choosing to forgo spending some of their billions on the biotech startups in order to sit on a pile of cash.  Where is the drive for innovation we’re always hearing so much about?

Anyway, where was I?  After pondering the problem for awhile, Derek hypothesizes that Pfizer is buying Astra-Zeneca, a foreign owned company, to hide its taxable profits from the US government.  Or the British government.  It’s like some British, Swedish, American threesome, which initially sounds like a good time for everyone except the citizens who actually count on corporations to respect them. It’s a rather strong accusation but Derek says he never wants to work for Pfizer anyway.  That’s Ok for him but my pension was acquired by Pfizer when it gobbled up Wyeth and then proceeded to lay off every one of the people I used to work with.  I’m kind of concerned with this wobbly third leg of my rapidly disappearing retirement stool so if Pfizer is up to something, I’d like to know what the heck it is.

The remaining survivors in research at Astra-Zeneca can see what’s coming.  They must be busily rewriting their CVs and networking instead of finishing that reaction or fishing the crystals out of solution to send to the synchrotron.  What a lovely way to spend your hours in the lab.  And the industry wonders why there is nothing in the pipeline after 20 years of this crap.

What this research project team really needs is a financially nerdly Yves Smith type who can look at the details of the proposed takeover and report back in a meeting to tell us what’s up.  More to the point, what does the UK’s new tax rates for foreign profits say about whether the conservative government is trying to make Britain into a sleeker global tax haven?  I’m just a chemist.  Money is not my area of expertise.  This project team needs a finance specialist.

 

 

Quick Notes about Pittsburgh

Parrothead pastries at The Oakmont Bakery

There are a couple of posts in the NYTimes today that are full of praise for the economic recovery of Pittsburgh.  (Here and a Krugman post here.)  So, I thought I’d throw in my 2 cents.

First, I love it here.  People are just nicer than they are in Jersey.  And there are fewer of them.

Second, it is true that you can get higher incomes in places like Boston and San Francisco.  A lot of people who lost their good salaries in NJ due to Pharmageddon decided to try their luck in Massachusetts because that’s where all the lemming CEOs pharma companies relocated a fraction of their workforce and where there are a bunch of start up companies.  And I thought about that- for about 15 seconds.

Although the chances of finding a job up there for me is slightly greater than in NJ, job insecurity comes with it.  I heard from a lot of people who were transferred there or got a job in a start up there or were already working there and they hated it.  They were scared to death of losing their jobs, the cost of living was astronomical and the commute from the burbs to Cambridge proper is ridiculous.  It was even more ridiculous when you consider that even with their good salaries, they couldn’t afford to live close to work.  So, I crossed it off my list.  I didn’t want to drag a teenager to a place where I could lose another job and spend all my money on rent and taxes because my salary was high.  It sounded like an unreasonably risky thing to do for a job.  I have no idea what the bonus class is thinking but I think it has something to do with the status of being near Harvard and MIT.  In my humble opinion, that is not a good enough reason in the age of internet to risk your staff’s domestic security and increase its precariousness.  Precariats are under too much stress to be innovative creative types.  You can’t whip and threaten them and expect them to discover all the time.  Nah-gah-happen.

When I sat down and did the math, I figured that I could have the same standard of living in Pittsburgh, on a much more modest salary, as I would in Cambridge or NJ AND because I own my home without a mortgage, I am not in danger of losing my house if the job goes away.  I can eek out a living here as a bartender and still live reasonably well.  Fortunately, I won’t have to relearn how to pour but if I had to, it wouldn’t have been an issue.

So, I’m glad that Pittsburgh is now being held up as a model of urban renaissance because it deserves it, although it would be great if the bus capacity went back to what it was 20 years ago.

Gallows humor about Pharmageddon

Merck recently announced a shakeup- again.  Yeah, yeah, but this time they really mean it.  In response, a commenter at In the Pipeline wrote this Onionesque report:

Subject: FW: Merck in the News
MERCK TO CUT WORKFORCE 120 PERCENT

NEW YORK, N.Y. (AP.com) – Merck will reduce its workforce by an
unprecedented 120 percent by the end of 2013, believed to be the first
time a major corporation has laid off more employees than it actually
has.
Merck stock soared more than 12 points on the news.

The reduction decision, announced Wednesday, came after a year-long
internal review of cost-cutting procedures. The initial report concluded
the company would save $1.2 billion by eliminating 20 percent of its
85,000 employees.

From there, said a spokesperson, “it didn’t take a genius to figure out
that if we cut 40 percent of our workforce, we’d save $2.4 billion, and
if we cut 100 percent of our workforce, we’d save $6 billion. But then
we thought, why stop there? Let’s cut another 20 percent and save $7
billion.

“We believe in increasing shareholder value, and we believe that by
decreasing expenditures, we enhance our competitive cost position and
our bottom line,” he added.

Merck plans to achieve the 100 percent internal reduction through
layoffs, attrition and early retirement packages. To achieve the 20
percent in external reductions, the company plans to involuntarily
downsize 17,000 non-Merck employees who presently work for other
companies.

“We pretty much picked them out of a hat,”.

Among firms Merck has picked as “External Reduction Targets,” or ERTs,
are Quaker Oats, AMR Corporation, parent of American Airlines, Lockheed,
Boeing, and Charles Schwab & Co. Merck’s plan presents a “win-win” for
the company and ERTs, said the Merck spokesperson, as any savings by

ERTs would be passed on to Merck, while the ERTs themselves would benefit by the increase in
stock price that usually accompanies personnel cutback announcements.

“We’re also hoping that since, over the years, we’ve been really helpful
to a lot of companies, they’ll do this for us kind of as a favor,”.

Legally, pink slips sent out by Merck would have no standing at ERTs
unless those companies agreed. While executives at ERTs declined to
comment, employees at those companies said they were not inclined to
cooperate.

“This is ridiculous. I don’t work for Merck. They can’t fire me,” said
Kaili Blackburn, a flight attendant with American Airlines.

Reactions like that, replied the Merck spokesperson “are not very
sporting.”

Inspiration for Merck’s plan came from previous cutback initiatives,
said company officials. In January of 2005, for instance, the company
announced it would trim 15,000 jobs over two years. However, just a year
later, Merck said it had already reached its quota. “We were quite
surprised at the number of employees willing to leave Merck in such a
hurry, and we decided to build on that,”.

Analysts credited the short-term vision, noting that the announcement
had the desired effect of immediately increasing Merck’s share value.
However, the long-term ramifications could be detrimental, said Morgan Stanley analyst Beldon McInty.

“It’s a little early to tell, but by eliminating all its employees,
Merck may jeopardize its market position and could, at least
theoretically, cease to exist,” said McInty.

The spokesperson, however, urged patience: “To my knowledge, this hasn’t
been done before, so let’s just wait and see what happens.”

I laughed at first and then thought, that’s pretty much how they do it.

Well, at least the guy who wrote that has a future at some satirical online newspaper.

Friday Science Horror Stories

So, what does that make this, the third or fourth week of rainy weekdays?  I can’t remember.  The grays just blur into one another with teasers of blue sky.  Yes, we had a very nice weekend last week but it’s happened so rarely lately.  Mostly, it’s drizzling when I wake up, I have all kinds of plans to sand my deck and replant the bed out front where the creeping juniper used to be and I just have to sit on all of those things until the sun comes out.  No use in renting a sander unless I have a good four hours of no rain and I just can’t count on that these days.  The forecast is for more unpredictable precipitation until next Tuesday, although I might catch a break in the cloud cover tomorrow.  So, there’s hope that I can finish the f^(*ing deck.

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Update for my pharma friends:

Chemjobber has a post about visitors to the White House and how many of them have been from the science industry. Very interesting. Jeffrey Kindler, the ketchup king and now deposed head of Pfizer, was there many, many times.  Hey, did I mention that Pfizer decided recently to stop offering employees pensions so that they could risk all of their retirement money in 401Ks?  And Chris Viehbacher, he of the “good scientists don’t want to work for big pharmas” fame, (which indicates that he’s never actually gotten down from his lofty perch and spoken to any of the good scientists in his own labs), was there on March 11, 2011, about four months after his company bought Genzyme and proceeded to lay off most of his new acquisition’s chemists.

Well, they probably didn’t want to work for a big company anyway so, you know, conscience clear, and all that.

If you’re in the pharma industry,check it out and see if a CEO has been to visit the president or his advisors and viciously lied to them or collaborated with them or whatever those guys do in the White House.

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I’m almost done harping on Pharmageddon.  Yesterday, I had a conversation with a reporter from the Washington Post who says he is looking into the high number of layoffs among STEM professionals. (Many thanks to everyone who helped get the word out.  We appreciate it.)  Let’s hope there’s a crack in the cloud cover on this issue.  Either I’m paranoid that the present elected officials don’t want anyone to know how our scientific infrastructure has been decimated, or those same elected officials are dumber than a box of rocks and will believe anything the bonus class is telling them about structural unemployment, or there are too many scientific morons on the Republican side of the aisle in Congress, or they’re all being mislead by the out-of-date numbers of the Bureau of Labor Statistics. None of those possibilities give me peace of mind.  On the other hand, since there are so many of us out of work right now, we should look into replacing the clueless in Congress with our own geekier representatives.  At least there are two good years of employment and health bennies to look forward to.

Derek Lowe at In the Pipeline has a question for the ex-pharma crowd: What’s the craziest misinformation you’ve heard about the pharma industry or science in general?  He’s listed a couple that I’ve heard over and over again.  The first is that industry has found the cure for cancer and it’s sitting on it.  Friends, I know that anyone who reads this blog is smarter than the average smartass lefty blogger so I shouldn’t have to tell you this but that idea makes no f^&*ing sense.  If industry had the cures for cancer, they’d be marketing the hell out of them and charging whatever the market would bear, which would be plenty.  If you’ve ever had a family member who is terminally ill with cancer, you know that you would mortgage your house to buy him a cure and the guys in the marketing department of Trustus Pharmaceuticals know it too.  So, this is a ridiculous idea.  The truth is both good and bad.  We’re getting closer to understanding the mechanisms of cancers but we’re still a long way off from beating it.  What we need is more money and more commitment from our governments.

The second idea is that all of the science comes from government funded grants.  While it’s true that grants fund a lot of basic research, it is NOT true that industry takes that already discovered and perfect drug and markets it for a profit.  No, no, no, no, noooooooo.  At best, industry gets a clue from academia, maybe some insight, a mechanism, and occasionally a germ of a drug in its earliest form.  What industry does is accumulate all of the information about the proposed target as it can, sifts through it, determines if there is something it can work with, and then sets about doing the years and years of research it takes to develop those ideas into a therapy.  It’s a long hard slog that involves many steps of biology, chemistry, pharmacology and animal models to get to the point where *maybe* there’s a drug in there somewhere.

That doesn’t diminish the government’s role in funding research.  This research is vital to what comes after.  But it’s like Edison’s 1% inspiration followed by industry’s 99% perspiration.  And along the way, industry is able to add insights to the original problem.  We’re not just applied science monkeys.  We make our own discoveries along the way and add to the body of knowledge on a subject through our own papers and presentations.  That, in turn, helps feed science in general.  The more knowledge that’s out there, the more chances that academia and industry will find places to collaborate.  We are now seeing a lot more collaboration between academia and research.  And while that’s a good thing, academia needs to be funded more generously for new collaborations to work optimally and to boost academia’s contribution past that 1% inspiration.  Biology is undergoing a modern, “paradigm shifting” revolution right now.  We can’t afford for any government lab to be underfunded or our nation will be left behind.

What our elected officials need to do is make sure that the people who fund the collaborations benefit as well as the industries that develop the ideas.  Can we do it?  Sure we can.  We just need to think of the American people as stakeholders.

And here’s what will happen if we do not take this challenge seriously.  A recent article in the NYTimes says that American Physicists fear that we are losing our edge:

When three American astronomers won the Nobel Prize in Physics last year, for discovering that the expansion of the universe was speeding up in defiance of cosmic gravity — as if change fell out of your pockets onto the ceiling — it reaffirmed dark energy, the glibly named culprit behind this behavior, as the great cosmic surprise and mystery of our time.

And it underscored the case, long urged by American astronomers, for aNASA mission to measure dark energy— to determine, for example, whether the cosmos would expand forever or whether, perhaps, there might be something wrong with our understanding of gravity.

In 2019, a spacecraft known as Euclid will begin such a mission to study dark energy. But it is being launched by the European Space Agency, not NASA, with American astronomers serving only as very junior partners, contributing $20 million and some infrared sensors.

For some scientists, this represents an ingenious solution, allowing American astronomers access to the kind of data they will not be able to obtain on their own until NASA can mount its own, more ambitious mission in 2024.

But for others, it is a setback. It means that for at least the next decade, Americans will be relegated to a minor role in following up on their own discovery.

American scientists are facing a real dilema.  If our government is not going to invest in basic research, we will be putting ourselves decades behind.  As science accelerates in the rest of the world, we will fall back even faster.  Pretty soon, America will start to resemble one of those 2nd world countries where corruption is pervasive and where government is permanently underfunded and the number of Nobel prizes going to that country’s scientific infrastructure is vanishingly small.

We are at Robert Frost’s “two roads diverged in a yellow woods”.  The decisions we make now will affect the way our country develops.  Are we going to continue to cater to the conservatives who insist on allowing ignorance on evolution, climate science and private sector funding take us down the road to scientific obscurity or are we going to recommit to taking the lead in science and technology and demand that the wealthy step up, pay their taxes and help us refund our efforts so that American citizens, the stakeholders, benefit?  Can we afford for so many Americans to feel entitled to their ignorance?

Anyone?  Anyone?  Barack?

BBC-4: The End of Drug Discovery

I see you out there rolling your eyes.  “Oh, Jeez, there goes RD, running around with her hair on fire about Pharmageddon again.  Why doesn’t she just pick a hobby, like gardening, and shut the f^&* up already?”

Right?  I mean, for some of you out there, it’s just so much easier if your pre-formed political tribalism has given you all the answers you need about pharma and you don’t have to think about us anymore.  “I mean, big pharma is evil, well, not you personally, RD, but you know, the people you used to work for.  And they want to poison everyone for profit and make up diseases to make money and no one really needs anti-depressants.”

Ok, now you’re starting to talk like crazy scientologist Tom Cruise, jumping all over the couch and sneering at Brooke Shields for the audacity of getting post-partum baby blues.  It’s a dangerous attitude and self defeating.  By knowing what’s really going on and understanding the limits and obstacles of drug discovery, you’re a lot less likely to get flim-flammed by the MBAs, the lawyers and political lackeys in the future, right?  Please say yes, because we are trying to get through to you and it’s not easy.  There’s a lot of deprogramming to do.

Anyway, I know a lot of you won’t listen to me and when I post on this subject, I get crickets in the comment threads, either because you’re still drinking the kool-aide that STEM jobs are the way of the future or because it’s all too tiresome.

But this BBC-4 program on the death of drug discovery is really good and it’s only 38.00 minutes of your time.  They interview researchers and explain how the drug discovery process happens, clearly.  They say the same thing I’ve been saying for the past several years but this is the BBC and they say it all with that clipped British accent, so, you know, credibility and all that.

You can listen to this while you’re cleaning out the litter box and sorting your recycling.  You owe it to yourself, your fellow human beings who will get sick someday and need your help, and to us, the dedicated and now out of work professionals who slaved over a hot shaking incubator to make you drugs.

We need your help.  It’s that important.

Now, click here.

They came for the chemists, but I said nothing

because I was not a chemist.  And why would I want to stick up for pharma chemists anyway?

Right?

We came behind the steelworkers, computer programmers and factory workers.  How many of us said anything?

This evening, I ran into a former colleague of mine in the grocery store.  She’s a chemist and one of the lucky few who has a job in Massachusetts.  She’s also Chinese but has been here for a long time.  Even though she has a job, she knows it could be temporary.  The lab she is moving to is much smaller and dingier than the one she is leaving.  She says she feels like a grad student again.

She told me that Astra-Zeneca just closed a new lab facility.  Beautiful new labs, closed, and everyone laid off.  The CEO is walking away with $65,000,000.  She’s beyond disgusted.  But there was something even worse on the horizon.  She says that the industry is adopting the work habits of the Chinese.  In China, employees live away from their kids.  The grandparents look after them.  They might live halfway across the country.  It is expected.  In fact, there are a lot of things that the Chinese put up with that Americans are now going to have to put up with.

This is the way it is.  We’re going to have the lifestyle of the Chinese with none of the benefits.

And when I say we, I mean YOU too.  We are the high tech, educated, cutting edge life scientists and this is the way the new business model is going to treat us.  You’re next.

If you don’t say anything, they win.

The Poster Child of “The Strategy of No Strategy”: Pfizer

Pfizer is trying to reinvent itself by shrinking, according to the New York Times. I can’t say that I’m surprised.  The CEOs and financial guys are still living in their own worlds.

The Strategy of No Strategy is strong in this one.  Oh such tasty morsels in this article.  Where to start.  How about this paragraph full of chewy goodness:

Pfizer — once the Big in Big Pharma — is making a radical shift, one being watched closely by the rest of the industry. It is getting smaller.

Last week the company announced it was selling its infant nutrition business to Nestlé for $11.85 billion, and it is expected to divest its profitable animal health business by next year. At the same time, the company is slashing as much as 30 percent of its research budget as part of a plan to focus on only the most promising areas, like cancer andAlzheimer’s disease.

1.) It’s getting smaller only 2 years after it made itself bigger.  Pfizer bought up Wyeth and laid off every single one of my friends and former colleagues in research.  It hired back a handful and sent them to Groton, CT.  I’ll get to Groton in a minute.

2.) It’s getting rid of valuable assets to concentrate on cancer and Alzheimers.  And why those two therapeutic areas, you ask?  Allow me to get cynical.  Well, more cynical than I already am.  These two diseases progress rapidly and the sufferers are almost desperate for a cure, cancer drugs get fast tracked for approval, toxicity profiles are relaxed, you can pretty much charge what the market will bear, and even if the drugs fail the patients rarely complain.  So, quick approval and no class action lawsuits.  What’s not to love?  Looks like you Lupus sufferers and schizophrenics are SOL though.

“It’s not necessarily smaller per se, it’s focused,” Ian C. Read, Pfizer’s chief executive, said in an interview Tuesday. “We are at our heart a biopharmaceutical company focused on applying science to improving people’s quality of life. That is what our core is. That is what will determine our success.”

{{rolling eyes}}

This part is good:

Drug executives are asking themselves: “What is it that we now face, given that in the past decade — when everything was going right — we didn’t build with this future in mind?” said Jeremy Levin, who oversaw a similar reorganization of Bristol-Myers Squibb and is about to take over as chief executive at Teva Pharmaceuticals.

At Pfizer, skeptics have questioned the decision to shed some of its most profitable units in favor of doubling down on the risky pharmaceutical business. Pfizer’s nutrition unit grew by 15 percent and animal health by 17 percent in 2011, while its pharmaceutical sales dipped by 1 percent. And Pfizer has suffered some notable flops over the last several years, including the failure of an experimental cholesterol treatment that was seen as a potential successor to Lipitor and poor sales of an inhaled insulin drug that the company eventually abandoned.

So, in the past decade, when everything was going right, why did Pfizer decide to eat smaller companies and lay off all the research staff and put companies and projects in a state of limbo while they merged, and how could that *possibly* result in not building with the future in mind?

Now it’s selling off it’s most profitable divisions.  It doesn’t take a rocket scientist to realize that it’s doing it to pay off the shareholders, who must be obeyed after all:

The acquisitions, some said, turned Pfizer into a Frankenstein’s monster — a giant stitched together from the scraps of smaller companies that lurched forward with little purpose.

“I think the company sort of lost their way in the years before the Wyeth acquisition,” said Catherine J. Arnold, an analyst for Credit Suisse.

Ya think?  Hey, how about the next time a merger is in the works, we actually ask the people discovering drugs whether it is a good idea.

Oh and about that plan to cut research costs by 30%:

Even so, the company’s decision to cut research budgets as it is planning to recommit to its pharmaceutical core struck some as risky. Mr. Gordon, the Michigan business professor, called it a “magic trick.”

It’s a magic trick, however, that most major pharmaceutical companies are also trying. “The question is how do you remain successful and sustain your operations if you’re investing less and less in R&D?” said Kenneth I. Kaitin, a professor and director of Tufts University’s Center for the Study of Drug Development. “The answer to that is to try to find a new way and a more efficient mechanism for discovering and developing drugs.”

If you want to discover more drugs, cut research!  Everyone is doing it.  Let me just suggest to the “smartness” crowd and masters of the shareholder universe that the reason you don’t have any blockbusters is because you treated research like a red-headed stepchild while you were busily merging your little hearts out and collecting bonus checks.  “A more efficient mechanism for discovering drugs” now means outsourcing to China all the grunt work while trying to buy licenses for drugs from struggling and desperate former research staff who will sell them for a tiny fraction of what they may be worth.

Pfizer plans to reduce its research budget from $9.4 billion in 2010 to $6.5 billion to $7 billion this year. It closed a research center in Britain and has been trimming its facility in Groton, Conn., and moving resources to areas closer to universities in Boston and Cambridge, England.

In 2011, the company ended 91 projects, canceling programs aimed at treating bladder infection, for example, as well as one to treat nasal symptoms from allergies. Company executives have also said they will be on the lookout for smaller acquisitions to fill gaps in their portfolio, and will expand partnerships with academic institutions.

Mr. Read said the cuts would not affect the areas that the company has prioritized. “Most of what I cut had a low probability of success,” he said.

Those projects had an even lower probability of success after tens of thousands of research jobs were cut, the budget was slashed more times than a libidinous teenager in a horror movie and the rest of the staff was made to play a game of musical chairs moving from Princeton and Pearl River to Groton to not Groton but we don’t know where yet to Cambridge.  I’ve heard reports that the few former Wyeth staff have been laid off more than once since the merger.

Pfizer has to be the poster child of The Strategy of No Strategy.  They’ve abandoned some of their hardest, smartest workers, and I know some of these people so I know how good they are, to chase get-rich-quick-schemes from the oh so cleverer people at Harvard and MIT and then get Chinese PhDs at a fraction of the cost to churn out compounds in Shanghai.  Pfizer has completely abandoned the idea that it takes 10-15 years to discover and develop a drug, and that continuity of research is crucial.  Pfizer first acquired and then ripped apart all of the smaller pharmas under it to become a bloated behemoth of a leviathan that could be consumed by shareholders in wild abandon.  It’s left a big gaping hole in the pharmaceutical landscape and so far as I can tell, not one politician has bothered to find out why our drug discovery expertise is disappearing right before our very eyes.

Right about now, it is dawning on Wall Street, the CEOs and the investors that they have unleashed Pharmageddon and that they’ve made some big mistakes, not least of which is that the profits that can be shared are slowing down to a mere trickle.  Nevermind all the scientists who no longer have careers, what about their bonuses?? I don’t know about bonuses. My former colleagues and I should be worried about our pensions.  That big pile of cash is going to look mighty tasty and we are all headed for a seniority of deprivation if we don’t figure out a way to stop them from consuming it all.