Tuesday, June 28, 2011

R&D productivity on the decline?

Source: Matthew Herper 


If this graph is accurate, this is bad news for pharma scientists scientific labor in the US.

I invite readers to speculate as to why the relevant unit (NMEs per billion spent (inflation adjusted)) may be troublesome. Otherwise, you'll find me in the corner hyperventilating, just a little. 

12 comments:

  1. I truly hate the Boston Consulting Group, maybe because I'm still bitter about their role in my layoff a few years ago....

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  2. Yeah, it's hard not to see a bunch of MBAs using this as an excuse to move all R&D to the lowest cost of labor location.

    Also, it's hard not to see this slide as being subtitled "This is Why You Suck".

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  3. It's a bit presumptuous to equate pharma and the entire market for "scientific labor", isn't it?

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  4. A8:25a: Fair enough. Change made.

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  5. This of course does not mean that the rest of the employment market for the industrial chemists in this country is not heading for the crapper.

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  6. Low-hanging fruit is on the decline, yes.

    Incidentally, I wonder if they overlaid a graph of researchers' average years spent working at one company over the same time frame the slope would be very similar.

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  7. @Anonymous 8:51

    Doubtful. Note that it's an exponential decay. If people worked 30 years in 1950, then by now it would be ~ 6 months.

    On second thought...

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  8. I think the other trend that should be simultaneously plotted on this is Revenue/NME. I'm not a pharma chemist, but my understanding is that if the market for a particular drug isn't X billion dollars, it gets tossed. R&D is likely producing similar numbers of compounds, but since a multiple billion dollar business case can't be made, it is killed before being put in the FDA approval process.

    I would hope those MBAs are not just looking at that chart on face value. Of course, that is asking a lot out of those guys.

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  9. A12:02: I could be wrong, but I think the "Go Big or Go Home" mentality has left Big Pharma. I think that these days, any source of revenue is worth pursuing.

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  10. Hmm, in that case, is the cost of getting an official NME from the FDA increasing, leading to fewer applications?

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  11. I wonder how employment trends have changed relative to this graph? Is this partly a problem with losing scientists so the remaining ones are stretched thinner?

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  12. DOOOOOOOOOOOOOOOM!!!! Okay, seriously thinking about that MBA program now...

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looks like Blogger doesn't work with anonymous comments from Chrome browsers at the moment - works in Microsoft Edge, or from Chrome with a Blogger account - sorry! CJ 3/21/20