Rebuilding the R&d Engine in Big Pharma, Article Review Example

One of the reasons determined by the author (Garnier, 2008, p. 1) to be responsible for decreased stock market performance of pharmaceutical companies is the low research and development productivity. The article tries to explain the readers how the productivity and profitability of the R&D department can be increased in “Big Pharma” companies.

The author is the CEO of one of the largest international pharmaceutical companies:   GlaxoSmithKline. Speaking of experience, he highlights the challenges of developing new drugs in a cost-effective way, and tells the reader about the methods introduced by his company.

One of the most significant challenges identified by Garnier (2008) is the faster expiry of the patent. As the competition among drugs becomes fiercer, companies’ profits plunge. Further, the regulatory requirements of testing have changed, therefore, companies now have to invest more money into trials to get the newly developed drug approved. Finally, the requirement to offer generic drugs for patients in the United States, as an alternative to branded products has decreased the market share of “Big Pharma” companies.

The solution that Garnier (2008) offers is based on a complete reorganization of R&D departments. The author states that companies need to understand that the size of scientist teams working on projects has increased in the past decades. Consequently, the coordination of research became problematic. Breaking down the R&D department to smaller teams working on individual families of diseases, and making collaboration more effective can result in increased productivity, according to the author. Finally, rewarding and recognizing scientists strong with leadership capabilities can motivate teams to complete phases of product developments faster. Separating research for “first in class” and “best in class” research and development is also essential.

It is clear that the pharmaceutical industry has gone through some changes, and “Big Pharma” companies cannot carry on operating the same way they did 50 years ago. The suggestions described by Garnier (2008) are both valuable and proven to be effective, and all leaders of “Big Pharma” companies should follow his advice.

Garnier, Jean-Pierre (2008) Rebuilding the R&D engine in Big Pharma. Harvard Business Review. May 2008.