Are Some Degrees Better than Others for Big Pharma Leaders?
(Page 2 of 2)
or medical degrees (although, not surprisingly, there are a number of chemists). Looking into the history of a number of these companies shows why business degrees were highly favored years ago. While we think of these organizations today as primarily focused on pharmaceuticals, many of them are (or in most cases, were) conglomerates in years past, with wide ranging business interests. These include selling a variety of over-the-counter health products, diagnostics, animal health products, as well as cosmetics, raw chemicals, and consumer foodstuffs.
American Cyanamid’s Lederle division (which was absorbed into American Home Products, then Wyeth, then Pfizer) developed both tetracycline and methotrexate, useful drugs that are still prescribed today. As a conglomerate, however, American Cyanamid also sold Formica countertops, Old Spice aftershave, Breck shampoo, and Pine Sol cleaner, along with numerous agricultural products and industrial dyes and chemicals. Cosmetics manufacturer Elizabeth Arden used to be a part of Eli Lilly, American Home Products (now part of Pfizer) sold Chef Boyardee canned pasta products for over 50 years, and GlaxoSmithKline sells fruit and energy drinks. Thus, it’s not surprising that former leaders of these types of companies were more business focused than pharma focused: medicines made up only a part of their product portfolio. The majority of these companies have divested themselves of these side businesses in recent years, or the pharmaceutical component has been sold off (e.g. Abbott’s spin out of Abbvie).
Acquisitions also make it hard to evaluate innovation. In the last 15 years Pfizer has gobbled up Warner-Lambert, Pharmacia, King Pharmaceuticals, and Wyeth, and these companies in turn had already acquired Upjohn, Sugen, Parke-Davis, Agouron, and Searle among others. If you’re having trouble innovating, you can certainly buy innovative drugs across a widely varied pharmaceutical landscape. This process is still in progress today, a recent example being Amgen’s acquisition of Onyx Pharmaceuticals.
In summary, it seems pretty clear that the idea that scientists led Big Pharma companies during their most profitable (and possibly innovative) period is false. Most Big Pharma CEOs today are not scientists, but that was true in 1980, 1990, 2000, and 2010 as well. However, in a business that spends one of the highest percentages of all industries on R&D (up to 20 percent of revenues), CEOs must work closely with their research heads and Chief Science Officers if they truly want to be running innovative companies. An excellent example here is the relationship between Regeneron CEO Leonard Schleifer (MD-PhD) and his CSO George Yancopolous, as detailed in a Forbes story on the company’s remarkable recent run of success.
Biopharmaceutical companies are not struggling today because scientists are no longer running them. They are in serious trouble because they have failed to adapt well to a changing scientific, business, and healthcare environment. As Charles Darwin has been paraphrased as saying, “it is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself.”