Most of the ClinPage podcasts are done in a pretty typical Q&A format. Today, however, we're posting a different type of audio: some snippets from the 2009 Clinical Trials Congress, held earlier this year. We thank the Institute for International Research (IIR), which organizes a fabulous conference every year, for their permission to do this.
The speaker who made the deepest impression was Roy Vagelos, the former president and CEO of Merck. We've been thinking about his remarks for several months. His presentation hit two remarkable notes that remained with us. One in a major key. One in a minor key.
Vagelos didn't mention any of the mega mergers affecting both Schering-Plough, which Merck is acquiring, or Wyeth, which is being swallowed by Pfizer.
Instead, he told war stories. Some very good ones. Although his tendency is to downplay his own role and showcase the scientists who worked for him, the clear subtext in Vagelos' presentation is that in 1988 he personally had a tough call to make.
Merck had developed a cure for river blindness, but the patients in the affected markets would never be able to afford the drug. So Vagelos and Merck made the medicine available, gratis. Once the company started patients in developing countries on the therapy, it would be forging a life-long promise to each person. Serious stuff. Serious money.
Would other pharmas have made the same decision? Then? Today? Perhaps. Here's a nice quiz for the chit-chat at your summer barbecue: what is the number of people Merck is maintaining on ivermectin? 80 million, mostly in Africa and South America.
Vagelos has written a few books about all of the other things he accomplished. He is a true scientific hero. We have to say that it was just, well, inspiring to see a person who could combine pharmaceutical science and honest-to-goodness capitalism without any scandals or crises to apologize for. That was good for society and, Vagelos says, internal morale at Merck.
But Vagelos did not want the audience just to bask in the glow of doing good deeds. He is clearly worried (and opinionated) about where the industry is heading. And he briefly and tangentially gestured toward a highly sensitive topic among industry insiders: corporate culture and the degree to which it may be changing.
Back in the day, he told the Clinical Trials Congress, people stayed at a pharma company for their entire careers. That allowed certain values and philosophies to soak in. Said Vagelos: "So many people now don't have the kind of duration in a company. You moved to a company, you grew up there forever. Most of the people I worked with at Merck had never worked anywhere else."
He's also worried about how big some of the companies in the industries have become. Once upon a time, he noted, the industry's leading names were growth companies. That's no longer the case. Says Vagelos: "Can Pfizer be a growth company? No way. Can Merck be a growth company? No way. They've gotten too big, most of them by acquisitions. Nobody has the pipeline. So the industry has matured."
Begging To Differ
At the same time, Vagelos is not worried about the future. He's optimistic. Hugely so. He says the industry will continue to do great science, partly because of the renewable resource of academic entrepreneurs, MD-PhD mavericks who leave their ivory towers to start their own firms and develop new drugs.
As ill-advised as it is to quibble with a guy who started in the industry in 1975 and cured river blindness and personally ushered several classes of compounds into existence, quibble we must. We do agree that small pharmas and biotechnology industry have tremendous promise. No argument there.
Where we depart from Dr. Vagelos is in pinning the future of the industry on the smaller firms. It's hardly a secret that the number of profitable biotechnology entities can be counted on one's fingers. Hundreds of other biotech companies will either go bankrupt or be sold in the next two years, as their dwindling piles of cash smoulder and burn out. Pretty it ain't gonna be.
What with running our laptop and our digital recorder and smartphone, we were too technology-encumbered (and mentally slow) to think to ask Vagelos how the cultural dynamics of nimble startups and biotech firms will be preserved deep inside the digestive tracts of the large pharmas that rescue them. That's a key question. Cynics would say it's impossible.
How will the culture of the most innovative small companies be preserved? That to us is more crucial to the industry's future than what's about to happen at Barack Obama's FDA. There will be another FDA after this one. But the coming years of patent expirations and mergers will either give birth to perhaps a dozen GM-like bureaucracies in the life sciences—or usher in a new cycle of growth and scientific innovation.
If the vibrancy and energy of the smaller firms are not preserved, the largest companies could find themselves in an even deeper cultural predicament than our industry can imagine today. Some of that biotech mojo will be dearly needed—by society and by investors—in age of cancer and swine flu.d9A2t49mkex