Pharma looks to biotech for R&D model

Facing the patent cliff, looming regulation changes and generic competition, pharma companies are under pressure to produce new drugs faster and cheaper. And in an effort to promote a culture of innovation, pharma companies are increasingly going the way of biotechs and scrapping their large research units for smaller divisions. That's the theme coming out of today's Windhover Pharmaceutical Strategic Outlook conference in New York, the Wall Street Journal reports. 

According to Pfizer's chief of worldwide research, Rober MacKenzie, the traditional pharma R&D strategy created a system steeped in bureaucracy and lacking in accountability. "We believe that the big research organization model really doesn't work particularly well," said MacKenzie.

The "biotech-like" model being pushed by conference attendees is one that encourages a culture of innovation, flexibility and meaningful interactions by organizing R&D into small discovery units of 100 to 150 researchers. Several big pharma companies have announced such R&D changes in recent years, including Pfizer and GlaxoSmithKline. "We try to marry the strength of biotech spirit and entrepreneurship with big pharma's resources," said Zhi Hong, head of GSK's infectious diseases division.

But this shift isn't isolated to big companies. Francis Cuss, head of discovery at Bristol-Myers Squibb, says the mid-sized company isn't worried as much about the size of its drug discovery units, but it has nonetheless taken steps to change its R&D culture. "What we are trying to do is completely change the culture, or at least more in the direction of that looser biotech culture," said Cuss, who compared BMS' structure to that of Amgen.

- read the WSJ article for more

ALSO: With the entire pharma industry reorganizing R&D operations, Merck says that its own restructuring of research is "painful" and might include layoffs: "Nothing is safe from cuts." Report