Research and Development Teams - Coursework Example

Research & Development Teams Lecturer Introduction Modern corporations are confronted by many challenges key among them the intense pressure to develop new products, the need to reinforce their product range, and the escalating costs of production of new products. Many companies in the pharmaceutical industry are consequently engaging in external partnerships including biotechnology firms and clinical research organizations (CROs) in efforts to maintain their competitive edge within the industry, enhance outputs, and acquire new technical inventions. Companies have consequently been compelled to drastically reduce their budgets and staff within their crucial research and development (R&D) departments as well as engineer more efficient methods of controlling their expenditure. Nevertheless, deciding and executing the most appropriate and a prudent process is essential to avoid jeopardizing future production (Gaitonde, 2007). Dr. R.R. Ruffolo of Wyeth Pharmaceuticals, cites the extreme appreciation in overheads, the increased burden of ever mounting regulatory requirements, the litigious nature of U.S. market and the veracity of unremitting invention fresh pharmaceutical drugs being extremely tricky to realize and build up due to the unparalleled quantity of original, ‘genomic-derived drug targets ‘which are largely unknown. Currently an estimated $300 million is used in the R&D within the United States medical industry while a total of $62.3bn was utilized by all manufacturers in 2008. Due to the fact deficiency in innovation would spell doom for many companies, proper management of the R&D functions is the only way a companies can maintain a competitive edge in the market. The current difficult economic environment in which firms are operating has therefore forced them to seek alliances abroad taking advantage of favorable globalization and the improved cheaper global communication networks. This has seen the development of R&D far outposts in Asia (China, India, and Japan), and European countries (Luxembourg, Belgium, the Czech Republic) that assist in staunching the escalating costs and engage highly qualified scientists within these regions rather than relocating them to the company’s local realm. This collaboration includes foreign public universities, with a European average of 4.1 percent, eight percent in Canada and New Zealand but a mere two percent in Korea, Japan and Australia (Bartsev, 2008). Companies are also disengaging from integrated R&D functions by employing more specialization in either, the product invention, component development or assembly to reduce turnaround time and employ economies of scale. Companies are therefore outsourcing their R&D to universities or specialized firms as well as other competing firms in joint projects from across the globe. In Europe, Spain, Britain, Sweden, the Czech Republic, Hungary, Portugal, and Ireland lead in R&D foreign expansion with over 35 percent of their functions outsourced. In the U.S., over 40 percent of R&D tasks are expected to be outsourced within the pharmaceutical industry by 2010. Biotechnology R&D is also determined by these factors which include, manufacturing costs cutbacks, the entry and adjustment to fresh markets and presence of trained human resources. However, the biotechnological sector also requires raw materials to realize their projects. Bartsev (2008) however argues that international mobility or movement of the highly skilled professionals from their home countries especially in the biotechnological sector is more rapid than the parallel movement of the R&D functions abroad. The United States leads with a 45 percent foreign-born specialists, European Union has 30 percent while the UK, Australia, Canada, and New Zealand have enticed large concentration of expatriates’ scientists (UNCTAD, 2004). One company that has incorporated modern innovative methods to deal with decreased financing within the current global recession is Wyeth Pharmaceuticals in its R&D division. The development of drugs unto the final phase is a lengthy, costly, and risky enterprise often taking as long as 15 years while costing from $800 to $1.7 billion with no particular guarantee on the end-product. Less than 10 percent of those drugs that enter Phase 1 in the clinical trials actually get to the retail shops. A critical factor in the escalating expenditure in R&D is the stringent regulatory setting for drug endorsement and thereafter approvals, hence longer time and larger funding required. Wyeth decided to redesign their drug discovery and development programs by creating a R&D Vision and Values in a new R&D productivity model. This model envisioned fresh objectives starting with a goal of annually submitting ‘two New Drug Applications (NDAs) for new molecular entities (NMEs) for regulatory approval’. This required a strict observation of deadline at each stage, whereby the discovery section was mandated to produce 12 new ‘development track’ (or Phase 0) compounds annually or one monthly. The next stage required the “Drug Safety and Metabolism and Chemical and Pharmaceutical Sciences file eight Investigative New Drug (IND) applications to begin Phase 1 clinical trials, which will result in initiation of 3-4 Phase 3 clinical programs every year.” (p.2). The company envisioned then that based on the average success rate within the industry, the R&D would be able to submit two NDAs for NMEs annually which would guarantee the success of the company. (Ruffolo, 2008) To ensure the success of this model, Wyeth R&D management adopted a best business practices model from other industries by utilizing a four-way medium. Firstly; crafting detailed and clear goals derived from the R&D Productivity Model that was implicit to the R&D staff. This entailed a well defined scorecard for the top 500 personnel in the R&D. Secondly; restructuring of the R&D department to augment efficiency and loyalty; thirdly: classifying prospective equipment and outsourcing to realize impressive proficiency; fourthly: establish a reward scheme for the top performers. As a final inducement to achieve their objectives and revolution, Wyeth launched several ‘Breakthrough Projects’ designed to stimulate the changes. This included drug detection within the first year of the renovation, then the pre-clinical and initial clinical tasks by the second year, culminating in the final clinical growth by the third year. Wyeth had launched over 40 of these Breakthrough Projects by 2008 which enhanced teamwork, advances, quality, and yield. Another company that has effectively restructured its operations to enhance productivity is Syngenta. With over 4000 employees around the world, the company invested $969 million (2008) in R&D within its five main plants and other stations committed to improvement in crop yields and enhancing quality. Syngenta utilizes varied projects from crop protection, seeds, and biotechnology. The company’s Seed Care program provides choice seed traits laced with compound treatment proving fortification to the seed ‘from the day it is sown’. Other innovations include drought resistant corn seeds capable of enhanced yield with minimal watering. The company is researching into integrating the gains in its ‘second generation trait technology’ and crop protection sectors however the lengthy development phase of chemicals is still an impediment. The company has improved international cooperation between R&D teams hence hastening product development and returns. These renovations include concurrent implementation of chronological development stages, setting up of information exchange through a global network called "Syngenta Science Live" and "Science Matters". In its biotechnological segment, Syngenta has enhanced the transformation of plants by inserting new traits in plants like the soybean technology which was developed within a year while dealing with intricate intellectual property right issues. (Syngenta-Global, 2009) At the GlaxoSmithKline (GSK) the R&D division, various tactics are employed to motivate employees. In the Focus on the Patient Program, R&D employees are encouraged to empathisize with the patients which persuade them to do more to improve their lives. In 2008, through 12 seminars having over 4,640 participants in attendance, patients joined GSK staff whereby the later personally encountered the “realities of living with illness” including “discussions on breast cancer, cystic fibrosis, HIV/AIDS, inflammatory bowel disease, schizophrenia, epilepsy, meningitis, hepatitis C, pulmonary hypertension, and idiopathic pulmonary fibrosis and migraine headaches.” (GSK, p.1). GSK has also encouraged the publication of scientific studies through the internet whereby an open forum is provided hence promoting innovations and bypassing the restrictive scientific journals. The firm has initiated the Clinical Study Register a simple online interface forum that assist the GSK and other researchers debate on the ongoing studies. At GPC Biotech, a biotech firm, latest hi-tech innovations are now used to link both the company’s internal employees with other internal and external researchers thereby enhancing faster and more comprehensive studies. Using Confluence a Wiki software the researchers are able to have a platform for analysis of various scientific projects, while also using the same to store and manage several experimental projects. According to Mingyi Liu at GPC Biotech, "Confluence serves a good niche where your main need is to store and share heterogeneous data without hassle for both scientists and informatics personnel." (Biotech, p.2) Confluence is used by the firm’s 220 employees with half in Germany; half in Massachusetts, and New Jersey, currently accessing the 1241 confluence pages. Conclusion With the prospect of further reduction in the R&D budgets, collaboration between private and public (universities), as well as outsourcing firms is vitally essential to ensure ongoing research that would otherwise stagnate. This can lead to less profitability within private firms, in addition to losses in innovative and advances in health and technological sectors. Companies have evolved novel methods of counteracting the reduced funding by introducing more efficient techniques which incorporate modern technology through sharing knowledge, patents, outsourcing to public universities, relocating to cross-border regional centers of research e.g. East and South Asia, and hiring expatriates from many countries. These measures have ensured continued progress in R&D progress globally, while operating on reduced budgets. Employees have also been highly motivated and streamlined to enhance their potential. R&D will therefore continue to flourish regardless of the current recession. References: Bartsev, A. (2008). Working Party on Biotechnology. Geneva: Organisation for Economic Co-operation and Development. Business-Insights. (2009). R&D Cost Cutting - Managing cost containment and safeguarding productivity. London: Charles House. Gaitonde, G. (2007). What Are The Best Practices In Managing Outsourced R&D Projects? New York: Xoriant Corporation. GSK. (2009, March). Case studies - Focus on the Patient programme (2008 Report). Retrieved July 27, 2009, from GSK Online: http://www.gsk.com/responsibility/clinical-research.htm Ruffolo, R. R. (2008). R&D Productivity: A New Way of Working At Wyeth. Wyeth: Russell Publishing. Syngenta-Global. (2009). Research & Development. New York: Syngenta-Global. UNCTAD. (2004). Fiscal incentives for R&D in Developing Economies. Geneva: UNCTAD. Read More