These days, research scientists, much like Rodney Dangerfield, can’t get any respect. The latest evidence of this arrived on Friday, when AstraZeneca (London) proposed to cut 3500 research and development (R&D) jobs by 2014.
The job cuts are part of AstraZeneca’s restructuring program, the goals of which are to cut costs and achieve an “effective and flexible R&D operating model.” In a report of the company’s 2009 annual results, Anders Ekblom, executive vice-president of development, said AstraZeneca would focus investment on “prioritized disease areas.” This might be the strategy for achieving “effectiveness.”
After the in-house R&D employees are let go, AstraZeneca will hire contractors to discover and develop drugs, presumably to attain the desired “flexibility.” Observers say that firms in China, Europe, and the United States likely will be beneficiaries of this strategy, according to in-Pharma Technologist. This could be an opportunity for scientists unfortunate enough to be dismissed from Wyeth (Madison, NJ) and Schering-Plough (Kenilworth, NJ) during the consolidations that have followed the acquisitions of these companies. AstraZeneca’s plan might provide a glimmer of hope for scientists in my home state.
But why are R&D workers being shown so little love? One theory is that AstraZeneca’s plan is partly intended to reduce the effect of generic competition. Money budgeted for in-house R&D could be used to realize AstraZeneca’s stated intention to add more branded generics to its portfolio. That’s plausible. Asthma drug Pulmicort and breast-cancer treatment Arimidex will both lose patent protection in 2010, which will be two blows to the company’s bottom line.
Still, I can’t help but be skeptical about the wisdom of the company’s plan. Cutting R&D jobs to invest in branded generics might boost AstraZeneca’s revenue stream in the short run. But the company will still need to discover and develop innovative products to remain competitive. As I recently wrote, outsourcing R&D might not be the best way to discover new products. In this competitive economy, sponsors might choose to work only with discovery teams that can prove that their drugs will be successful. Likewise, contract researchers are less likely to spend money on potentially groundbreaking research if the risk of failure is high.
Tight funding will favor conservatism in R&D, which is not likely to yield promising or exciting discoveries. Unless the economy improves, or AstraZeneca’s outsourcing plans prove disastrous, it may be a while before R&D scientists get their props.