Will Payments To Scientists For New Drugs Improve GSK's R&D Productivity?

It’s pretty hard for a former pharma R&D scientist to ignore the following article from The Sunday Times: “Banker bonuses for Glaxo boffins”.  Actually, I had to look up the meaning of “boffin” (British slang for a scientist or a technical expert). But the gist of the article is that GSK is planning to pay banker-style bonuses to R&D scientists if compounds that they discovered  reach the market. These awards won’t be trivial. According to the author, Matthew Goodwin, the GSK payouts could range from $7.5 - $15 million.

Awards to scientists are not unusual at GSK. Previously, GSK gave such bonuses based on a new drug passing certain milestones, such as when it entered human trials for the first time. However, that plan appears to have been scrapped and now bonuses will be awarded only when a drug starts to generate revenues.  Presumably, rewarding scientists based on milestone achievements didn’t enhance overall productivity.

It is not clear from the article how the size of each bonus will be determined. One would assume that scientists who discovered a drug predicted to have high sales would qualify for the $15 million pool, whereas those involved with drugs with smaller potential would be on the lower end of the bonus pool. Still, divvying up $7.5 million is a pretty nice prospect.

I am all for recognizing scientists in this way. After all, they must be successful in order for a company the size of GSK to have a sustaining pipeline. However, the drug R&D process is really a team effort and not driven by an individual. The inventor whose name is on the patent is generally the chemist or chemists who designed the molecule that had the necessary biological activity. Rarely, however, are chemists the major contributor to the program’s success. Oftentimes, it is a biologist who conceives the essence of the program by the scientific insight he or she might have. The discovery of Pfizer’s Xeljanz is such a case.  There have been major classes of drugs that have been saved by toxicologists who ran insightful animal experiments to explain aberrant events in rats as was done by Merck with both the statins and proton-pump inhibitors – two of the biggest selling classes of drugs of all time.

On occasion, the key person in a drug program is the process chemist who has designed a synthesis of the drug that is amenable to the large scales of material needed to conduct clinical trials. Clinical trial design can also be crucial, particularly when studying a drug with a totally new mechanism of action. A faulty trial design can kill any program. Even a nurse involved in the testing of a drug can make the key discovery, as happened in Pfizer ’s phase 1 program with Viagra, where the nurse monitoring the patients noticed that the drug was enhancing blood flow to an organ other than the heart. To paraphrase Hilary Clinton, it takes a village to discover and develop a drug.

In my old company, when a drug was approved, the key people involved were, in fact, rewarded with stock. The amount allotted was generally enough to recognize 4 – 5 scientists meaningfully for their contributions to the new product. From personal experience, I can say that these were not simple discussions. Trying to provide appropriate recognition in such a team endeavor is hard. When the stakes are much greater, as GSK is proposing, these discussions will be very intense.

Nevertheless, it would still be wonderful for 10 scientists to share in a $10 million bonus pool for the launch of a new medicine. But I wonder if these bonuses will have the impact that GSK hopes. The banker bonus model is based on people being recognized for work done the previous year. The same is probably true for bonuses given to the GSK sales force. However, the scientists who will be in line for these awards, particularly those who are involved in the earliest stages of the R&D process, will have made their contributions 10 – 15 years before the drug is on the market.  It is possible that these key individuals may no longer be with the company when the drug launches, thus making them ineligible for any award. This, in fact, happened with the biologist who was the initial driving force on Pfizer’s Xeljanz program. While the potential for a large bonus is a great carrot, that carrot is on a stick that is pretty far in the distance.

Finally, scientists are an extremely highly motivated bunch. They are driven by making use of their scientific talents to create something that could benefit millions of people around the globe. I don’t think the prospect of a large windfall at the end of this process will cause them to work harder. They are already incredibly dedicated.