Merck's Aftermath

| About: Merck & (MRK)

So the picture that's emerging of Merck's drug discovery business after this round of cuts is confused, but some general trends seem to be present. West Point appears to have been very severely affected, with a large number of chemists shown the door, and reports tend to agree that bench chemists were disproportionately hit. The remaining department would seem to be top-heavy with managers.

Top-heavy, that is, unless the idea is that they're all going to be telling cheaper folks overseas what to make, that is. So is Merck going over to the Pfizer-style model? I regard this as unproven on this scale. In fact, I have an even lower opinion of it than that, but I'm sure that my distaste for the idea is affecting my perceptions, so I have to adjust accordingly. (Not everything you dislike is incorrect, just as not every person that's annoying is wrong.)

But it's worth realizing that this is a very old idea. It's Taylorism, after Frederick Taylor, whose thinking was very influential in business circles about 100 years ago. (That Wikipedia article is written in a rather opinionated style, which the site has flagged, but it's a very interesting read and I recommend it.) One of Taylor's themes was division of labor between the people thinking about the job and the people doing it, and a clearer statement of what Pfizer (and now Merck) are trying to do is hard to come by.

The problem is, we are not engaged in the kind of work that Taylorism and its descendants have been most successfully applied to. That, of course, is assembly line work, or any work flow that consists of defined, optimizable processes. R&D has proven... resistant to such thinking, to put it mildly. It's easy to convince yourself that drug discovery consists of and should be broken up into discrete assembly-line units, but somehow the cranks don't turn very smoothly when such systems are built. Bits and pieces of the process can be smoothed out and improved, but the whole thing still seems tangled, somehow.

In fact, if I can use an analogy from the post I put up earlier this morning, it reminds me of the onset of turbulence from a regime of laminar flow. If you model the kinds of work being done in some sort of hand-waving complexity space, up to a point, things run smoothly and go where they're supposed to. But as you start to add in key steps where the driving forces, the real engines of progress, are things that have to be invented afresh each time and are not well understood to start with, then you enter turbulence. The workflow becomes messy and unpredictable. If your Reynolds numbers are too high, no amount of polish and smoothing will stop you from seeing turbulent flow. If your industrial output depends too much on serendipity, on empiricism, and on mechanisms that are poorly understood, then no amount of managerial smoothing will make things predictable.

This, I think, is my biggest problem with the "outsource the grunt work and leave the planning to the higher-ups" idea. It assumes that things work more smoothly than they really do in this business. I'm also reminded a bit of the Chilean "Project Cybersyn," which was to be a sort of control room where wise planners could direct the entire country's economy. One of the smaller reasons to regret the 1973 coup against Allende is that the chance was missed to watch this system bang up against reality. And I wonder what will happen as this latest drug discovery scheme runs into it, too.

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Tagged: , Drug Manufacturers - Major
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