Chandler – GlaxoSmithKline
What is your assessment of Yamada’s proposal for the centers of excellence in drug discovery (CEDD)? What are its strengths and weaknesses relative to other potential organizational structures for R&D?
Yamada reorganization of drug discovery at GlaxoSmithKline (GSK) following a merger to combat bureaucracy in decision making, approval, and authorization. This reorganization was necessary for the continued success of the company. Often the process for drug discovery and market is a slow and tedious process which can cost a company a lot in resources and financially. The smaller biotech companies are able to move quicker and push new drugs to market faster. The shift, Yamada thinks, will help produce an entrepreneurial environment akin to a smaller, biotechnology outfit. This reorganization placed nearly 2,000 research scientists into six centers of excellence in drug discovery (CEDD). Each CEDD focused on a small set of therapeutic areas and possessed decision rights over the progression of pharmaceutical compounds through the early stages of development. These groups managed the pipeline from Lead Optimization through Proof of Concept. Each CEDD had full control over its own budget which could be spent internally or externally to deliver their best possible pipeline. The goals in each of these moves was to drive accountability deeper into the organization, reduce central oversight as much as necessary and foster a “biotech-like” atmosphere in a very large bio/pharmaceutical company.
Yamada concept is not unlike that of Medtronic’s in that R&D is being focused and funneled at the source of discovery or product development level. GSK was trying to reduce expense, create new drugs, and compete with smaller biotech firms. I agree with Yamada’s thinking that this will help produce an entrepreneurial environment akin to a smaller, biotechnology outfit. In many of the cases the need to...
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