The Brain Drain
Assessing an inexperienced drug development workforce
By Steve Snyder
Before I address the topic of this month's article, it is important that you understand a couple points to help appreciate my perspective going forward. First, I detest "alarmists." You know these people; they seem more concerned about talking about what could go wrong than focusing on what is actually happening. They seem to draw energy from chronic worry only to find that the actual outcome of their concerns is often not as stimulating. I used to be a worrier in my younger days but age, life experiences, and my faith have helped me to be more "centered" . . . whatever that means. Accordingly, in writing this article, I am mindful not to be an alarmist but I will present some concerns that are shared by other industry veterans. The second point that you need to understand is that I have become my parents! I catch myself referring to those who are younger than me as "kids" and I have been known to say, "Back when I started in this business." I am also mindful that my goal in writing this article is not to validate my perception of my own self-worth but simply to share my opinions regarding the future of drug development just as my parents shared their opinions about life many years ago.
What my parents knew then and what I appreciate now is this thing we call "experience." You can't teach experience. For preclinical drug development, there are excellent university programs in toxicology, pathology and chemistry, but they don't teach experience. The most prestigious educational institution can't teach or prepare us for everything that we encounter during our careers. The value of "book smarts" is significantly enhanced by on-the-job experience. The medical community addresses this need through residency programs for doctors. Can you imagine having a surgical procedure conducted by a doctor who only had classroom training? While postdoctoral roles may afford advanced learning opportunities, they certainly don't provide the level of job experience that is valued in the industry today. Furthermore, there are no sufficient training opportunities for technicians, non-Ph.D. scientific staff, or even management. The only way to acquire job experience is to experience it. The problem in the drug development industry is that changing market dynamics have diminished or eliminated opportunities to gain this valuable on-the-job-experience in a somewhat controlled environment.
Wall St. assesses the value of Pharma and Biopharma companies on the profitability of their existing drugs and the potential of their drug development pipelines. CROs are assessed on their ability to fill their capacity and to control their costs. The demand for higher profits and new drugs has pressured sponsors and CROs to increase throughput and achieve successful outcomes. Over the last several years, these market dynamics have changed the business of drug development. Some Pharma companies have diminished their in-house preclinical research operations and reduced their workforce by opting to increase outsourcing to preclinical CROs. At the same time, we are now seeing experienced scientists retire after spending long careers in drug development. Not only are we seeing an industry trend that represents a diminished opportunity for on-the-job experience but we are also seeing the departure of those that could mentor the next generation of scientists, technicians, and management. Some would argue that this is not a problem because these Pharma and Biopharma companies are maintaining the same capabilities through outsourcing, but the CROs have their own challenges. Industry veterans that are in CROs will increasingly retire over time. As we will discuss below, the demand to grow and utilize capacity is so great that CROs are introducing new employees into "production mode" with minimal training.
In the late 1970's and early 1980's, the state of the drug development industry was such that new employees were slowly introduced into actual contributing roles. This was essentially an on-the-job "residency" program. For some technical staff, it could take as long as two years until they were considered to be thoroughly trained. Scientific staff needed to prove that they were capable of greater responsibility by demonstrating their competence with less important projects. Not only was there training but there was time for learning before these individuals were allowed to assume significant levels of responsibility. In the ‘90's and now in this decade, the pressure is on employees to go into "production mode" as soon as possible. On-the-job training that spanned years in the past has now been reduced to weeks. Don't get me wrong; I am not one of those individuals that yearn for the past. This is just a simple and accurate assessment of how training has changed over the years. Yes, there are elaborate training programs that generate lots of documentation but there is a huge difference between a "trained" employee and a proficient employee. Unfortunately, there are fewer and fewer individuals in management positions who understand this distinction. What's worse, the in-house "residency" programs in Pharma, BioPharma, and CROs have virtually vanished. Somewhere along the way, the industry sacrificed learning in exchange for increased throughput. Many of my consulting colleagues report that, like me, they are seeing an increase in quality issues that are directly linked to insufficient on-the-job experience.
Unfortunately, the situation is actually much worse. Life has changed. We are more mobile and more information is available to us than years ago. We have more career choices. Scientific and technical staffs are less likely to spend their entire career with one company and/or in the same line of work especially if they can make more money elsewhere. If so, it is possible that we may now be seeing an erosion of the institutional brain trust. In fact, I believe that it is only because some industry veterans still remain in drug development that we haven't seen more significant quality issues to date. These industry veterans are the "glue" that holds research operations together. As these individuals retire, those that replace them may not have experienced the same "residency" training. There are two concerns that will amplify this problem in the future. First, the state of the business is such that there are no more "residency" programs or opportunities for meaningful on-the-job-training. Secondly, and perhaps most frightening, is the adage that is known to many industry veterans: "You don't know what you don't know."
A career in drug development is a humbling experience because you are always learning, and those of us who have been around a while understand that. The problem is that the newer generation of technicians, scientists, and management not only lack sufficient on-the-job experience but they don't realize the magnitude of lacking it, so decisions are made that can adversely impact the development timeline of a potential new drug or the reputation of a CRO. If my contentions hold true, the industry will likely face more quality issues in the coming years while the new generation of drug development employees gains this valuable experience and the availability for mentoring from industry veterans dissipates. At the same time, companies will increasingly be challenged to stem the attrition of valued employees. The tenure for an individual in a technical role has diminished from an entire career to just three years or less in some cases. It is difficult for research operations to maintain consistent level of quality with a constantly changing workforce.
It is important to be clear that the brain drain is not just a sponsor problem or a CRO problem, but an industry problem. The concern is driven by a changing business environment and no one is to blame as long as measures are taken to address the issue. The most significant concern is that some management teams may not realize that this is a real problem. If you are in management at a sponsor company or a CRO, you are probably already experiencing these issues whether you realize it or not. Your challenge is similar to that of National Football League teams that deal with free agency. For you non-football fans, free agency is a program where players can move to other teams for higher salaries once their contracts have expired. How do these teams remain competitive when their roster can constantly change?
Many teams identify and retain key players through financial compensation. Since it is not financially feasible to do this with the entire team, newer, less experienced players are either introduced into game situations more slowly or they are introduced in a way where they are supported by veteran players. This same strategy can work in drug development but its success is directly linked to the effectiveness of the management team. If the management team gets it right, the optimal mix of personnel will deliver a performance like we saw from the Super Bowl champion New York Giants (sorry, New England fans). If the management team ignores concerns, assembles the wrong mix of personnel, or makes poor decisions, you can get a performance similar to the Miami Dolphins, which was the worst team in football last year. Do you know what the ownership of the Dolphins did at the end of the season? They replaced the operational management with industry veterans.
If you are a sponsor and are outsourcing work to CROs, you need to be aware of this industry brain drain. Strategic study monitoring will bring more focus to your studies from the CRO staff and it may provide you with the opportunity to do some periodic mentoring. Don't hesitate to engage consultants when issues arise that can't be fully addressed by your in-house scientific staff or the CRO staff. Many consultants have been in the industry a while and can help fill gaps in experience when necessary. If you are in a CRO, do everything you can to retain your valued employees and mentor new employees. Consider incentives for employees that remain with the company; you'll save a significant amount of money in recruiting and training costs. The very nature of the CRO business is subject to operational errors, so don't gamble with your success and reputation by ignoring the concerns raised in this article. Many times the difference between a championship team and an ordinary team is the departure of key players and/or the hesitance of management to address critical needs. Finally, be aware that sponsors aren't like loyal, diehard football fans. Sponsors will, and should, shift their business elsewhere if they experience a decline in performance at a CRO.
