Cracking the Whip at Wyeth
Case 4: Cracking the Whip at Wyeth
Wyeth is one of the world’s largest research-driven pharmaceutical and health care product companies. It is a leader in the discovery, development, manufacturing and marketing of pharmaceuticals, vaccines, biotechnology products and non-prescription medicines.
Case synopsis
When Robert Ruffolo was appointed executive Vice President for R&D at Wyeth, he was given the mandate of shaking up the drug maker’s mediocre performance in that division. His controversial changes included establishing quotas for how many compounds must be churned out by company scientists. Bonuses were held hostage to managers’ meeting of their quota. Wyeth’s problems are reflective of those plaguing its industry. New drug development is down 47% from its peak during the late 1990’s. Ruffolo wants to bring greater efficiency to the innovation process by instilling tougher discipline as a means of increasing productivity. Although his approach has critics, analysts say that Wyeth’s pipeline has shown major improvement.
Robert R. Ruffolo Jr.
Shake up the drug maker’s mediocre research and development operation.
$2.7 billion research operation
Established quotas
Bonuses were held hostage to managers’ meeting of their quota.
New drug development was down 47%
Greater efficiency to the innovation process by instilling tougher discipline.
Wyeth’s pipeline has shown major improvement.
SWOT Analysis
Internal
Strengths
Weaknesses
Scientists were encouraged to focus on projects that were the safest
This system forced scientists to end troubled projects earlier in the transformation process, which in return saved time and money.
Brought increased anxiety in scientists
Encouraged scientists to overlook problems with some compounds in order to make their numbers.
External
Opportunities
Threats
Wyeth’s pipeline has improved, with a number of potentially hot selling products likely to hit the market within the next few years.
FDA approval
Wyeth is one of the world’s largest research-driven pharmaceutical and health care product companies. It is a leader in the discovery, development, manufacturing and marketing of pharmaceuticals, vaccines, biotechnology products and non-prescription medicines.
Case synopsis
When Robert Ruffolo was appointed executive Vice President for R&D at Wyeth, he was given the mandate of shaking up the drug maker’s mediocre performance in that division. His controversial changes included establishing quotas for how many compounds must be churned out by company scientists. Bonuses were held hostage to managers’ meeting of their quota. Wyeth’s problems are reflective of those plaguing its industry. New drug development is down 47% from its peak during the late 1990’s. Ruffolo wants to bring greater efficiency to the innovation process by instilling tougher discipline as a means of increasing productivity. Although his approach has critics, analysts say that Wyeth’s pipeline has shown major improvement.
Robert R. Ruffolo Jr.
Shake up the drug maker’s mediocre research and development operation.
$2.7 billion research operation
Established quotas
Bonuses were held hostage to managers’ meeting of their quota.
New drug development was down 47%
Greater efficiency to the innovation process by instilling tougher discipline.
Wyeth’s pipeline has shown major improvement.
SWOT Analysis
Internal
Strengths
Weaknesses
Scientists were encouraged to focus on projects that were the safest
This system forced scientists to end troubled projects earlier in the transformation process, which in return saved time and money.
Brought increased anxiety in scientists
Encouraged scientists to overlook problems with some compounds in order to make their numbers.
External
Opportunities
Threats
Wyeth’s pipeline has improved, with a number of potentially hot selling products likely to hit the market within the next few years.
FDA approval