Thursday, May 05, 2005

How About A Drugmaker for Merck?

In many of my writings and postings I've called for leadership of clinical IT by people who understand both medicine and computing. The same requirement for domain expertise holds true for all areas of healthcare.

It seems Forbes understands the concept of leaders actually knowing what they're leading. In my mind, 1,000 generic people following the finest of process will aways be outperformed by one person who actually knows what they're doing (i.e., has expertise in their domain).

How About A Drugmaker for Merck?
David A. Andelman, 05.05.05, 1:45 PM ET

It's all about the buzz. A flashy resume and some star quality seem to be the most sought-after line on executive résumés these days when it comes to choosing a new leader for a company in trouble. The latest example is Richard Clark, onetime head of Merck pharmacy spinoff Medco. While he has a long tenure at the parent company, most of it was in marketing and manufacturing. He left new drug creation to others. Just like longtime Merck CEO Raymond Gilmartin, an electrical engineer by training, Clark will be leaning heavily on Merck's chief of research, Peter Kim, for the next generation of drugs that may help to put the Vioxx catastrophe behind the drugmaker.

Indeed, investors seemed underwhelmed by the choice. Merck shares were off a dime at midday Thursday. Whatever happened to the old corporate model--in which the guy who ran the company at least understood the ingredients of what it was making? Steve Jobs and his partner Steve Wozniak are legendary for cobbling together their first Apple in a Silicon Valley garage, not far from the garage where David Packard and William Hewlett had already launched Hewlett-Packard.

Bill Gates got his start writing software code in his dorm room at Harvard before he decided he'd be better off doing that for a living rather than going for a diploma. Jobs managed, by sheer genius and force of personality, or perhaps by transmogrification into a marketer, to avoid having someone hijack his company. Packard and Hewlett weren't quite so lucky. Their idea had to suffer through the hubris of a marketing guru named Carly Fiorina--and we all know what happened to her.

(Other examples cited)

... The moral of this story? It's the medium, not the message. Matching the man or woman with the mission is the essence of success in the corporate suite. In the final analysis, the prescription Merck [and other pharmas] really needs just may be someone who knows how to create drugs.

I agree.

Then again, another industry observer writes:

Noting that Mr. Clark does not have a medical or research background, Dr. Moskowitz [David Moskowitz, an analyst with Friedman, Billings, Ramsey & Co.] added, “In the past, Merck’s pride came from its research labs; however, the choice for CEO may indicate a different focus.”
This would likely mean acquisitions (or being acquired) rather than home-grown research. If this is true, it is a shame considering the historical reputation of the company as world-class research innovator. However, the recent closure of one of the two major internal science research libraries would fit with Moskowitz' analysis. (On the topic of leadership expertise, not long before the 2003 layoffs I had to explain to a computer executive with significant control over research support resources, including the libraries, why the discovery of the thiazide diuretics in the 1950's was so important.)

-- SS

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