Merck Move Shows Industry Adrift on Leadership Expertise

Slowly, surely, the need for biomedical expertise in healthcare leaders is being realized, at least in the investment community. When will hospitals and managed care organizations begin to understand the same lesson?

Merck Move Shows Industry Adrift

By Melissa Davis

Senior Writer, TheStreet.com, 5/9/2005

When Merck crowned a new CEO last week, some disappointed investors saw fresh evidence of an entire industry that has yet to get its priorities straight.

Merck chose an insider without a background in medicine at a time when observers agree that the company desperately needs to focus on developing new drugs. Moreover, Merck made its selection even after its glory faded under a previous nondoctor, Ray Gilmartin.

Richard Clark, tapped last week to replace the embattled Gilmartin, is no master of drug research or even the marketing activities that, to the dismay of some, now seem to drive the industry. He has instead spent his 33 years at Merck concentrating on such areas as manufacturing and information technology.

"That was the best they could get?" asks Peter Cohan, an investment strategist who praises Merck's last physician CEO -- Roy Vagelos -- in his book The Technology Leaders. "It is hard to see how a manager lacking experience in drug development can help revive the critical pipeline of new drugs that contributed to the success of this once great company."

Further, provocative opinions in the article on the clinical trials process may shed some light on why there are few medical informatics specialists in pharmaceutical leadership roles. The field may be viewed as too critical of data manipulations:

... Public leaders have begun to question how companies manage to gain regulatory approval of drugs like Vioxx and then turn them into wildly profitable blockbusters. And they have come to recognize the industry's incredible influence -- over drug development, approval and even consumption -- in the process.

Vera Hassner Sharav, president of the Alliance for Human Research Protection, has been warning about such powers for years.

"The companies design the drug trials," Sharav says. "They select the subjects. They maintain and interpret the data. They select which parts get published. They choose who will become the reviewers in the prestigious medical journals. And they pick 'key opinion leaders,' who they pay handsomely" to promote the drugs.

"It's perfect," she concludes. "They have it made."

Read the whole thing.

-- SS