As part of a package of stories about big pharma, BusinessWeek grabbed the ceo at four drugmakers - Pfizer’s Jeff Kindler; Bristol-Myers Squibb’s Jim Cornelius; Lilly’s John Lechleiter and Roche’s Severin Schwan - to discuss the varied and vexing problems the industry faces. Here are a few of their comments…

BW: What’s the solution to the lack of productivity in drug research?
Cornelius: It’s troubling in that the Food & Drug Administration is approving 18 to 20 [new drugs a year], but we’re spending about $60 billion on research. That equation doesn’t work. Something has to give. We’ll have to be selective in the R&D bets we make. We’re going to see companies working together more to address that R&D productivity issue.

BW: Is it better for a drug company to diversify into other endeavors, such as devices or consumer health, or is staying focused on prescription drugs the way to go?
Lechleiter: There was a time when many of us couldn’t shed our non-core assets fast enough. Lilly built up in medical devices in the late 1970s, but ultimately split off that business, Guidant. Now we’re pretty much a pure-play drug company with the exception of our animal health business, Elanco. I think some diversification is necessary and prudent. Now, we look at Elanco and ask: How can we build it up? Being in biotech is a form of diversification, too. But our diversification strategy is going to be very thoughtful. We don’t intend to build a devices business or anything like it again.

BW: What’s the solution to the lack of productivity in drug research?
Schwan: Our philosophy is that people need enough freedom to make decisions in a decentralized manner. One thing we have done in the last 18 months is to further decentralize our management model in pharma by creating five “disease biology areas.” DBAs set priorities and make portfolio decisions for their specific diseases. An interesting thing happened when we implemented this new structure: We saw them streamlining certain projects. Previously the portfolio decisions were made high up in the organization, so everyone was fighting for their own portfolios—they wanted to get as many of their projects financed as possible. Now these decisions are made a level down in the organization. That means decisions are made by people who are closer to the projects, so they are willing to invest more in what they believe in, and remove money from those less likely to succeed.

BW: The public has a poor image of drug companies. What can be done to improve that trust?
Kindler: What you have seen from many companies is a willingness to make changes in response to some of the criticism the industry has. We’ve made commitments about posting our clinical trials, we have supported some legislation that Senator {Charles] Grassley [R-Iowa] has proposed regarding disclosure of certain payments [to doctors]. This is not about words, it’s about actions. I like to tell people our business is asking people to put our products in their body. The people we ask to do that are entitled to demand that they [can] trust us. Every day we need to earn that trust.

For the rest of the answers, look here…