Lilly’s Lechleiter, Science Jobs And A Disconnect
36 CommentsBy Ed Silverman // July 19th, 2010 // 11:48 am
For the past few weeks, Eli Lilly ceo John Lechleiter has been making the rounds talking about the problems facing the big drugmaker and the pharmaceutical industry, in general. In a word, the issue is innovation. One point he keeps making is that America’s schools need to improve science education and US immigration laws need to change to allow top scientists from other countries to work here.
“…I’m concerned there are a number of things today that are working against that spirit of innovation. One is the fact that we’re falling behind with respect to science and math aptitude among grade school, high school students. We also need to expand the number of visas that we’re able to allocate to non-U.S. citizens who want to stay in this country and work in these high-tech industries and start-up companies,” he tells USA Today (also take a look at this).
There is an irony in this. Lilly, after all, is shuffling numerous scientists out the door as part of the same consolidation trend gripping its peers. And the drugmaker is also outsourcing various R&D operations as part of its ongoing downsizing - two years ago, Lilly sold its Greenfield Labs site in Indiana and transferred operations to Covance, the contract research organization (back story). Emphasizing science education and science as a career is important and should be supported. But there seems to be a disconnect. Granted, some specialties are in greater demand than others, but the answer to the problem is…hiring scientists who are younger or from other countries?
Mike Wokasch
I don’t see a disconnect at all. Innovation in drug discovery is not driven by development operations infrastructure (outsource opportunity like Covance situation mentioned). Innovation,however, requires basic science and medical expertise, not just somebody with a PhD who knows how to do something scientific.
Sorry for the sports analogy but lots of people play golf, some are really good and have won lots of tournaments but that doesn’t mean they can play or much less win in the PGA. Just having a life sciences PhD doesn’t necessarily mean you have expertise that will deliver or has the potential for delivering innovative new drugs. At the same time it doesn’t mean you are a bad scientist, you just may not have expertise or the level of expertise that is needed.
Unfortunately, over the past several decades, pharmaceutical research got heavy on operations and light on expertise as they were able to tweak molecules and acquire technologies when they couldn’t discover the innovative products themselves. Now the industry needs innovation and realizes the importance and value of real expertise which is rarer than we would like to admit and the real scientific expertise that exists is diluted across larger organizations, more companies, more universities, and more government agencies. http://www.PharmaReform.com
Ed Silverman
Hi Mike,
Thanks for the note and the point you made. As an aside, I wasn’t restricting my comments to those holding a PhD, but was referring, more broadly, to any qualified scientist, regardless of the specific education, training or experience.
Again, I realize there is greater demand for some scientists more than others, but I would imagine it can be maddening for unemployed pharma scientists to read Lechleiter’s remarks when xx number of these folks may have the sort of experience that would, in Lechleiter’s mind, make the industry more innovative and competitive.
In any event, thanks for stopping by.
ed
Mike Wokasch
Ed,
I also should have pointed out that you don’t need a PhD to have expertise. Thanks for the opportunity to comment. Mike
pharmavet
Today it costs an aspiring PhD candidate approximately $200,000 to $300,000 for a 5-7 year doctoral program. Given the cutbacks in grants ans scholarships I can count on one hand the number of American born citizens that can afford that. On the other hand, my grad school roomate was from Mexico, and his government paid 100% of his costs to obtain a PhD in Environmental and Water Resources Engineering. He went back to Mexico and is now a high ranking governmental official. The US got zero out of the deal. The trend has stayed the same over the years, and if continued, I see little to no prospects of American dominance in science.
Lechleiter and I were in grad school at the same time. We were both in private schools. Even without a scholarship or tuition assistance I would guess that JL probably paid no more than $20,000 to earn his degree. Like me, he got a good paying job right out of school and was probably able to pay back his loans within 5-10 years.
The possibility of that ever happening again in the US is slim to none.
Christopher
Pharmavet - would be interested in a rough breakdown of that 5-7 year $200,000 - 300,000 estimate.
MLF
$200,000-$300,000 for a science PhD? That is simply not the norm. The vast majority of PhD students not only have major tuition waivers, most also receive a “livable wage” stipend. This is one of the big advantages of getting a PhD in a health science field - decent funding from the NIH and other agencies.
SteveM
Re: “We also need to expand the number of visas that we’re able to allocate to non-U.S. citizens who want to stay in this country and work in these high-tech industries and start-up companies,”
John Lechleiter is the CEO of a company whose pipeline stinks and whose profits come largely from the off-label marketing of toxic me-too psychotropic drugs, (Zyprexa and Cymbalta).
Lechleiter is making just another specious argument for cheap, compliant H-1B labor. As if the 65,000 H-1B’s are all little Einstein’s. Most of the H-1B slots are filled by pedestrian technologists with no special or superior skills.
The fact of the matter is that H-1B program wildly disincentivizes native born American students from studying science and engineering by driving down wages in technology fields.
And the prevailing wage argument is totally bogus because the H-1B’s very presence depresses wages by the simple law of labor supply and demand.
Given the fact that the Internet and automation are crushing traditional soft white-collar jobs that have been done by native-born Americans, those young people have to be redirected back towards science and technology.
Making them compete against an onslaught of new, unexceptional H-1B’s who will work for cheap for a green card makes absolutely no sense. Except to the Crony Capitalists like Lechleiter that want them.
CRH
Yeah, I don’t know where pharmavet came up this number…but I hold a Ph.D. in chemistry and didn’t have to pay anything for that degree. With research and TA stipends, tuition is covered and there is a “living” wage. Not one single Ph.D. in any physical science discipline do I know that “spent” any money getting their Ph.D.’s. Undergrad, maybe, not their doctorate/post-doc.
Former industry scientist
Could it be that Pharma CEOs lack the ability to see past their own noses? When John has the courage to break from the herd and divert a significant portion of the gobs of money Lilly spends on shady (and sometimes illegal) marketing practices, and invests it in R&D for scientific innovation, then he will find out if US is truly lacking in scientific resources.
BTDT
define innovation, incremental innovation, major innovation
to be a pro one is usually better than the run of the mill amateur, and then there are better players within the pro ranks.
Pharma has Gantt charted the conception to launch, fit in or get out is the accepted dogma.
and how often is major innovation a result of incremental steps?
A Real Doctor
200 - 300 K and 5 - 7 years in my opinion is not unreasonable. I went back for a PhD in the # 1 program in the country which took me 7 years after already being a Doctor with fellowships and with an undergraduate degree in a field in which I could have made more money than I came out making with my Ph.D..
Even though I was paid a stipend to attend grad school (~10K per year) and didn’t accumulate any more debt. I still gave up millions in lost income for both doctorates years of making a significantly higher income as well as the loss of investments. Not to mention working 80 - 100 hour weeks for 16 years (before graduation) and 60+ hour weeks afterwards instead of the 40 - 45 hour weeks I could have worked with my bachelor’s degree. When you figure in everything going to grad school probably cost me several million dollars not to mention all the losses in my personal life.
Plus I know many marginalally competent as well as incompetent individuals who remained in the US on H1-B visas who harassed exceptional native and naturalized US citizens (H1-B also) in order to promote their own careers. Typically it’s these individuals who I have seen people like Lechleiter reward as they will do anything CEOs need done to make money from dangerous and ineffective drugs.
pharmavet
Here are the estimated fully loaded costs for a seven year PhD program where I graduated from, along with the estimated cost of living expenses for the city where my school is located, and based on the 2009 Graduate School Handbook:
Tuition: 72 semester hours required, at $1625/semester hour. Total tuition cost = $117,000
Rent, Food, Transportation, all included = $18,000/year. Cost for 7 years = $126,000.
Minimum total cost = $243,000.00
pharmavet
Real Doctor, for whatever it is worth, you may have lost millions in future income by getting your PhD, but you paid your dues in full to join the club. There are very few people who can claim that. I personally believe that your entry into the Community of Scholars afforded by your PhD is something that money can’t replace.
Christopher
It seems that the more one pays for education in the US the more that degree, or degrees, justify its cost.
Apparently memebership of some Community of Scholars is woth someone else’s investment of thousands and loss of millions in future earnings.
And H1B holders are lowbrow, drooling incompetents shipped in under cover of darkness to steal jobs from highly qualified, and deeply indebted US candidates who deserve a job.
Perhaps the focus here should be the US education system and its protracted, fee-earning model which does no favors to anybody except the institutions and lenders who keep a 4 year bachelor’s program where man yother countries manage in three; and a meaningless senior year in high school.
Sputnik
To me, Lichleiter is just using the educational system (easy target) as a scapegoat to rationalize pharma’s pipeline problems.
Lerxt
Hi all,
I’m not callous by nature, but I’ve driven from NJ to Indiana. I’ve been inside the Lily plant and my friend lives 30 minutes north of Indianapolis.). Taking your bottom lip and pulling it over your head would be less tortuous than driving through Pennsylvania. Then I got to Ohio. Other than advertisements coupling an oil change and T-bone steak for $17.99, after the sixth or seventh silo in, the radio was an eerie source of scatalogical goo mixing Evangelical nonsense with advertisements with ads or public advertisement spots on the increasing rate of illiteracy.
I don’t mean to sound harsh, but you need to be literate before being a scientists. Those in the industry know the volumes of SOP’s are very long to get through, then they must be followed.
Silos - the undiscovered savior of the world.
I don’t know either.
~ Lerxt
likeitis
PV: to paraphrase:
‘Your room-mate from Mexico paid $200-300k to obtain a PhD and then went back to Mexico.
The US got zero out of the deal.’
My take:
The *US* got $200-300K and made as much money as possible out of this guy while he was here, and takes no responsibility for any *consequences*
Many people would probably consider this neatly embodies the American ideal of freedom to prosper, and let the *consumer* beware (in this case, whether he was taught anything useful or even *correct*).
The mulish financial community surely loves this short-term immediate bottom line benefit business concept (and let ‘the future take care of itself’).
Hey! Let’s get a whole load of bright foreign kids into the universities, to improve the financial health of these institutions. No scholarships or *assistance* for the foreign students, and they will not even cause any debt balloon because their governments will pay their bills!
Wait a mo! Haven’t we already been doing just that for the last 40 years or so……
So what’s new John?
Except maybe increased awareness of the true meaning of the phrase ‘pay now or *pay* later’?
BTDT
as regarding Lilly- is the problem innovation or risk aversion? Lilly managers have a lot to protect. The protection and safety of what is against the possibility of what could be. They are in the midset- the cost of failure is greater than the reward of success. Spending on cost cutting against playing off opportunities of existing expertise…etc. Every drug has warts, nothing is perfect and shouldn’t be marketed as such.
harpy
that’s funny - I don’t remember a peep out of Lechleiter when former Lilly executive and current Indiana governor Mitch Daniels cut $300 million from the state’s K-12 budget. Lilly certainly won’t be finding workers with science and math aptitude in its home state for a while.
pharmavet
Harpy, most of Lilly’s scientists are not home grown, at least at the top level. These folks are recruited from Big Pharma cos. elsewhere, and Lilly can make it very attractive to come to a low cost of living city like Indianapolis. The talent marketplace is global in nature. K-12 budget cuts will not dent Lilly’s ability to recruit key personnel.
CRH
So, pharmavet:
”
Here are the estimated fully loaded costs for a seven year PhD program where I graduated from, along with the estimated cost of living expenses for the city where my school is located, and based on the 2009 Graduate School Handbook:
Tuition: 72 semester hours required, at $1625/semester hour. Total tuition cost = $117,000
Rent, Food, Transportation, all included = $18,000/year. Cost for 7 years = $126,000.
Minimum total cost = $243,000.00″
You actually PAID this amount for your Ph.D.? You didn’t receive free tuition due to either being on a research stipend or TA stipend? You had to take out $243,000 in loans to cover all of that? If you did, I have never heard of this before. Again, I hold a Ph.D. and have worked in the pharma industry for ~10 years and know NOBODY that had any actual out-of-pocket costs for their Ph.D. Tuition/insurance paid by the advisors grants or from having to TA, rent, food is covered under the stipend (14K/year for me - not much but could get by).
I just simply don’t believe your cost analysis and believe you put out there simply to make your point.
Christopher
Is PV saying that a Ph.D student takes 10 semester study hours per year? Ten??
Justice in MI
Although a native East Coast snob, I must take exception to Lerxt’s trashing of the midwest. It is true that driving across Pennsylvania is a polite form of waterboarding. But PA is not part of the midwest.
Wander Indiana, man!
Lilly_veteran_scientist
I cannot disagree with Dr. Lechleiter on the topic of contributions of H-1B scientists. Everyone who has been through graduate school knows that making recommendations about students is often recklessly positive to obtain good statistics for one’s students and create a global alumni network - in some countries more than others. I have personally worked in a laboratory where an immigrant scientist would spend up to three hours per day reviewing the work of others (”anonymous peer review” is complete B.S., everyone knows exactly who authored work) and giving recommendations and referrals. Of course, most of this happened in their own native language. More than this I cannot say - but what other criteria does HR have to go by than the referrals from one’s network from a foreign university. This is really dangerous talk, and with all of the “IP leakage” from the U.S. during recent years, one should be a little more “results oriented” and judge folks by their RESULTS - there would be no pipeline issues if people were judged by their RESULTS, not by praise from abroad.
pharmavet
Christopher, most of the 72 required semester hours are completed in the first two years of required coursework. At that point, the student takes qualifying examinations and presents his/her dissertation proposal to the committee. Once approved, generally the next 3-4 years are spent in the laboratory under the supervision of the Dissertation Advisor. The final year is spent writing the Doctoral Dissertation, which took about that long in my case since it ran 237 pages. The final step is the Public Defense of the Dissertation, then the secret handshake and you are in the club. No muss, no fuss.
Hope that clarifies.
pharmavet
I agree with JiM. Maybe people think that Pa is in the midwest because Penn State plays Big Ten Football. Experience the rolling hills of western PA or southern Indiana and nothing compares. Take a trip to the UP of Michigan in the winter. It can’t be beat. Sail from Chicago to Mackinaw Island, MI, that can’t be beat either. Explore Door County, WI and beautiful Green Bay and Lake Michigan.
Having grown up in Northern Illinois I always lived no more than 3/4 of a mile from Lake Michigan. Nothing beats going down to the Lake in mid-February and see the Lake frozen with the white whorls of the gentle current frozen in time. Yep, nothing beats the midwest.
pharmavet
Admittedly Indiana had one screw-up in the 1990’s. They had a contest to rename the license plates and the slogan chosen was “Amber Waves of Grain”. The only problem is that grain is not an Indiana crop. Guess it sounded better than “Amber Waves of Soybeans”.
Christopher
Thanks PV; I admire your stamina. Most of the Ph.Ds I have worked with and employed seem to have completed the requirements in well under 7 years, hence my question.
The comments from many others here who hold Ph.D degrees (and those who have not commented publicly) suggest that third party funding was behind their endeavors, and so I wonder if there was a requirement to get on with it and get it done rather more quickly.
Justice in MI
I don’t know the percentages, but, in general, PhD students (in humanities and social sciences, as well as the nat scis) pay little or nothing for tuition compared with undegrads, which is the tuition money crucial to most colleges and universities (and often back-breaking to students and/or their parents).
As many of you know well, not true for professional schools, whether med, biz, law, etc..
pharmavet
Christopher, I actually completed the degree requirements in five years, but my department chairman got a couple of extra years of slave labor out of me. Even without the MS degree, he was philosophically opposed to anyone getting their PhD in less than seven years.
Some PhD students take much longer. Note the case of Theodore Streleski a math grad stduent at Stanford in the 1970’s. When old Ted failed to get his math PhD after 19 years, he killed his advisor, Dr. Karel DeLeeuw with a Bal Peen hammer. Probably a good incentive to push your students through a little faster.
pharmavet
Christopher, seven years is long, but calls to mind the case of Theodore Streleski, the math PhD student at Stanford, who killed his professor, Dr. Karel Deleeuw with a Bal Peen Hammer when old Ted failed to earn his degree after 19 years in the department.
In my case I was all done after five years, but my dept chairman kept me on an extra two years as a source of cheap labor since he was philosophically opposed to anyone getting a PhD in molecular biology in less than seven years. Actually seven year PhD programs in the sciences, even without an intervening MS degree are not all that rare., esp in molecular biology, where simply developing your methodology can be painstakingly long. In other disciplines providing new knowledge alone will earn you the ducat; in Mol. Biol. you are also expected to develop new methodologies as well.
Justice in MI
I have the sad distinction of having taken eleven years; partly because of the number of hours I had to do paid work while writing dissertation and partly because of the project I was doing. Everyone told me, “don’t
make the dissertation your life’s work.”
As it turns out, the dissertation became my life’s work.
pharmavet
JiM, my dissertation also became my life’s work. As they say, timing is everything. My research involved studying cholesterol metabolism at the same time that this new class of drugs called statins was being investigated. The rest was history.
On the other hand, history has not been as kind to the PhD disseration of Alan Greenspan, which was apparently completed in a matter of months (major exception to the seven year rule), and disappeared from the NYU Library some time ago. As economist Robert Auerbach writes in his book about Greenspan (”Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan’s Bank”), “Greenspan’s 1977 Ph.D. from New York University was obtained in a few months with little more rigor than a matchbook-cover art degree”…
Furthermore, according to Auerbach, who obtained his PhD at U. of Chicago under Milton Friedman, “Greenspan’s invisible Ph.D. thesis is symbolic of a career marked by prevarication, cover-ups and a general aversion to making the Fed more publicly accountable.”
Guesss it explains why Greenspan’s tome is probably buried in his sock drawer at home.
Alan Greenspan
The predicitive power of dissertation size from a policy perspective resides in the metrics with which or by which one chooses to assess the value of the variances through which one posits as relating to the dimensions of the quanity of assets over and above the primary relationship to which we earlier referred.
pharmavet
Thanks for the clarification, Alan.
Alan Greenspan
You’re welcome. I am always willing to provide clarification on the relative consideration of options to which attention may be aid in anticipating contingencies about which alernative paradigms may be applied in the context of absolute and relative valuation within the parameters pertaining.