‘In India, I’m interested only in tie-ups, not buys’, Robert R Ruffolo

An avid heavy-metal music buff, Robert R Ruffolo, 55, president, Wyeth Research & Development, handled over $3 billion spend on research & development in 2006 at Wyeth Pharmaceuticals, the fourth-largest pharma company in the US.

Joining Wyeth Research & Development in 2000 after a 17-year stint at SmithKline Beecham, Robert R Ruffolo shocked the world by setting quantitative targets for new drug discoveries and rewards for “shooting the dead horse” to encourage scientists to kill long-pending discovery projects that showed little promise.

He also went ahead and did the unthinkable — outsource core R&D to countries such as India which today accounts for 30% of Wyeth’s R&D capacity. Ruffolo has borrowed a lot from the IT industry and the results are evident.

At a time when the drug industry is short on new molecules, Wyeth has no dearth of such compounds. The veteran scientist spoke to DNA Money’s C Chitti Pantulu on a host of issues from new discovery models to India’s place in global R&D.

Some of the major challenges for the global pharmaceutical industry are “drying pipelines” and lack of innovation. How serious is the situation and where do you find India figuring in a solution?

Drying pipelines is not a problem for Wyeth. Seven years ago, we set up a new R&D productivity model under which we set ourselves a target of two new drugs in the market every year.

Working backwards on known success and failure rates, we have arrived at a need for 15 new drug discoveries every year.

The next function is to turn these into 12 investigational new drugs (INDs) to start 12 phase I clinical trials. The next step is to turn these 12 into three phase III trials if we are to have two new drugs in the market every year.

Everybody in the company knows this 15-12-3-2 formula and everything we do revolves around it.

As a result, our pipeline today is huge and over the next several months we will be taking seven drugs into phase III trials some of them probably going on in this country. And that brings us to India and what we are doing here.

Very few people realise that apart from the 7,000 odd R&D people in the US, we have a 1,000-plus exclusively for Wyeth in India. Apart from GVK bio deal that we are talking about today, we also have an enormous deal with Accenture.

Wyeth was the first to outsource clinical data management some four-five years ago. And we received a lot of criticism for that from my peers in the industry said it was a crazy thing to do. But today we see that they are doing the same.

Why we got it right is because we realised that not everything, we do is core to our business and not everything that we do can be done better by us. There was nothing wrong with our clinical data management, but it was not enough as our pipeline got bigger and bigger. We couldn’t manage it.

When we looked around, we found that what Accenture was doing for banks and airlines, was basically clinical data management but it involved dollars and cents, passengers and flights. But it could as well be millimeters of mercury, blood pressure or anything else.

We made what was though a bold move but not a very smart move and totally outsourced clinical data management to Accenture. We outsoruce all clinical data management to Accenture which also manages the India Clinical Research Centre (ICRC), apart from taking care of our training needs.

We actually want to own less and if there is something other people can do better than us it is best left to them and hence GVK. Though people are unhappy that Americans lost jobs actually, Wyeth R&D grew when we shifted work here.

It is still an emotional issue in the US but the fact is we have to find a better way to do things and I owed it to our shareholders.

While this may help you in speeding up R&D and taking care of quality, the core issue still remains — that of faster innovation and seeing more drugs in the market?

We outsourced to India not necessarily to speed up processes but to avoid slowing down more. In our case our compounds were not progressing for lack of clinical data management. So we came to India not for saving money but for capacity. Our deal with GVK Bio increases our chemistry size by 30% and that is huge.

All the outsourcing we did was to find capacity that we could not have or could not build. It allows us to maintain the 15-12-3-2 equation. If we didn’t do what we did the drugs would still be sitting in the pipeline.

The USFDA has found Wyeth wanting on data, isn’t it? In fact it has held back approval for three of your drugs. Does this not prompt you to actually own what you outsource?

What the USFDA said is not that we did not have enough data. The FDA is being battered right now, by the US Congress, the media by certain medical journals and so on. They have circled the wagons and still taking decisions on science and medicine but also based on the political climate.

Talking about our own drugs the FDA has asked us for one more clinical trial. That does not mean we did not do enough. They have done the same to Novartis. Now we see why it is so and it will take not 10 months for standard review and actually 24 months and will take much more going forward.

So do you think the FDA is being over-reactive?

Yes I do think so and many of them will admit it.

Will it then delay the introduction of new drugs in the market henceforth?

It already is delaying new drugs. I have a long list of drugs that are stuck for not having got approval letters or have been sent back to further tests. To be fair, the FDA has done a good job on what they call the priority review drugs.

But on the standard drugs or what they call the specialty drugs, it has been too slow. This is not a great environment for getting approval for new drugs. In think the FDA has turned conservative. Probably before Vioxx what was an approvable letter is now non-approvable.

Coming back to India, would you be looking at acquisitions in the country for R&D?

My fix for R&D is not to own more. In fact, I want to own less. I am interested in getting smaller. Acquiring companies makes us bigger. We are more interested in finding partners like GVK. I want to be smaller, leaner and virtual.

And when it comes to outsourcing we want to have big deals which explains why we have gone back to Accenture every time. Perhaps the GVK relationship will grow.

This interview as it appeared in DNA is available here