Drug development and the NFL draft

All opinions are my own and do not necessarily reflect those of Novo Nordisk.

The NFL draft is happening as I am writing this post. And of the many draft-related pieces I’ve read in the past few days, one from Vox.com particularly stood out. The article, by Joseph Stromberg, describes research by Cade Massey and Richard Thaler (here and here) about the skewed and irrational choices often made by teams during trades of draft picks. In essence, teams are likely to pursue a strategy in trading up that suggests they believe they have a much greater ability to forecast the future performance of a given player than is actually the case. Put another way, rather than following a strategy of diversified risk, teams commit to a specific player that they feel they need to get, rather than simply seeing who’s available when they are scheduled to pick and choosing the best player on their draft board.

Historical analysis shows that the difference between various players drafted at the same position is often negligible; on top of that teams who aggressively trade down and gather more picks in the lower rounds generally do better in terms of the value they receive for the money they spend in salaries. One might argue this is an artifact in part of the NFL Rookie salary structure, but even without that, players taken in later rounds will always command smaller salaries. Getting similar value for less money is generally a good thing.

If you’ve read posts from this blog before you know where I’m going. Drafting NFL rookies sounds a lot like developing drugs. Continue reading

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Internal and external motivation and the GSK big-bonuses-for-a-successful-drug initiative

All opinions are my own and do not necessarily reflect those of Novo Nordisk.

The story in the Times of London about GSK’s new strategy for incentivizing its R&D teams by rewarding millions (yes millions) of dollars to deserving members of the team that gets a drug to approval has provoked a flurry of responses.   You can see posts from Derek Lowe, John LaMattina, and David Shaywitz that do a nice job of summarizing why this seems like a really bad idea in a lot of ways.  I don’t want to restate their arguments, other than to agree wholeheartedly that rewarding the lucky scientists will overall disincentivize researchers, will be difficult to administer fairly especially given the collaborative nature of biomedical research and the long, long timeframe for a drug to be approved, will have a great likelihood of upsetting and causing hard feelings in employees, and also misses the point that motivation is hardly what’s lacking in R&D these days.

I’d like to touch on that last point with respect to what I feel is particularly worrisome in this:  the complete externalization of motivation on the part of scientists, and the downstream consequences for ethical behavior and human health.  A recent survey commissioned by the Law Firm of Labaton Sucharow suggests that ethical standards on Wall Street are troubling.  About a quarter of respondents had observed or had firsthand knowledge of misconduct at their companies, and about a quarter also admitted they would engage in insider trading to make $10 Million if they thought they could get away with it.  If these GSK-type bonuses become the standard in BioPharma R&D, will we see a rise in unethical behavior on the part of scientists?  And could that lead to endangerment of human health, with clinical trials performed on compounds that are pushed farther than they should be because the R&D team is looking ahead to the possible prize?

I remember a mentor at Merck asking me after my first year how I liked my bonus.  I responded enthusiastically.  He nodded, smiled a  little and said, “Enjoy the feeling.  Because next year it won’t be the same.  It’ll just be something you expect.”  And he was right.  We talk about the perks of working for BioPharma, but there’s actually a cost to being in an environment that provides the kinds of lavish benefits we get in industry.  It can cause the personal source of motivation to shift from internal to external rewards.  Ultimately, for people who are creative, I think the best work is done when internal motivators are a strong part of the driving force–something Daniel Pink describes in his book Drive.  It’s why I think games work so well as a tool for getting things done.  They tap into internal motivating factors.  After all, no one (other than World of Warcraft Gold Farmers and the like) spends hours playing a game because they’re being paid to. We should not be trying to make an engaging, exciting pursuit like research into just something we do because it pays the bills.