Merck’s announcement that it is cutting 8,500 jobs to focus its resources on “core therapeutic areas” is part of a “paradigm shift in the industry”, according to Professor John Lyon, of the UK’s Warwick University Business School.
Professor Lyon, who previously served as Global VP of Covance and has held senior appointments at several biotech companies, says the cuts are part of a realization that “the days of the blockbuster drug are coming to a close”.
Big Pharma firms like Merck should adopt a more nimble, flexible structure and become more innovative, he adds. They “need more of the entrepreneurial mind-set”, which should be “mirrored in their processes to feed their earnings per share year on year.”
But while Professor Lyon says there is a need “to act swiftly to changing market dynamics” and “address real time controllable risks through swifter decision making,” he concedes that, in pharma, this will be a process that will take many years, “like turning an oil tanker.”
Many of the Merck’s remaining 81,000 workforce, however, may be hoping that the company’s shift in strategic focus takes more time than that to achieve!