More than one in four American adults over 40 take a statin, a cholesterol-lowering drug that, for many individuals, can reduce the risk of cardiovascular disease and death.
Japanese biochemist Akira Endo is credited with discovering the first statin, isolating the compound from a fungus. Yet Endo’s company, Sankyo, was not the first to reap the profits of this life-changing drug. Instead, Merck, which followed up on Endo’s findings, shepherded the first statins through FDA approval, launching a market now worth billions annually.
For a scientific discovery to become a breakthrough drug or device requires a mix of scientific ingenuity, business acumen, and, more often than not, serendipity. In “Managing Discovery in the Life Sciences: Harnessing Creativity to Drive Biomedical Innovation,” three Penn professors explore this recipe for success through an interdisciplinary lens. Incorporating scholarship from both science and management, as well as a range of case studies, their book provides a guide for how scientists and managers alike might adopt practices that improve the chances of bringing revolutionary scientific advances to the market for the good of society.
The book has its origins in the Roy and Diana Vagelos Program in Life Science and Management (LSM), a dual-degree offering by the School of Arts and Sciences and the Wharton School. Catering to undergraduates with an interest in both the biosciences and business, LSM, the brainchild of Roy Vagelos, a Penn alumnus and biochemist who went on to serve as a scientific and corporate leader at Merck, admitted its first students in the fall of 2006.
Mark Pauly, an economist at Wharton, and Philip Rea, a biochemist in the School of Arts and Sciences’ Department of Biology, were the inaugural faculty co-directors; Rea now co-directs the program with Lawton Burns, a management professor at Wharton.
The idea for the project emerged over a lunch back in 2012, when Rea and Pauly recognized that a book would be an ideal vehicle for relating the back stories of how well-known drugs and devices came to be.
“We realized there was a need for a book of this type that delivered the commercial punch lines while at the same time not pulling back on the scientific details that are needed if the reader is to truly gain insight into what happened,” says Rea.
“We put into the book many elements of the LSM program,” Pauly says, “the idea that management and the life sciences together contribute to the development of new products, and sometimes they make positive contributions, and sometimes they get in each other’s way.”
The 542-page book begins with three chapters that trace trends in discovery and the pharmaceutical industry, digging into both the scientific and business literature. It then launches into a series of case studies that detail the often-complex narratives of how life sciences advances—from statins to angioplasty to CAR-T cancer immunotherapies—were achieved, circuitous trajectories that frequently include as many missteps and overlooked breakthroughs as they do lightbulb moments.
Many of the chapters featuring case studies were coauthored by undergraduates in the LSM program, who, as part of an independent study course, investigated the back stories of important biological discoveries and how they reached the market. Penn MBA and doctoral students are also among the book’s coauthors.
Rea notes that journalistic accounts of so-called breakthroughs often gloss over the nuances of how these innovations emerge.
“There was no story that was not intriguing and that did not involve a very significant amount of serendipity or discovery by mistake,” Rea says. “This was true of things like the statins, ACE inhibitors, Gleevec, metformin, and others … all are examples of advances that have had a global impact. And yet so many of these stories had never been told.”
Serendipity emerged as an overarching theme of the book. Yet the authors also provide lessons on how to increase the likelihood that chance events may be recognized and channeled into something of value.
“There’s a caricature of a flint-eyed chief scientist or CEO who looks out the window and wonders how the next problem will be solved, then turns it over to the brilliant scientist in the lab and magic happens,” Pauly says. “It actually doesn’t work that way. The key to success is often a lucky break, or a serendipitous event, but magic doesn’t happen by itself, there’s a lot of work involved.”
Without the necessary conditions for discovery, Pauly adds, which include access to the appropriate resources, and the presence of appropriate incentives, these innovations won’t translate from the lab to the marketplace.
Following each case study, the authors present a brief “managerial notes” section, providing a window into a related business decision or challenge. For example, in the section on CAR-T immunotherapies, the note nods to Penn scientist Carl June’s crucial switch from studying HIV to focusing on cancer, and how early research pushed forward despite little financing, but finally reached a tipping point at which promising findings opened up a revenue stream from private industry.
The authors are hopeful that the book’s insights prove useful to students—both in science and in management—as well as business leaders, scientists, historians, and anyone interested in the business side of biomedicine. Such a multi-faceted accounting of biomedical innovation, they say, owes a debt to Penn’s emphasis on cross-disciplinary collaboration.
“What you have here is an economist, a biochemist and a sociologist coming together to explain this phenomenon,” Burns says. “Penn provides a laboratory for integrating knowledge. You only have to walk two blocks and you’re in the medical school, the nursing school, the hospital. Both here at Penn and in the book, we talk a lot about how geographical proximity can play a role in innovation.”
The very existence of the book underscores one of its major takeaways: that managers can work productively with scientists. "If nothing else this book is a testament to the fact that scientists and management school faculty really can get on rather well with each other on a joint project of this type,” the authors write in the book’s preface. “Perhaps in the final analysis, it is our differences that are our strength and make it such an enriching experience."
Philip Rea is professor of biology in the Department of Biology in the School of Arts and Sciences, Rebecka and Arie Belldegrun Distinguished Director of the Vagelos Program in Life Sciencess and Management, and a co-founder of the LSM program.
Mark Pauly is the Bendheim Professor in the Department of Health Care Management at the Wharton School and a co-founder of the LSM program.
Lawton Burns is the James Joo-Jin Kim Professor in Wharton’s Health Care Management Department and is co-director of the LSM program.
Photo at top: Biochemist Philip Rea saw value in digging deep into the science to gain a full appreciation of how and why certain discoveries found commercial success, while others languished on the path to commercialization.
Homepage photo: Relying on lessons learned in running the Vagelos Program in Life Sciences and Management, Lawton Burns, Philip Rea, and Mark Pauly co-wrote a book that explains how crucial biomedical innovations emerged from lightbulb moments and found success in the marketplace.