Isn't the key point that "they DID outstanding work?" Where are they now and where is the company that now owns them? Oh, isn't the vestiges of what is left now owned by a company that has declared bankruptcy at least once?
Xerox and PARC - how'd that work out for Xerox? Oh ya, now they are an ~ $8B / yr company while IBM is now a Fortune 1-20 (depends upon year) with a vaunted research performance with research facilities all over the world. But guess what? They follow the model above = what you see as dedicated proprietary research is but a portion of what they spend on research.
Genentech was hot, for a while, but then had to be acquired in order to stay in business. In the beginning, when it was developing a new set of therapies and needed new science and to develop new technology and were almost ALONE in the field it worked well.
If Vasella and NVS's vision for research using NIBR was a stand alone dedicated research facility then I think that the intellectually honest consensus is that it has failed. You can add the caveat of "as of yet" which implies that we haven't waited long enough to see the results. Or you can say that it has succeeded in publishing scientifically significant papers which is changing it's stated goals (second one could be compatible with the first) or it can and has been argued that it hasn't had the right leaders (which is also compatible with the first two and notice that I didn't use the judgement laden term of "bad").
Or, you could argue that even if all of these were true it is because the "business model" is flawed. If it is and it is decided that it NVS needs to adopt the IBM model (mixture of dedicated:collaborative:acquisition) then unless NVS is willing ti expand it's research budget by 2-3 times (depending upon what the current ration is) and after it expands in CAM and China etc.
Think of the exercise as an experiment used to generate the required results and the current NIBR structure as one result. I don't think that no NIBR is an answer but less NIBR in relation to other research efforts is.