Jeffrey Kindler: In His Own Words - Pharmaceutical Executive

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Jeffrey Kindler: In His Own Words


PharmExec Direct

Everybody wants to know what Jeffrey Kindler, 51, Pfizer's new CEO and former general counsel, has to say about the big challenges facing his company and the industry. Kindler, a Harvard law graduate who clerked for a Supreme Court justice in his twenties and became McDonald's general counsel at age 41, never worked in pharma until five years ago. Now he's leading the world's largest prescription drug maker. A few weeks ago, he spoke with Pharm Exec, and was subject of a July cover story. Here are excerpts from those discussions--in Kindler's own words.

Size Matters

Kindler: Pfizer's size allows us to do incredible things. It gives us the resources to be the partner of choice for people who discover new medicines. It gives us the scale to do research and development that no one else can dream of. It gives us a seat at the table when government policies and public policy decisions are made.

A few years ago, we adopted a slogan for my division: The Spirit of Small, the Power of Scale. And our logo shows a bunch of tiny little fish all moving in the same direction, and then the tiny little fish start to merge and they become a giant whale. We want to try, to the extent that we can in this large an organization, to have the spirit of a small company.

Jack Welch [former CEO of General Electric, who Kindler worked under before moving to McDonald's] used to talk about wanting to have the soul of a small business inside the body of a huge business. And similarly, we want to try to make people feel directly connected with the enterprise, which is very difficult to do when you get this big and you're this geographically diffuse.

Management Style

Candidly, what I try to do is to identify the relatively small number of things--less than ten--that I really have to have a deep familiarity with and be focused on. Then I trust the organization will effectively deal with the rest. Now if people think I need to know something, for whatever reason, or if they think I can add value to help solve the problem, they'll involve me in it. But I only have room and time for so many issues to deal with, and I don't add value if I start to micromanage the handling of every issue that we've got going.

Corporate Culture

We place a lot of value in what we call "leader behaviors" -- respect for people, open communication, teamwork, leadership. And I think it's a very effective approach, a very effective culture, because it combines a very strong commitment to performance with support for the growth of individuals. We care about the people who work here and care about their development. We work very hard to help them grow and develop. And many people have been in this company their entire careers. They have had really terrific success at growing and developing within this company.

Sales and Marketing

One of our bright young lawyers came up with the analogy of a football field. And he successfully used this analogy with our field force. On a football field, there are places that are out of bounds where you can't play. But that football field is huge. The inside of that football field has a lot of room for your creativity and for aggressive, appropriate activities in marketing and sales. You just need to know where those lines are so you don't cross them. That's kind of the mindset that we try to bring to bear on these issues.

Legal Environment and Regulation

The pharmaceutical business is probably the most regulated business there is. I can't think of any that is as regulated. Every single thing we do--from how we run our laboratories that discover the products, to how we manufacture them, to how we market and sell them, how we talk about them--is highly regulated.

But when you talk about the legal environment, you have to look at the broader overall public policy environment. We have to address the environment in which we do our business because, while the FDA is our primary regulator, the fact of the matter is that any number of other entities would like to regulate us, whether they be state Attorneys General, federal prosecutors, or judges and juries in individual cases.

So I think we need to take an integrative approach to the public-policy environment in which we operate. We're trying to get ahead of the curve, identify the issues. Frequently you could say that today's cause by some fringe activist might be tomorrow's legislative proposal. And issues really have a lifecycle, just like products do. You can oftentimes look back and see how it would have been possible to anticipate an issue facing the industry and have gotten ahead of the curve and dealt with it sooner. That's easy with 20-20 hindsight. It's much harder to do that going forward.

FDA

Our entire business is predicated on patients having confidence that the pills, which after all they're putting in their body, are safe and effective and of high quality. So it is very much in our interests that there is a strong FDA to provide consumers with that confidence. It is not in our interest to have an adversarial relationship with our regulators because in the long run our business flourishes when patients feel that there is a strong, independent, well researched, well resourced scientific agency that's looking out for their interests. In the long run we're dependent upon that, and the patients are dependent upon that--and you can't achieve that by having an adversarial relationship with them.

Compliance

By and large, the fundamentals of a good compliance system are pretty straightforward, and anybody who's worked in that area understands what they are. You have to have systems to detect issues. You have to have training. You have to take appropriate remedial steps when you find an issue. You have to take employee discipline when it's appropriate. You have to have a program and policies that people understand. These are the basic elements of any good compliance program; and I don't think we have much disagreement with the OIG when it comes to that.

Overseas Markets

One of the significant issues that our industry faces is price control efforts, which take various forms. Sometimes they're not called price controls, but they really are. They're access restrictions, rationing, price management of one kind or another. We face that issue in a lot of countries outside the United States.

The fact is that the United States is the home of some of the most important and innovative biomedical research in the world. It is a critical American industry. It creates high-paying, good jobs, and it's very important to the United States in a competitive world in which other types of jobs are going overseas.

So we really value when the United States government expresses to other countries the importance of valuing this industry so that we can continue to develop the medicines of tomorrow.

Generics

When the Hatch-Waxman Act was passed in 1984, it was a very thoughtful and balanced piece of legislation that was intended to provide a system that was best for patients. Not a lot of other countries have as balanced a system as we do. Generic medicines actually cost a great deal more outside the United States than they do inside the United States. Most people don't know that.

But in the last three or four years, we've started to see generic companies attack our patents earlier and earlier in the lifecycle of the patent, almost as soon as they could under the law. And they also increased the number of attacks they make on the basic composition-of-matter patent, as distinguished from patents covering processes and formulations. We are fighting something like 300 patent cases in 50 countries around the world. It costs time and money to take these cases to court. But the generic manufacturers have very little to lose. They spend whatever legal fees and costs of court might be. You know, maybe it's a few million dollars, and they do it enough times that maybe once they'll hit the jackpot and get something that's worth hundreds of millions of dollars. So they have a tremendous incentive to do that.

The other irony of the system is that if we lose against one generic, we lose. We lose the exclusivity of our product. If one generic loses against us and we win, another one can bring the next case and we have to win it again. And we've had situations where within months of winning a case, another generic brings the exact same challenge and we have to litigate it all over again.

So I think for all these reasons, the system has gotten a little bit out of balance, and I don't think it's in the long-term interests of patients for there to be this cloud of uncertainty over our intellectual property. But as far as we're concerned, our approach is pretty simple.

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Source: PharmExec Direct,
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