If I Ran Pfizer - Pharmaceutical Executive


If I Ran Pfizer
The industry is at a crossroads, and all eyes are on the world's largest drug maker. When Pfizer leads, others follow. So we asked: If you had that sort of influence, how would you steer Big Pharma?

Pharmaceutical Executive

Listen to Your Customers

Andrew Brana, consultant, TNS Healthcare
One thing that certainly no longer works is pharma's sales and promotional model. I've seen pharma's current model described as the "more is better" "Red Army," and, my favorite, "Mongol horde" approach. All the evidence points to a significant deterioration of the relationship with doctors because of this type of promotion. The signs of unhappiness include declining call rates, lower sales productivity, and, most directly of all, customer feedback that laid it out point blank—they're saying, we're not getting the support from you that we feel we should. To reestablish positive relationships with doctors, pharma must develop a relationship strategy that benefits their customers. Pfizer has stated very clearly its intentions to get its customer relationships and activities right. In their recent analyst presentation, two of their five strategic priorities were directly linked to this goal.

Create Nimble R&D Groups

To move away from blockbusters, Pfizer is going to have to do what they're talking about: set tough goals. Kindler announced that Pfizer would launch two externally developed products and four internally developed products a year by 2010. Those goals certainly will stretch their R&D capabilities.

You can also cut costs. Pfizer continues to streamline its operations from the Warner-Lambert and Pharmacia acquisitions. Management has to make these tough challenges look doable, and hope for some early wins to build momentum.

Molly Schmid, professor, Keck Graduate Institute
GlaxoSmithKline is running a parallel experiment. After its merger, it broke the company down into autonomous Centers for Excellence in Drug Discovery. The model at Pfizer doesn't seem to be going that far, but there may be some similarity in the desire to break up the organization into more functional, smaller, quicker groups.

Gain Efficiencies Where You Can

Heather Brilliant, analyst, Morningstar
The business model has to change over the next five years. Pharma will be navigating a political environment that appears to be growing more hostile toward Big Pharma by the day. They are also facing increasing skepticism on the part of payers, who will probably require further data to justify a branded drug, particularly when even remotely similar generics exist. Also, FDA has been getting more conservative, approving fewer drugs in recent years than it has historically, and will likely require ever more data given problems like Vioxx—so developing drugs is not likely to get cheaper any time soon.

I think Pfizer's plan takes reasonable steps to deal with some of these industry issues. Particularly, the firm's intention to continue to invest significantly in R&D, reduce internal manufacturing, and improve the focus and efficiency of its marketing efforts should help realign the firm to better address current industry challenges."

Between Lipitor and the Next Big Thing

Pfizer needs to do two things. One, they need a cultural change. Pfizer has an aggressive, sales-driven culture. There's nothing wrong with being aggressive, per se, but they should probably focus more on R&D and adopt more of a science-driven culture.

Secondly, they need to have a strategy post-Lipitor—which requires getting smaller before they get bigger. My view is that they should buy a lot of companies with early-stage compounds on the assumption that they're really not going to have anything major break before Lipitor goes off patent. If you start buying a bunch of small Phase I, Phase II compounds, then by 2012, 2013, your late-stage pipeline starts to look really good.


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