Take Me to Your Leader - Pharmaceutical Executive


Take Me to Your Leader
Turnover in the top 10 has new CEOs racing to reinvent the way their companies do business. But who has the courage to lead the industry itself back to greatness?

Pharmaceutical Executive

No pharma leader commands—or suffers—the media attention Pfizer CEO Jeffrey Kindler does. Something more is at work here than the fact that the biggest of Big Pharma is wrestling with enormous challenges. The spotlight on Kindler also points to a deeper curiosity about whether his resumé represents the future face of pharma leadership.

Kindler never "carried the bag." He's an outsider with a Harvard law degree who once worked for the legendary Jack Welch at General Electric. That fact may have had totemic value in the Pfizer board's decision to anoint him over two rivals, each of whom had done 30 years in pharma.

"Kindler was probably chosen because he has little background in classic pharma culture," says Whitney Baldwin. "He has presumably been given the freedom to challenge the status quo, and God knows that was needed at Pfizer." And an outsider might be just the person to handle the job. "When an industry requires dramatic change, years of experience can be your enemy," says Peter Young, president of Young & Associates. "Especially if you have gone through a long period of stability, you tend to misdiagnose what is no longer working in the structure and the strategy."

Kindler has acted quickly—though not quickly enough for detractors who fear that his lawyerliness will squelch innovation. His moves so far have been bold but not especially original: He shook up his management team and restructured R&D into nine therapeutic areas, Glaxo-style. More dramatically, he is shrinking Pfizer's storied sales force by 20 percent.

That last achievement impressed Ernst & Young's Carolyn Buck Luce. "When Kindler announced the end to the 'arms race,' it was akin to when Walter Wriston, as CEO of Citibank in the early 1980s, consented to the write-down of Latin American debt, which created a whole new dynamic in the capital markets."

To maintain his Wriston-esque stature, though, Kindler will have to pull more rabbits out of his hat. Or maybe just one big one. As Bill Trombetta says, "It's easy to cut costs. But you can only lower them so far. The big question is, how is he going to increase Pfizer's single-digit sales growth?"

Restoring public trust in the pharmaceutical industry is no less critical a mission for a CEO than revolutionizing the business model. Unless pharma commits to greater accountability and transparency as well as to engaging consumers in the complex realities of safety, pricing, and patents, the industry's viability may be in doubt. Yet, so far, most CEOs have shirked the bully pulpit. "They prefer to let their actions speak louder than their words," says Fred Frank. Unfortunately, actions such as developing orphan drugs, donating HIV drugs to Africa, public/private R&D partnerships for neglected diseases, and patient-assistance programs, to name a few, have gotten lost in the noise of negative press.

This takes a toll on morale, says Kai Lindholst. "Across the industry, you see individuals who feel immensely responsible for the health of patients, but there is a lack of recognition," he says. "They feel like they are being treated as if they produce asbestos, not medicines."

The apparent disconnect between how the public views pharma and how pharma views itself could hardly be wider, says Jeff Moe, senior director of health sector management at the University of North Carolina, who did a long stint at Glaxo: "When you're inside the industry, you feel like you're inside the bunker. There's no one out there applauding. In fact, there's the sense that you're always under attack."


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