A View from Pfizer's Corner Offices

There's a good article from Lee Howard up at The Day (the New London/Groton newspaper) on the changes going on at Pfizer. It's the story according to management, though, which is worth having for its compare-and-contrast uses:

Despite the looming uncertainty, according to company spokesmen, the new research structure has added energy and urgency to the drug-discovery process in Groton. . .

. . .The changes in Groton - seen most plainly in displays of logos the new business units are in the process of choosing - have added drug-development staff and even legal experts to the R&D mix, along with biologists and chemists who typically have worked in close proximity. In the middle of it all sits the chief scientific officer of each business unit, as well as other managers.

The idea is to develop a more realistic idea of a drug's likelihood to succeed at an early stage and then bring it to market quicker if it seems to be working.

I hope that the process of choosing new logos doesn't take too long. You could get a reasonable read on the success of any attempt to remake Pfizer's culture by counting the number of meetings the logo process has required so far.

But I can't make fun of the goals that the company is setting - they're perfectly sensible. The only problem is that they're just what everyone else is trying to do too, and if it were easy, everyone would be finished doing them by now. The problem with trying to get an earlier decision of a drug's chances for success is that many of the serious problems don't show up (in fact, can't show up) until larger clinical trials. And I don't think that anyone's got a good way around that one yet. Some therapeutic areas are better suited than others, to be sure.

Would the new structures that Pfizer's putting in place have prevented the torcetrapib disaster? I doubt it - that one took everyone by surprise. Would they have prevented the Exubera disaster? Now, that one is food for thought, because it seemed to be much more self-inflicted. If the company can avoid doing that sort of thing again, then they've accomplished something.

And for all the nasty things I say about Pfizer here, I hope that they do accomplish things. After all, they're the biggest drug company in the world, and they seem determined to stay that way. If an organization that huge ends up spinning its wheels (or sitting around designing new business cards), it can't be good for anyone.

Comments

[Rage1979:]

It would seem to me that advances in fully differentiated hESC's and iPS cells will provide another tool in the scrutiny of drug candidates. Effective employment of the correct model cells, although not a 100% perfect analysis tool, shall certainly help pull out more and more outliars in the process. Thus, directly saving money avoiding unnessecary trials and more importantly increasing the potential safety to future patients.

Jun 18 05:21 AM

[Mad Hedge F...:]

they are going to have to deal with the new reality. I met with Dr. Christina Romer, chairman of the Council of Economic Advisors, who practically tore my ear off proselytizing her new found religion, health care reform. Appointed by Obama to advise him on all things economic, Dr. Romer had this hot potato dropped in her lap six weeks ago in one of her daily briefings to the President. With the enthusiasm and ebullience of a new found convert, Dr. Romer laid out goals that were nothing less than revolutionary. She plans not to just “socialize” medicine, but to fundamentally rebuild the entire health care infrastructure of the US. Tax incentives will be created to encourage value over volume. People can keep existing plans they like. Technology will be applied to cut costs, not only to come up with more complicated and expensive cures. Existing subsidy programs for the poor will be folded into the new plan, offering coverage to 46 million uninsured. Providers will get cash incentives for prevention. Individuals will gain the advantages of risk pooling. Pre-existing conditions will be covered. All of this will be made revenue neutral through the taxation of employer paid insurance and savings through new efficiencies. If the administration can pull all of this off, the benefits will be huge. An annual 1.5% reduction in health care costs will add 8% to GPD and increase family incomes by $10,000/year by 2040. This will boost corporate profitability and competitiveness, labor mobility, the quality of life, and reduce the budget deficit and unemployment. Failure will see health care spending rocket from the current 18% to 33% of GDP in 30 years, and the number of uninsured explode to 76 million. Romer spewed out statistics as only an economics PhD from MIT can. Oh, and now or the stuff you care about. The economy will shrink in Q2, see no growth in Q3, and turn positive by Q4. The issue doesn’t affect me, as I have always avoided health care, insurance, pharmaceutical, and biotech stocks like the plague; they being subject to capricious government approvals, and therefore inherently unpredictable. These are the opening shots of a political dogfight that will ensue over the next three months and dominate the media.

Jun 18 01:07 PM

[a. palmer jr.:]

Wonder if PFE will ever raise it's dividend to where it was before?

Jun 18 10:13 PM

[BBBB:]

As a Pfizer employee, I would say you are dead on. I wonder if we were to add up all of the time spent throttling projects because of mergers, if we could explain our lack of productivity. It might not seem like that big of a deal at first, but ~6 months of project throttling per merger, with three mergers in the last ten years....well, you get the point. A substantial amount of time has been wasted merging, reorganizing, aligning globally etc.

Drug discovery is a luck business: drug failure/success is going to happen randomly. The best way to succeed is for Pfizer to get out of its own way and to stop chasing revenues with these mergers.

BBB

Jun 24 10:42 PM