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Pfizer (NYSE:PFE) has pulled the inhaled insulin Exubera from the market, and not because of the FDA, and not because of the lawyers. They’re giving up on it because they can’t take the pain any more. The company sold 12 million dollars worth of the stuff so far this year, a horrifyingly tiny amount. That represents about 0.3% of the insulin market, which we can round off to "zero". The ticket out is a mere 2.8 billion dollar charge against earnings. It's the first time I can remember a company pulling a drug just because it was losing so much money - of course, Pfizer is not a normal company, and these are not normal times, especially for them.

There are plenty of post-mortems around, from the front page of the Wall Street Journal onward. (See the Journal’s Health Blog, Matthew Herper’s blog at Forbes, Pharmalot and the folks at Invivoblog for more). I have my own, naturally, since a disaster of this size admits of many interpretations. Here’s what it says to me:

1. Marketing isn’t everything. The next time someone tells you about how drug companies can sell junk that people don’t need through their powerful, money-laden sales force, spare a thought for Pfizer. The biggest drug company in the world, with the biggest sales force and the biggest cash reserves, couldn’t move this turkey. People didn’t want it, and they didn’t buy it.

The flip side of this is that even the drugs that folks love to hate, the ones that no one can figure out why they do as well as they do, must be doing something for some people. Perhaps other, cheaper drugs would do something quite similar, and we can discuss cost/benefit ratios, but you couldn’t sell them if people didn’t feel that benefit in the denominator. Not many people felt it from Exubera.

2. Internal sales estimates can be a joke. People inside the drug companies have known this for a long time, although they’d often rather not think about it. Analysts have known it, too, but they're forced to pay attention to those numbers anyway. But man, look at the magnitude of this one. Just as Warner-Lambert tried to kill Lipitor before they brought it to market (who needs another statin?), Pfizer was telling analysts a few years ago that their projections for Exubera sales (a billion dollars a year) were just too darn low. Two billion a year by 2010, thank you and please correct the error. Only off by a factor of one hundred, and what’s two log units between friends?

Sales forecasts are not science, and they only bear a superficial resemblance to math (where the phrase "imaginary number" is rather more strictly defined). They are guesses, and some of them are good guesses and some of them are awful, and unfortunately when you first look them over, they all smell about the same.

3. Groups aren’t necessarily smarter. This is the flip side of all the “Wisdom of Crowds” stuff, which only works when a lot of people (who think of a lot of different things) all get a crack at a subject. Inside a company, though, diversity of opinion sometimes doesn’t get much respect, and the problem gets worse in areas like marketing (and worse as you go into the higher ranks). Think of what would have happened to a Pfizer exec who forecast a 0.3% market share and a 2.8 billion dollar charge for Exubera when everyone else was revising their figures up a billion. It would have taken a fantastic amount of nerve to make a call that contrarian, and the rewards for being right (if any) would definitely not have been worth it. Even if someone had a terrible suspicion, it was surely much safer to keep quiet.

Groups of people can, in fact, be quite stupid. People will deliberately not bring their minds to bear on a problem, in order to get along with their co-workers, to not stick their heads up, or just to make the damned meetings end more quickly.

4. Pfizer is in vast amounts of trouble. While not an original thought, it's an unavoidable one. We all know the problems they have, and believe it, they do too. But what to do? I remarked a few weeks ago that Pfizer's situation reminded me of a slow-motion film of a train running toward a cliff, and a colleague of mine said "Yeah, me too, but in this case they're still boarding passengers and loading their luggage".