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?
By: Beth Herskovits
By: Beth Herskovits
When Pfizer CEO Jeffrey Kindler took the podium in January and announced that the struggling company would scale back and restructure its operations, he did more than just signal the end of an era. He proved that to turn around Pfizer—and in a way, the industry at large—companies need to hack away the parts that just aren't working anymore.
Certainly, the reorganization plan of the world's largest drug company is ambitious. It involves streamlining operations under five newly created business umbrellas, ramping up communications with payers and patients, ending smothering sales tactics with physicians, and cutting the fat out of middle management. In every sense, it was swift and unforgiving—but observers were unimpressed.
"It's not even close to revolutionary; I wouldn't even say it's evolutionary. It's just stand-pat," said Bill Trombetta, professor of pharmaceutical marketing at St. Joseph's University in Philadelphia, who noted that GlaxoSmithKline and Merck have already undertaken similar strategies. "They're not doing anything that's different from what any company would do when its back is against the wall."
The moves were all practical. Unable to build a beanstalk from its magic bean torcetrapib, Pfizer had no choice but to scale down its infrastructure. But observers didn't believe that Pfizer's plan got at the heart of the industry's troubles: the costly and time-intensive R&D process, higher hurdles at FDA, ever-present risk of unforeseen adverse events, and the ticking clock on blockbuster patents.
Trombetta and others talk about the need for drug companies to think beyond their role as drug suppliers and become companies that offer a strategic advantage to their customers. They're certainly capable of doing so. After all, it was Pfizer, Trombetta noted, that worked with Florida's Medicaid program in 2004 to fund health education, triage services, bloodpressure cuffs, scales, and other personal health aids for people who couldn't otherwise afford them.
But the program wasn't institutionalized. "The drug industry is there to sell products—it hasn't been there as a source of strategic advantage," Trombetta said.
"The ramifications are all the way up the chain: from drug discovery to what business pharma companies are in. Are they in the drug business or the solution business?" said Steve Wunker, a partner at consulting firm Innosight. "That will be the hardest challenge for pharma to address. They're very good at innovation—in the sense that they're good at finding new molecules—but they're very bad at innovating what they do."
Mighty Pfizer sets the tone for the rest of pharma. But now, when all eyes were on the industry's role model, some observers believed company executives dropped the ball. They talked about innovating new products, but they didn't talk about innovating what they do.
So we asked observers, critics and supporters, to fill in the missing pieces. If they ran Pfizer—or more specifically, a Big Pharma company that wielded a similar position of influence—what model would they create? How would they tackle the issues facing the industry?
Here's what they had to say.
Certainly, the reorganization plan of the world's largest drug company is ambitious. It involves streamlining operations under five newly created business umbrellas, ramping up communications with payers and patients, ending smothering sales tactics with physicians, and cutting the fat out of middle management. In every sense, it was swift and unforgiving—but observers were unimpressed.
"It's not even close to revolutionary; I wouldn't even say it's evolutionary. It's just stand-pat," said Bill Trombetta, professor of pharmaceutical marketing at St. Joseph's University in Philadelphia, who noted that GlaxoSmithKline and Merck have already undertaken similar strategies. "They're not doing anything that's different from what any company would do when its back is against the wall."
The moves were all practical. Unable to build a beanstalk from its magic bean torcetrapib, Pfizer had no choice but to scale down its infrastructure. But observers didn't believe that Pfizer's plan got at the heart of the industry's troubles: the costly and time-intensive R&D process, higher hurdles at FDA, ever-present risk of unforeseen adverse events, and the ticking clock on blockbuster patents.
Trombetta and others talk about the need for drug companies to think beyond their role as drug suppliers and become companies that offer a strategic advantage to their customers. They're certainly capable of doing so. After all, it was Pfizer, Trombetta noted, that worked with Florida's Medicaid program in 2004 to fund health education, triage services, bloodpressure cuffs, scales, and other personal health aids for people who couldn't otherwise afford them.
But the program wasn't institutionalized. "The drug industry is there to sell products—it hasn't been there as a source of strategic advantage," Trombetta said.
"The ramifications are all the way up the chain: from drug discovery to what business pharma companies are in. Are they in the drug business or the solution business?" said Steve Wunker, a partner at consulting firm Innosight. "That will be the hardest challenge for pharma to address. They're very good at innovation—in the sense that they're good at finding new molecules—but they're very bad at innovating what they do."
Mighty Pfizer sets the tone for the rest of pharma. But now, when all eyes were on the industry's role model, some observers believed company executives dropped the ball. They talked about innovating new products, but they didn't talk about innovating what they do.
So we asked observers, critics and supporters, to fill in the missing pieces. If they ran Pfizer—or more specifically, a Big Pharma company that wielded a similar position of influence—what model would they create? How would they tackle the issues facing the industry?
Here's what they had to say.
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