Pfizer is riding the same stormy waters as every other drugmaker. But with dual layoff stories last week capping a long season of job cuts and cost-squeezing, industry observers are wondering whether this pharma behemoth is sinking under its own weight, The Day reports.
With cholesterol heavyweight Lipitor nearing the end of its patent, Pfizer has been casting about for ways to keep the cash coming. The company nabbed Pharmacia for $60 billion and since has inked deals with biotech after biotech, looking for the next new blockbuster. But that blockbuster hasn't been forthcoming, and the Pharmacia merger brought with it the usual marital difficulties: clashing cultures, job overlap, and so on. Meanwhile, the company added management layers and sold off its consumer health division to focus on new drug development--a move that some say, in hindsight, was exactly the opposite of what Pfizer should have done.
Derek Lowe at In the Pipeline has been covering Pfizer's research cuts for some time, and he's skeptical; to him, Pfizer is like a Frankenstein's monster: stitched together of odd parts, lacking loyalty and understanding from its own creators. "Pfizer exemplifies... a lot of things that I think have gone wrong with the industry," he has said. For instance, as Big Pharma got bigger, companies didn't realize that R&D productivity doesn't scale. "If anything, it may go in the other direction," Lowe said. And execs are so clueless about the fits-and-starts nature of research that they tend to mismanage it.
One business professor told The Day that Pfizer's problems show a corporate tendency to preserve management, rather than preserving the business itself. "Having finance people and lawyers without scientific knowledge who don't know a neutron from a crouton... making decisions about a viable research project is a problem," he said.
As you know, investors have been chomping at the bit for some sort of sea change at Pfizer and have been disappointed repeatedly with simplistic cost cuts and layoffs. But to our knowledge, no one has stepped forward with any big ideas that could remake Pfizer for the changing world. We'll keep listening.