I left Pfizer a few months ago after nearly a decade spent in NY. I was in a good position and left on my own accord. I was not pushed out, or made redundant as part of any re-orgs, small or big. I simply had seen enough.
I left because it is evident that PFE and most big pharmas, are now addicted to the easy path forward: Cut “costs” (people), gut entire organizations rather unthoughtfully, redistribute billions to shareholders in the form of share buybacks and massive dividends, fool the world with great pipeline stories, see stock artificially inflate for 3-4 years and then...
…repeat the cycle when you fail to deliver on the “promising pipeline” by acquiring a large company, with a lot of people and with a lot of synergies so you can cut your way to supporting your stock price.
It should be clear to everyone, that Pfizer has long ago stopped to be managed like an R&D company. Frank D’Amelio killed Lucent, another intense R&D company, by doing what he is doing now to PFE, and Ian is fully supporting him:
- Convince a board that it is easier to get 11% IIR by giving money back to sharehoders rather then invest in new assets (not very hard argument to make)
- Demand that internal pipeline projects / licensing activities return 20% IIR (that’s his threshold - he is the CFO – he can do what he wants, and Ian supports him)
- Point to all the pipeline / BD failures along the way every time someone asks for money (not very hard to do given the industry success rate)
- Use that as a rationale to support #1 and #2 thereby killing all new investments
- Manage the budget from a pure top down perspective (I need X in earnings to maintain my stock price/ increase it, which translates in X results, which means X expenses… which means arbitrary cuts across the board until we achieve these #s – PCBU: here is what you have to play with… go figure it out)
- Starve the business of funds they need to take appropriate risk
You only need the following data point to prove the case above and it is the following: The largest acquisition that PFE has done since King (4+ years ago) is the acquisition of NextWave (2012) for $275M upfront + potential milestone.
We all love the old EPBU, but really? Notwithstanding the merit of the NextWave acquisition (which was solid), this fact implies that NW is the best company that Pifzer could find worth buying in 4 years? That concept is so laughable that it is not worth entertaining.
Therefore, the only remaining hypothesis is that PFE’s Sr Management killed every other serious consideration for investments by installing a culture of “fear”:
- Fear to stick your neck out
- Fear to ask for $$ from Frank / ELT for an investment that you know has a good chance of failing and therefore will hang around your neck like an albatross
- Fear of being thrown in your face all the “failures” the BD / P&Ls / R&D organizations are “responsible for” – something that is not hard to do, and should have no place in the pharma industry
I can tell you that this culture is alive. It is real. I have seen it and I have lived it. And it is crushing Pfizer’s future because it is supporting the premise that the ONLY $$ worth spending, is a dollar back to shareholder.
Losing our commercial leadership
If we only had to deal with a lack of investments, we could at least count on the profits generated by our new product launches to replace our patent cliff, right? After all, Ian has promised us that once the innovative core delivers, well… fear not! The mighty Pfizer marketing machine will deliver and save the day!
Only it hasn’t turned out to be that way… and the reason is really simple:
Pfizer’s ultra-compliant approach to marketing in the US has taken a paranoid dimension which is limiting our ability to develop productive relationships with doctors by “dumbing down” all of our marketing messages/tactics (you know this well!!) even those that are within the bounds of the law! Our regulatory, lawyers, medical and compliance colleagues are so afraid to make a decision that can get them reprimanded / fired, that they are simply paralyzed. And so we simply stick to the most basic of messages, while our competitors take much more creative approaches (all within the bounds of the law) to promote their assets.
The results (and don’t believe whatever Ian/ Frank are saying on conference calls):
- Eliquis… underperforming
- Xeljanz… underperforming
- Other launches… underperforming
- Future launches… will underperform as well if that is not fixed
The result is that we are witnessing the death of an organization. Without proper investment and without the ability to deploy our marketing assets, PFE is doomed to play the mega merger game to sustain its stock price tough cost cutting, layoffs, etc.
It is time for Ian to go. It is time for Frank to go. And it is time for PFE to return to the basics: love of drug development which will create differentiated drugs that PFE can then market with creative yet lawful marketing tools and tactics, creating a self-sustaining growth engine not dependent on old and tired financial gimmicks.
I left because it is evident that PFE and most big pharmas, are now addicted to the easy path forward: Cut “costs” (people), gut entire organizations rather unthoughtfully, redistribute billions to shareholders in the form of share buybacks and massive dividends, fool the world with great pipeline stories, see stock artificially inflate for 3-4 years and then...
…repeat the cycle when you fail to deliver on the “promising pipeline” by acquiring a large company, with a lot of people and with a lot of synergies so you can cut your way to supporting your stock price.
It should be clear to everyone, that Pfizer has long ago stopped to be managed like an R&D company. Frank D’Amelio killed Lucent, another intense R&D company, by doing what he is doing now to PFE, and Ian is fully supporting him:
- Convince a board that it is easier to get 11% IIR by giving money back to sharehoders rather then invest in new assets (not very hard argument to make)
- Demand that internal pipeline projects / licensing activities return 20% IIR (that’s his threshold - he is the CFO – he can do what he wants, and Ian supports him)
- Point to all the pipeline / BD failures along the way every time someone asks for money (not very hard to do given the industry success rate)
- Use that as a rationale to support #1 and #2 thereby killing all new investments
- Manage the budget from a pure top down perspective (I need X in earnings to maintain my stock price/ increase it, which translates in X results, which means X expenses… which means arbitrary cuts across the board until we achieve these #s – PCBU: here is what you have to play with… go figure it out)
- Starve the business of funds they need to take appropriate risk
You only need the following data point to prove the case above and it is the following: The largest acquisition that PFE has done since King (4+ years ago) is the acquisition of NextWave (2012) for $275M upfront + potential milestone.
We all love the old EPBU, but really? Notwithstanding the merit of the NextWave acquisition (which was solid), this fact implies that NW is the best company that Pifzer could find worth buying in 4 years? That concept is so laughable that it is not worth entertaining.
Therefore, the only remaining hypothesis is that PFE’s Sr Management killed every other serious consideration for investments by installing a culture of “fear”:
- Fear to stick your neck out
- Fear to ask for $$ from Frank / ELT for an investment that you know has a good chance of failing and therefore will hang around your neck like an albatross
- Fear of being thrown in your face all the “failures” the BD / P&Ls / R&D organizations are “responsible for” – something that is not hard to do, and should have no place in the pharma industry
I can tell you that this culture is alive. It is real. I have seen it and I have lived it. And it is crushing Pfizer’s future because it is supporting the premise that the ONLY $$ worth spending, is a dollar back to shareholder.
Losing our commercial leadership
If we only had to deal with a lack of investments, we could at least count on the profits generated by our new product launches to replace our patent cliff, right? After all, Ian has promised us that once the innovative core delivers, well… fear not! The mighty Pfizer marketing machine will deliver and save the day!
Only it hasn’t turned out to be that way… and the reason is really simple:
Pfizer’s ultra-compliant approach to marketing in the US has taken a paranoid dimension which is limiting our ability to develop productive relationships with doctors by “dumbing down” all of our marketing messages/tactics (you know this well!!) even those that are within the bounds of the law! Our regulatory, lawyers, medical and compliance colleagues are so afraid to make a decision that can get them reprimanded / fired, that they are simply paralyzed. And so we simply stick to the most basic of messages, while our competitors take much more creative approaches (all within the bounds of the law) to promote their assets.
The results (and don’t believe whatever Ian/ Frank are saying on conference calls):
- Eliquis… underperforming
- Xeljanz… underperforming
- Other launches… underperforming
- Future launches… will underperform as well if that is not fixed
The result is that we are witnessing the death of an organization. Without proper investment and without the ability to deploy our marketing assets, PFE is doomed to play the mega merger game to sustain its stock price tough cost cutting, layoffs, etc.
It is time for Ian to go. It is time for Frank to go. And it is time for PFE to return to the basics: love of drug development which will create differentiated drugs that PFE can then market with creative yet lawful marketing tools and tactics, creating a self-sustaining growth engine not dependent on old and tired financial gimmicks.