This supplement to Change at Pfizer: Jeff Kindler (A) deals with Pfizer’s 2009 acquisition of Wyeth — the first mega-acquisition since the world economic crisis.
In February 2009, Andrew Witty, CEO of GlaxoSmithKline (GSK), reflected on his vision for big pharma as a catalyst for change which focussed on two key issues: 1) promoting innovation for the products that treat or prevent neglected tropical diseases and 2) improving access to medicines in the world’s poorest countries. He had announced the creation of the Pharmaceutical Patent Pool and wondered if it was the right strategy to deliver results on these two key issues.
Pfizer Inc., the largest research-based drug company in the world, was faced with multiple challenges, including fierce court battles with generic drug companies over the patents of Lipitor, reduced productivity from research and development, and a changing external health care environment globally, with growing importance of emerging markets. These challenges were set within a business environment characterized by multi-level change and uncertainty.<br><br>The case dwells on the newly appointed chief executive officer’s strategy in transforming a giant pharmaceutical organization by changing its business model, strategy, and structure to foster organic growth and explore external opportunities. Did Pfizer need more change or was it merely a matter of time before the new strategy generated results?
In recent years, many countries with publicly funded healthcare have started using cost-effectiveness analysis (CEA) along with review of clinical data as a tool to assess the overall benefit of a new drug to the society and set priorities with regards to health care budget. Cost effectiveness was formally incorporated into the Ontario drug review system in 1993 and the Canadian drug-review system in 2003. The issue of using cost effectiveness has become increasingly contentious in recent years: some newly approved cancer drugs cost $3,000 to $6,000 or more for one treatment cycle, but their high prices means that they were often classified as being not cost effective. This note reviews many of the competing interests in debates over drug funding and dilemmas about healthcare financing decisions in the presence of limited budgets.