The "total lack" part comes, naturally, from Pfizer's history. This would be the biggest deal in the pharmaceutical industry since. . .well, since the last time Pfizer did this, swallowing Pharmacia-Upjohn in 2003. They've bought one large company after another (and several small ones), becoming the largest drug company in the world along the way. But there's a point that I've hammered on repeatedly: that as a research-driven company grows larger, everything scales except research productivity. We don't know how to increase that, sad to say. (Sudden apparent upswings are often due to luck, anyway, while always keeping in mind Pasteur's line about fortune favoring the prepared mind). So as your company gets bigger, you can deploy larger sales forces, run bigger clinical trials, and chew through the piles of regulatory paperwork more quickly--but all these will only avail you if you have drugs and drug candidates to put into the hopper.
Pfizer's put itself in the position of Lewis Carroll's Red Queen: they have to run as fast as they can to stay in one spot. Their patent on Lipitor, the world's most profitable prescription drug (which they got by buying Warner-Lambert), will be running out soon, and no one has ever tried to replace a compound that sells over ten billion dollars a year. Their internal attempts to find a huge hit as a replacement have mostly come to nothing, expensive and painful nothing. And not all their external deals have worked out, either - the Pharmacia takeover was largely done to get Celebrex, the Cox-2 drug that looked like a huge winner at the time. But that whole area blew up spectacularly with Merck's Vioxx troubles, in keeping with the unofficial motto of the whole drug industry: "Ya Never Know".
So the fear, among scientists like me, is that Pfizer is going to take another productive research organization, raid it for what it considers to be of immediate value, fire a lot of people, and then take the rest and do whatever it is they do to them to Pfizerize their productivity. And then in a few years, they'll do it again. But for now, believe me, other companies are breathing a bit easier. The python has decided to eat someone else. This is not anyone's idea of a sustainable business model. What one of those might look like will be the subject of some future posts. . .
Derek writes:
"Their internal attempts to find a huge hit as a replacement have mostly come to nothing, expensive and painful nothing. And not all their external deals have worked out, either ... in keeping with the unofficial motto of the whole drug industry: 'Ya Never Know'."
This makes the drug industry look similar to the movie industry: always looking for the next popular hit and never sure if one will turn up. Each attracts customers by saying that a dose will make you feel better for a limited time.
But with drugs, each member of the attracted public, instead of buying a ticket to a particular movie just one time, buys bottle after bottle of the same drug -- as if buying ticket after ticket again and again to re-watch the same movie. And with patent protection, the producer (drug company) can be sure of having no competition, unlike the entertainment biz.
And as to insurance, the analogy works to cable TV subscriptions and NetFlix: you pay a regular "entertainment insurance premium" and in return get no-additional-cost access to a defined range of entertainment benefits.
I would be interested to know whether investment in the drug industry is analyzed with an eye to similarities of that industry to the entertainment industry.
Derek is the best commentator I read on the subject of new drug development. I do tend to slightly disagree, however, with his take on this. Those of us who have followed his work at "Pipeline" (Corante) for a while have read a lot of shots at Pfizer and their approach to buying and licensing the discoveries of others.
I wonder if this perspective isn't wedded a bit to the business model that emphasizes a need for lots of PhD medicinal chemists doing ground-up R&D to develop new products? I simply don't see a one-size-fits-all obvious route to prosecuting the business.
When I was in a large company in the aerospace world, we were always complaining about small upstarts who came in with cute new product ideas, while our own R&D operation was a slow-moving iterative, gradual improvement behemoth. In that business, the best and most creative engineers didn't want to get bogged down in corporate nonsense, they tried new starts and academic research, and then sold or licensed out for the test and final marketing phases. That is pretty much how Pfizer seems to operate, and it makes some sense to me.
In my world, I deal with all the pharmas- and I find that Pfizer is one of the better operations to work with- sensible, businesslike, and mature, especially compared with the sharks at Merck and Novartis. New products often don't spring out of big projects, they are frequently almost accidental, and the best approach is often large sample sizes of new ideas entrepreneurially created in the mixed marketplace, rather than overly focused concentrations that get us incremental changes in, say, dosages.