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Pfizer’s CEO Jeff Kindler stopped by BusinessWeek for lunch yesterday. Before a firing line of reporters and editors, he tackled some tough questions on the company’s pending mega-merger with Wyeth, the potential for health care reform, and other pressing issues facing his industry. Here are edited excerpts from our conversation:
Q: What are the biggest challenges Pfizer is facing today?
A: The biopharmaceutical industry in general is experiencing very significant transformational change. R&D productivity is a challenge for all of us. That’s particularly a challenge in light of drugs going off patent. In our case, we have a medicine that’s helped more people than any medicine in the world—Lipitor—which will be losing its exclusivity at the end of 2011. Ours was a business that put a great deal of emphasis on primary care, on chronic conditions, in the developed world and the U.S. in particular. That’s why we were successful with big drugs like Lipitor. But we needed to make some changes. Now, accelerated dramatically by our acquisition of Wyeth, we’re going to be in a position to compete in a much more diversified set of opportunities: Primary care, specialty care,oncology, animal health, consumer health. We’ll provide a range of healthcare solutions from prenatal vitamins to infant formula all the way, hopefully, to treatments for Alzheimer’s disease. We’ll be in the developed world and the developing world.
Q: The Wyeth acquisition brought you back into the field of consumer products, just a few years after Pfizer sold its consumer business to Johnson & Johnson. Do you think that sale was a mistake?
A: At the time that we sold our consumer business to J&J, it created value and made sense. But as we look ahead now, in the context of the environment we’re in, it’s an opportunity to provide a lot of value to patients and consumers. I don’t look back at decisions that were made prior to my being in this job. I’m looking ahead. And we’re very excited about where we are today.
Q: The conventional wisdom was that big mergers hamper innovation. What do you think?
A: The disruption associated with large transactions has the potential for very significant distraction, particularly in R&D. Our prior big mergers—that of Warner Lambert and then Pharmacia—there’s no doubt had an impact on our R&D organization. I will hasten to add there were significant benefits to those transactions. Warner Lambert brought us Lipitor. It brought us Neurontin. It brought us Lyrica. Pharmacia brought us Celebrex. It brought us Sutent. These were valuable transactions. They brought us people, they brought us talent, they brought us science. The Wyeth deal is different in a couple of ways. First of all, it is not about a particular product. Secondly, we have certainly learned a lot from our prior transactions about how to improve our ability to bring together our R&D organizations in a way that minimizes the disruptive impact.
Q: What’s your impression of the health care reform efforts in Washington?
A: There seems to be a very strong commitment on the part of a lot of people. Nobody seems to have walked away from the table yet. Well some people have walked away from the table. But there’s still a lot of people around the table, and they’re still working. As long as that’s the case, there’s a good chance something’s going to happen.
Q: What’s your view of the debate about generic biotech drugs?
A: We feel very strongly that in order to preserve the ability to innovate for biologics, which provide tremendous promise for addressing tough diseases like cancer and rheumatoid arthritis, we have to provide innovators with the incentive of 12 years of data exclusivity. These are drugs that are extremely risky and costly and challenging to make. To provide anything less than that would really risk the ability or the willingness of people to make those kinds of investments.
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