Who needs drug companies?

When Pfizer, the world’s foremost drug company announced on January 22, 2007 that it would reduce its workforce by 7,800, close a number of manufacturing and research locations, and revamp its business practices, it was not that industry observers did not anticipate these measures. This is so in particular considering the seemingly endless difficulties that the pharmaceutical industry faces in recent times. Increasing competition of cheaper generic drugs, setbacks in new product development, and what many consider lingering image problems emanating from various sources, plague the industry and hurt its bottom-line. That Pfizer announced it was laying off 2,200 only a month earlier, and slashed its American sales force by 20%, even if these layoffs still represented just 10% of the company’s global workforce, is no doubt, nonetheless instructive of the state of affairs not just in Pfizer, but in the entire pharmaceutical industry. It is indeed, the exemplar of the fundamental rather than incremental evolution that the new chief executive officer of Pfizer termed imperative, and must happen now, which many would argue in fact, not just in the company, but also industry wide. With profit-making drugs losing patent protection in many of these firms, generics creeping in from all directions, new drug development not keeping pace, sales force operations bursting at the rims, literally, the resulting chaos likely to be counter-productive, regarding prescription rates by doctors, the need for reorganization is no doubt evident. Pfizer, for example, wants to reorganize its sales force, and its research and development (R&D) to concentrate on specific diseases, which begs the question which diseases, and what the consequences for healthcare would be, considering not just the pivotal role of the company in drug manufacturing, but were its competitors to follow suit. This raises fundamental issues that should concern us all regarding not just the future of the pharmaceutical industry, but also of healthcare delivery, not to mention its implications for many other domains, outside these two.


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