There is a saying that you can’t teach an old dog new tricks. The implication is that it is difficult to make someone change the way they do something when they have been doing it the same way for a long time. This saying can also be applied to corporations where leadership lacks the vision to foresee a changing marketplace or attempts to implement a poorly designed strategy.
Some pharmaceutical companies are taking a huge risk if they fail to successfully adapt and reverse the current trend of diminishing returns for dollars being poured into R&D. Eight of the top 10 pharmaceutical companies have a billion-dollar drug going off patent by the end of 2012, and 6 of those companies are based in the United States. The biggest name on the list, Pfizer, has the biggest drug going off patent, Lipitor. To be sure, I would not yet label Pfizer as being in dire straits. However, if it fails to be visionary in its business approach, tougher times could be on the horizon. This month’s feature story on page 14 is an interview I conducted with John Hubbard, senior VP and worldwide head of development operations for Pfizer. He joined Pfizer, a company with a rich 162-year history, shortly before the unexpected departure of then CEO, Jeff Kindler, who resigned in December of last year. Hubbard is responsible for the clinical trial management from Phase 1 to 4 of more than 700 clinical projects currently taking place around the globe. His favorite topic of late is disruptive innovation, a term popularized by Harvard business professor and author Clayton Christensen. Hubbard is part of a Pfizer management team looking to “teach an old dog new tricks” and reinvigorate the Pfizer innovation engine.
Speaking of old tricks, some of the most popular techniques for staving off patent expiration have included getting a new indication for a medication and/or changing a product’s formulation. Another trick often employed is what I like to refer to as the litigation game. Abbott successfully implemented two of these tactics to hold off generic competition for its billion-dollar cholesterol-lowering drug TriCor. A company was preparing to launch a generic version of TriCor (originally sold in Europe in 1975) in 1999. The sale of a generic version of TriCor was stipulated to be March 28, 2011, at the earliest. That date has come and gone, and there remains no generic version of TriCor. Teva remains the company most likely to bring a generic version, but not before July 1, 2012. Personally, I do not have a problem with pharmaceutical companies utilizing these tactics or even the pay-for-delay strategy — the process of a branded company paying a generic company to delay the introduction of a generic drug. In my opinion, none of these tactics deliberately hurts the patient, with the exception of possibly negatively impacting their wallet.