The marriage of Pfizer and Wyeth

The news this morning is that Pfizer is in talks to buy Wyeth, and apparently has been for some time. For those of us in the drug industry, this headline is a weird mixture of surprise and, well, total lack of surprise.

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. . .