Industry Area: Pfizer is a research-based global pharmaceutical company. The company discovers, develops, manufactures and markets medicines for humans and animals, as well as consumer products.
‘There were times not long ago that drug companies were merely the size of nations. Now, after a frenzied two-year period of pharmaceutical mega-mergers, they are behemoths, which outweigh entire continents. The combined worth of the world’s top five drug companies is twice the combined GNP of all sub-Saharan Africa and their influence on the rules of world trade is many times stronger because they can bring their wealth to bear directly on the levers of western power.’
Pfizer is the largest and richest pharmaceutical enterprise in the world. Fortune® named Pfizer as the fifth-best ‘wealth-creator’ in America. The company is a global leader in human pharmaceuticals, and also has a large array of consumer health care, confectionery, and animal health care products. In 2000, its revenues equalled $29,6 billion (£20,14bn), eight of Pfizer’s pharmaceutical products attained sales of at least $1 billion (£680,4 million) each . Pfizer’s main competitors are Merck, Glaxo SmithKline, Novartis, Brystol Myers Squibb and AstraZeneca.
In 2001, Pfizer has budgeted approximately $5 billion (£3,402 bn) for research and development -more than any other drug company in the world . However, the company is likely to spend even more money on marketing. Extensive marketing practices (e.g. huge TV advertising campaigns) have turned some drugs, like Claritin and Viagra, into household names. According to the Financial Times (26 April 2001), ‘Pfizer has powered its way up the global ranking list to its unassailable position thanks mainly to its marketing prowess.’
The company was incorporated as Charles Pfizer & Co in the US in 1942 but the original business dates back to a partnership founded in 1849. Until the turn of the century this partnership produced only citric acid but then began to expand into other chemicals and pharmaceutical products. A phase of rapid growth began with the production of penicillin in World War II (it was Pfizer penicillin that arrived with the Allied forces on the beaches of Normandy in 1944) and the development of the company’s most famous product, the antibiotic Terramycin in 1949. Based on this strength, Pfizer grew in the 40s and 50s through horizontal integration in the US as well as through internal development.
Under the methodical directive of John Powers, head of international operations and future president and chief executive officer, Pfizer’s foreign market expanded into 100 countries and accounted for $175 million (£199 million) in sales by 1965. It would be years before any competitor came close to commanding a similar share of the foreign market. Pfizer’s 1965 worldwide sales figures of $220 million (£149,7 million) indicated that the company might possibly be the largest pharmaceutical manufacturer in the US. By 1980 Pfizer was one of the two US companies among the top ten pharmaceutical companies in Europe, and the largest foreign health care and agricultural product manufacturer in Asia. Powers guided the company in a new direction with an emphasis on research and development.
By 1989, Pfizer operated in more than 140 countries. Pfizer entered the 90s facing controversy about heart valves produced by Shiley, a Pfizer subsidiary. In 1990, 38 fractures of implanted valves were reported (see also crime section). Pfizer became a household name in the late 90s with its development of the break-through male impotence drug Viagra, which became the world’s fastest-selling pharmaceutical product (until overtaken by another Pfizer brand).
It appears Viagra also had an effect on the company’s senior executives; in 1999 they began forcing their intentions on rival Warner-Lambert, finally harassing the smaller company into a shotgun marriage in the first ever-hostile take-over in the pharma sector. This take-over turned Pfizer into the largest and richest pharmaceutical enterprise in the world.
Pfizer has worked its way up the global ranking list by way of internal growth and development, acquisitions, the licensing of products from competitors (Pfizer generously borrowed research from its competitors and released variants of these drugs. While all companies participated in this process of ‘molecular manipulation’, whereby a slight variance is produced in a given molecule to develop greater potency and decreased side effects in a drug, Pfizer was particularly adept at developing these drugs and aggressively seizing a share of the market), research & development, and by way of comprehensive marketing efforts.
Pfizer’s successful marketing efforts impinged on other companies in the pharma sector. (Pfizer’s modern market campaigns broke tradition in the pharma industry. Pfizer’s Terramycin campaign turned the company –a relative newcomer to the industry—into the largest advertiser in the American Medical Association’s journal. Some companies did not appreciate Pfizer’s ‘hard sell’ tactics and attacked Pfizer. However, after Pfizer’s campaign proved to be highly effective, other companies took a similar lead) It is manifested in the “arms race” of escalating numbers of sales representatives, particularly in the US; the huge pre-launch marketing budgets when companies try to make as big a splash as possible; and aggressive TV advertising campaigns in which drugs are seemingly being treated and presented to the consumer audience as any other consumer product.
Pfizer recently announced a new mission: to become the world’s ‘most valued’ company. Pfizer CEO McKinnell declared that the new mission came about because the old mission set in the 1990s (to lead the pharmaceutical industry) had been achieved. He explains: ‘Becoming most values simply means that we emerge as the company recognised as the best by patients, customers, business partners, and the communities where we live and work. It’s a long term mission focused on making Pfizer’s success a winning proposition for everyone.’
According to the EPA, Pfizer is among the top ten companies in America with the most numerous emissions sources. A landfill and two wastewater lagoons in Ledyard, CT near the Pfizer plant in Groton, Connecticut, are a source of groundwater pollution in the area. According to the Connecticut Department of Environmental Protection (CT DEP), the Pfizer site is active under the CT DEP Site Remediation program. In June 2002, a chemical explosion at the Groton plant injured seven people and caused the evacuation of over 100 homes in the surrounding area.
Pfizer has inherited Wyeth’s liabilities in the American Cyanamid site in Bridgewater, New Jersey. This site is highly toxic and an EPA declared Superfund site. Pfizer has since attempted to remediate this land in order to clean and develop it for future profits and potential public uses. Members of the surrounding communities have stated that the EPA has been coerced into accepting a plan that is affordable for Pfizer but is not a complete/proper remediation plan for the site, detrimental to the interest of the community. The EPA has suggested a remediation plan that includes environmental caps and redeveloping a portion of it in the future. This redevelopment will occur on the site which is located within a flood plain, something the EPA failed to address in their feasibility study released in early 2012. The mayor of Bridgewater, the New Jersey Department of Environmental Protection, and other key community leaders also came out to endorse the plan without considering the amount of increased flooding that is going to take place if such a plan is implemented.[
Pfizer is party to a number of suits stemming from its pharmaceutical products as well as practices of various companies it has acquired or merged with
eg Bjork–Shiley heart valve
Pfizer purchased Shiley in 1979 at the onset of its Convexo-Concave valve ordeal, involving the Bjork–Shiley heart valve. Approximately 500 people died when defective valves failed and, in 1994, the United States ruled against Pfizer for ~$200 million.[
Off-label promotional practices
Main article: Franklin v. Parke-Davis
Access to pharmaceutical industry documents has revealed marketing strategies used to promote Neurontin for off-label use. In 1993, the U.S. Food and Drug Administration (FDA) approved gabapentin (Neurontin, Pfizer) only for treatment of seizures. Warner–Lambert, which merged with Pfizer in 2000, used activities not usually associated with sales promotion, including continuing medical education and research, sponsored articles about the drug for the medical literature, and alleged suppression of unfavorable study results, to promote gabapentin. Within 5 years the drug was being widely used for the off-label treatment of pain and psychiatric conditions. Warner–Lambert admitted to charges that it violated FDA regulations by promoting the drug for pain, psychiatric conditions, migraine, and other unapproved uses, and paid $430 million to resolve criminal and civil health care liability charges. Today it is a mainstay drug for migraines, even though it was not approved for such use in 2004
Bextra settlement of off-label marketing investigation
In September 2009, the United States Department of Justice announced that Pfizer had agreed to pay $2.3 billion to settle civil and criminal allegations that it had illegally marketed four drugs: Bextra, Geodon, Zyvox, and Lyrica “with the intent to defraud or mislead” by promoting the drugs for non-approved uses[examples needed]; this marks Pfizer’s fourth such settlement in a decade. Pharmacia & Upjohn Company, Inc., a Pfizer subsidiary, agreed to plead guilty to mis-branded promotion of Bextra, a felony violation of the Food, Drug and Cosmetic Act. The criminal fine accounts for $1.3 billion of the settlement, and was the largest criminal penalty imposed in American history until the BP plea agreement for the Deepwater Horizon oil spill
In 1996, an outbreak of measles, cholera, and bacterial meningitis occurred in Nigeria. Pfizer representatives traveled to Kano, Nigeria to administer an experimental antibiotic, trovafloxacin, to approximately 200 children. Local Kano officials report that more than 50 children died in the experiment, while many others developed mental and physical deformities. In 2001, families of the children, as well as the governments of Kano and Nigeria, filed lawsuits regarding the treatment. Representing the government is Babatunde Irukera. According to news reports, “[r]esearchers did not obtain signed consent forms, and medical personnel said Pfizer did not tell parents their children were getting the experimental drug.” The lawsuits also accuse Pfizer of using the outbreak to perform unapproved human testing, as well as allegedly under-dosing a control group being treated with traditional antibiotics in order to skew the results of the trial in favor of Trovan. Pfizer denied these claims, and subsequently produced an approval letter for testing from the Nigerian Ethics Committee. The Nigerian government insisted that it was a fake and a panel of Nigerian medical experts agreed that the letter had been concocted and backdated by the company’s lead researcher in Kano. They went on to conclude that Pfizer never obtained authorization from the Nigerian government to give the unproven drug to children and infants.
In 2007, Pfizer published a Statement of Defense letter. The letter makes several claims, including that Pfizer donated 18 million in Nigerian Naira (NGN) (about $216,000 in 1996 US dollars (USD)), that the drug’s oral form was presented as safer and easier to administer, that the administration of Trovan saved lives, and that no unusual side effects, unrelated to meningitis, were observed after 4 weeks.
A more likely reason for Pfizer’s insistence on the oral form is the result of testing trovafloxacin intravenously in 1995, which found that the drug precipitated in saline, making it ineffective in patients receiving IV fluids. This is inferred from an FDA Warning Letter to ex-CEO William C. Steere, regarding Trovan’s compatibility with saline etc., which was omitted from Trovan’s labeling until January 1999, shortly after Pfizer received the letter.
In June 1999, the FDA released a public health statement warning against the use of Trovan except in life-or-death situations, due to high risk of liver failure. In some cases, liver damage occurred after only two days of treatment.
In June 2010, the US Supreme Court rejected Pfizer’s appeal against a ruling allowing lawsuits by the Nigerian families to proceed.
In December 2010, WikiLeaks released US diplomatic cables, which indicate that Pfizer had “used dirty tricks to avoid clinical trial payout”. The company had hired investigators to find evidence of corruption against the Nigerian attorney general to persuade him to drop legal action. Washington Post reporter Joe Stephens, who helped break the story in 2000, called these actions “dangerously close to blackmail.” In response, the company has released a press statement describing the allegations as “preposterous” and stating that they acted in good faith.
Tomorrow : Can you Trust big business? GlaxoSmithKline plc