Pfizer’s next big drug for heart disease (torcetrapib which was slated to replace Lipitor) has bombed in trials, causing sufficient deaths that the trials have been ended early and development has been stopped. This is obviously dreadful news for Pfizer, and I assume that the stock will be well done on Monday. But that’s how the pharma business is supposed to work—big bets on new blockbusters may not pan out, but others will do so.
But beyond that it is also a pointer that some of the easy “targets” such as heart disease and diabetes may be nearing their natural limits for medication therapy, and that lifestyle changes, the old “diet and exercise” may really be the best way to deal with them—allied of course with the generics which were the blockbusters of yesteryear. Almost all the growth in the drug business in the last few years seems to be in niche and very expensive biologics for virtually orphan diseases.
Which all means that the cuts in the sales-force that Pfizer announced last week are likely to be the first of many. Big Pharma is going to have to figure out how to get to a model beyond hitting every doctor and every patient on behalf of a few big blockbusters. The challenge for the rest of the system is to figure out how to use both the new niche drugs and the old blockbusters in the most effective manner.
UPDATE: Pfizer stock is off 12% in relatively early going, down to $23 and change. Ouch! Although it’s still above the lows of a year ago (Just). If you are a bitter shareholder this morning, you should thank the lobbying dollars sunk into Part D’s passage in 2003 for the industry profit recovery that’s kept it afloat this far in 2006. You should also worry about what comes next on that score!