Transformers

By Julia Puppe, Editor

Pfizer is undergoing a transformation. Since the failure of its promising pill Torcetrapib, all of Pfizer’s operating divisions have been closely examined to decide how they can help the company address the challenges ahead. NGP spoke with Pedro Lichtinger, President, European Pharmaceutical Operations at Pfizer Inc., about his new priorities.

Back in December 2006, everyone asked Pfizer the same question: what now? The company dropped a drug that many doctors and analysts had hoped could be the biggest medicine ever. Pfizer’s problem child Torcetrapib had been designed to prevent heart attacks and strokes by raising the ‘good cholesterol’ HDL. However, the pill failed, and so did hopes for projected annual Torcetrapib sales of up to €11.1 billion.

Pfizer made nearly €11.1 billion last year. It also still has a blockbuster: the best-selling drug in the world, Lipitor, which generates around €9.5 billion in annual revenue – selling more than the next two bestseller drugs put together. However, to answer the above question: now is the time for change at Pfizer.

Analysts claim that drugs representing 41 per cent of Pfizer’s sales are coming off patent between 2010 and 2012. Amongst them Lipitor, which is expected to lose patent protection in 2010 or 2011. Pfizer is to become a leaner organization with a more efficient cost structure in preparation of this and other challenges that lie ahead.

Challenges
“In the past, few pharmaceutical industry executives have had to contend with the combined challenges of pricing pressures, slow market growth and increasing government interventions – but this is what we face today,” says Pedro Lichtinger, President of European Pharmaceutical Operations at Pfizer Inc. He continues: “The scale of our challenge is added to by not-too-distant patent expiries on some of our most successful medicines and the increasingly high scientific hurdles that our scientists in R&D must overcome.”

One of his most important aims is to understand his customers better and work with them to develop solutions that benefit both them and Pfizer. This, he points out, will involve working with stakeholders, from patients through to payers, to ensure they recognise not just the clinical, but also the economic and societal value of medicines.

“It will take time and is likely to require some new thinking about how we operate,” Lichtinger admits, adding: “For example, I remain convinced that Europe needs to take a longer term view of the cost of medicines, one that regards money spent on medical treatments as an investment in a nation’s health and economic prosperity. Such an approach is vital if patients are to benefit from innovative new treatments as soon as regulators approve them for use. “

Small and agile
One of Pfizer’s main priorities has been to transform all its operating divisions to help the company address some significant challenges it is facing. “We are creating smaller and more agile business units, within which leaders with greater control and autonomy will make swifter decisions. We expect to see tangible benefits in both the short and long term, but our overall goal is to continue to improve productivity – which means delivering to patients more medicines of more value more rapidly,” explains Lichtinger.

Despite the loss of Torcetrapib, Pfizer may indeed deliver more medicines to patients soon. After all, the company has the industry’s largest development pipeline, which currently comprises 99 programmes: 38 in phase I, 47 in phase II, 11 in phase III and 3 in registration. However, while this is impressive, the inherent uncertainty of science means that it is no guarantee of future success.

“We have set ourselves the goal of delivering four new medicines a year by 2011 from our internal R&D and two new medicines a year by 2010 from external sources. To realise this goal we are creating an agile and flexible R&D organisation that encourages innovation, investing in the most promising science and technologies and looking to supplement our own science with external collaborations,” says Lichtinger.

The changes Pfizer is currently implementing in R&D are designed to free up funds for investment in three areas. Firstly: funding Pfizer’s growing pipeline. By 2009, the company expects to triple its phase III programmes from five to 15. Secondly: increasing investment in biotherapeutics. Thirdly: establishing further scientific collaborations with external organisations.

Biotherapeutics
Pfizer is already a major player in biotherapeutics – it has 14 such programmes in its development pipeline and several others in pre-clinical development – but is expanding its presence and expertise in this area. “Our scientific knowledge of biotherapeutics is increasing all the time and they represent our best chance to attack many serious diseases,” states Lichtinger. “Their R&D and manufacture are technically challenging and cutting edge, but our ability to design and build these complex large molecules is growing rapidly.”

The potential of biotherapeutics to treat conditions in multiple therapy areas is one of the reasons why Pfizer continues to increase its investment in them. “We want to deliver new biotherapeutic therapies in many of our 11 R&D therapy areas, including cancer, Alzheimer’s and rheumatoid arthritis,” Lichtinger adds, “and expect them to comprise 20-25 percent of our pipeline in the near future.”

Collaborations
Like many other big pharmaceuticals, Pfizer is scanning the horizon to identify promising business development opportunities and supplement its in-house research with the most promising external science and technologies. Earlier this year it announced a major collaboration with Bristol-Myers Squibb to develop and commercialise apixaban, an anticoagulant being studied for the prevention and treatment of venous and arterial thrombotic conditions. In a separate agreement, the two companies are also working together on the R&D of advanced pre-clinical compounds to treat metabolic disorders, including obesity and diabetes.

Pfizer is also seeking to harness early stage clinical candidates and the most promising technologies being developed outside its own walls – demonstrated by its acquisitions of companies like PowderMed and BioRexis. And Lichtinger is keen to highlight the company’s interest in the most early stage research. “We recently established a science incubator in La Jolla, California, to help fill the need for funding and support of early stage science,” he points out. “It has received a warm welcome from both the biotech community and academic scientists, and in July our first occupants, Fabrus LLC, moved into the facility. It’s very early days, but Fabrus’s antibody technology could lead to new treatments in many therapeutic areas.”

Blockbusters
With a solid transformation plan, Pfizer seems set to overcome the loss of Torcetrapib. But which are the promising compounds in the industry’s largest pipeline with the potential to become the world’s next best-seller once Lipitor is no more? “Underlying this question is the assumption that companies cannot do without so-called blockbuster medicines,” says Lichtinger, shaking his head. “While blockbusters certainly help, we believe that future growth will be driven by a broader portfolio of products – one which comprises more small and medium size medicines alongside those to treat the most prevalent medical conditions. This vision is based on scientific advances that are starting to deliver more targeted treatments in numerous therapy areas. We will also need to focus more on our mature medicines to make sure their clinical benefit is fully understood and that they benefit as many patients as possible.”

Of the medicines Pfizer has launched recently, Lichtinger believes that Champix, a novel treatment for smoking cessation, and Lyrica, the first and only FDA-approved medication to treat both diabetic peripheral neuropathy (DPN) and postherpetic neuralgia (PHN), are two with great potential. “Champix is the first prescription only non-nicotine medicine specifically designed to help people stop smoking and to date has been used by more than two million people in the US,” says Lichtinger. “And Lyrica is an important advance in difficult to treat conditions,” he adds.

“In R&D, we have a burgeoning oncology portfolio. We are studying Sutent’s potential to treat a wide range of cancers and Axitinib, a next generation anti-angiogenesis agent, appears potent, selective and has shown robust anti-tumour activity. We also have promising candidates in development for obesity, osteoporosis and neurological conditions,” says Lichtinger.

Counterfeits
Patent loss isn’t the only threat Lipitor is facing. In the twelve months to October 2006, Pfizer also reported three separate incidents of counterfeit Lipitor within its UK supply chain. “Our concern about counterfeit medicines is the danger they pose to the health and safety of patients,” Lichtinger points out. “There is plenty of evidence to suggest that counterfeiting is on the increase, both globally and in Europe, and we believe this poses a clear risk to patients. Since August 2004, there have been 14 instances of counterfeit medicines in the UK legitimate supply chain – 10 of which have reached the patient. These include three cases of counterfeit Lipitor. We have invested heavily to better secure our medicines and to track down and prosecute the counterfeiters who are exploiting the needs of patients.”

There are a number of ways in which counterfeits can enter the legitimate supply chain, but one definite weak point is the parallel trade of medicines across Europe. Medicines are traded across markets as a commodity based on volume and price and they can pass through dozens of intermediary traders before reaching the patient. Lichtinger believes this practice should be stopped. “It is a gateway through which counterfeits are entering legitimate supply chains in Europe and it brings little or no benefit to patients and payers. Addressing the problem requires not only action by the pharmaceutical industry, but by the institutions and member states of the EU.”

In March 2007, Pfizer signed an exclusive UK distribution deal with UniChem. The
new distribution arrangement allows Pfizer to take full responsibility for its medicines from the point at which they leave its manufacturing centres until they are sold to the pharmacists and doctors who dispense them.

“There are a number of reasons why we wanted to introduce a Direct-To-Pharmacy (DTP) distribution model in the UK, but enhancing patient safety was our primary concern,” says Lichtinger, adding: “The greatest benefit of the new model is that we now have full visibility and control over the medicines we supply in the UK. Because of this we are better able to guarantee pharmacies that the Pfizer medicines they receive are genuine and will be delivered to them in optimum condition. Through this direct relationship with pharmacists, we are also in a better position to provide them with direct clinical support relating to our medicines – which we have researched and developed over many years and know more about than anyone else. We firmly believe the new arrangement will improve patient safety and will help bring about better interactions between patients and their pharmacists.”

Supplier consolidation
What about potential pitfalls involved in supplier consolidation? “There will always be some criticisms when established ways of doing business are changed,” argues Lichtinger. “But that should not mean systems are not improved upon as and when necessary. In the case of DTP distribution in the UK, we reviewed the situation carefully and decided to make changes to, among other things, gain full visibility of the supply chain and enhance patient safety. It’s interesting to note that since we made our changes several other companies have announced plans to adopt similar models. We are extremely pleased that DTP has worked well and to date we have delivered over 7 million packs of Pfizer medicines and 99.7 percent of all orders have been delivered on time and in full.”

Recent reports suggest that Novartis, Sanofi Aventis and Eli Lilly are also reviewing their drug distribution, while AstraZeneca (AZ) signed a similar deal in April 2007 with UniChem and AAH Pharmaceuticals. AZ, however, extended the implementation phase to early 2008 (see p. 82).

Lichtinger genuinely believes that the industry has a vital role to play in helping governments across Europe find solutions to the challenges that pervade their health systems today. He is determined Pfizer will work hard to understand the needs of other stakeholders in healthcare provision and adapt to meet these wherever possible.

Innovative medicines
While there are many challenges, Lichtinger finds perhaps the greatest is ensuring that patients in Europe have access to innovative new medicines. This is proving increasingly difficult in many countries as payers use health technology assessment (HTA) to ration treatment and cut their medicines bill. Not only does this deny patients treatments of clinical benefit, it also creates treatment inequalities, both within countries (the UK being a good example) and from one country to another.

“In my opinion,” says Lichtinger, “it represents a myopic approach to healthcare, one in which medicines are regarded as a short term cost rather than a long term investment – and one which undermines social and economic prosperity. Also, while HTA is a valuable tool, its credibility in the eyes of patients could be eroded if we reach a point where it is primarily seen as an instrument for limiting access to new therapies.”

Improving the situation, Lichtinger believes, will require much dialogue, some original thinking and a commitment by the industry to work differently with other healthcare stakeholders to demonstrate that medicines are not just safe and effective, but also value for money.

Pedro Lichtinger, a Vice President of Pfizer Inc. since October 2000, is Pfizer’s newly appointed President European Pharmaceutical Operations. In addition, Lichtinger is a member of the Pfizer Latino Leadership Council, a group he chaired in 2004, and has been elected by as the 2006 Tri-State United Way Campaign Chair. Formerly the President of Pfizer Animal Health, Lichtinger has over 25 years experience in the animal health industry in the US, Latin America and Europe. Prior to his appointment as president, Lichtinger served in a variety of management positions within the animal health divisions of Pfizer and SmithKline Beecham.

1. A native of Mexico, Pedro Lichtinger received an engineering degree from the National University of Mexico in 1976, and an MBA degree from the University of Pennsylvania’s Wharton School of Business in 1978.
2. In the fall of 2005, Pedro Lichtinger joined the board of the Brazil Foundation, an organisation that generates resources for programmes that promote social change in Brazil.