strategic-management

250 VIJAYA NARAPAREDDY
the needs of 4 billion people worldwide with incomes of less than $3,000 a year. Another
innovative partnership involves Pfizer and PlaNet Finance, which is examining ways in
which health-care access may be expanded in China.
Good News
In May 2009, Pfizer announced it was giving away more than 70 of its most widely prescribed
drugs, including Lipitor and Viagra, for up to a year to people who have lost jobs
in calendar 2009 and had been taking the drug for three months or more. “Everybody
knows now a neighbor, a relative who has lost their job and is losing their insurance.
People are definitely hurting out there,” Dr. Jorge Puente, Pfizer’s head of pharmaceuticals
outside the United States and Europe, told the Associated Press in an exclusive interview.
“Our aim is to help people bridge this point.”
The 70-plus drugs covered in the new Pfizer program include several diabetes drugs
as well as some of Pfizer’s top money makers, from cholesterol fighter Lipitor to
painkiller Celebrex. Also included are fibromyalgia treatment Lyrica and also Viagra,
used for male erectile dysfunction. The new Pfizer program includes some antibiotics,
antidepressants, heart medications, contraceptives, and smoking cessation products.
Cheaper generic versions are available for most of the drugs. The new program will likely
help prevent patients from switching to cheaper brands or generics through the worst of
the recession and could help retain those taking top-seller Lipitor, which will begin competing
with generic versions in 2010. Many analysts contend that the giveaway is a brilliant
marketing move that will generate low-cost publicity, build consumer loyalty, and
keep inventory from piling up.
Bad News
In September 2009, Pfizer agreed to pay a record $2.3 billion to settle civil and criminal
charges over marketing of its recalled Bextra arthritis drug and three other medicines. The
charges involved representatives of Pfizer promoting drugs for conditions that they had not
been approved for and giving doctors kickbacks to encourage them to prescribe the medications.
This is the largest such settlement in the United States for claims of off-label drug
promotion, topping the $1.42 billion Eli Lilly (LLY) agreed to pay earlier in 2009 for offlable
sales of its Zyprexa schizophrenia drug. Moreover, the $1.3 billion criminal penalty
related only to Bextra is “the largest criminal fine ever imposed in the United States for any
matter,” according to the U.S. Department of Justice. The settlement also involves pain
management pill Lyrica, the schizophrenia treatment Geodon, and the anti-infection drug
Zyvox, as well as nine other medicines.
The world’s biggest drugmaker, Pfizer spent nearly $5.6 million lobbying the U.S.
government in the second quarter of 2009 on health-care reform, government spending on
medication, and patent and trade issues, according to a recent disclosure report. Pfizer
nearly doubled its lobbying spending from the $3.1 million in the year-ago period. The
company lobbied on legislation on numerous health reform provisions, including health
insurance, information technology, electronic prescriptions, drug pricing, allowing generic
versions of expensive biologic drugs, and requiring research comparing the effectiveness
of medications and other types of treatment as well as on U.S. patent reform and on international
patent, market access, and regulatory issues involving at least 20 countries.
Conclusion
Drug firms are reducing, not adding, to their sales forces. By the end of 2008, the number
of pharmaceutical sales representatives in the United States had decreased to 90,000 from
a high of about 106,000 in 2006. In early 2009, Amylin Pharmaceuticals cut 35 percent of
its sales force, or 200 representatives.
For the first time in fifty years, sales of prescription drugs in the United States
declined in 2009 for a variety of reasons. The United States has historically been the industry’s
largest and most profitable area, but now drug companies are looking more and more
to developing countries such as Venezuela. Sales of prescription drugs in developing or
emerging markets increased to $152.7 billion in 2008, up from $67.2 billion in 2003. This