At the Pfizer annual analyst meeting on November 30, 2004, Joseph Feczko, Chief Medical Officer, is reported to have said that while both Celebrex and Bextra are similar to Vioxx (they all belong to the category Cox-2 inhibitors), Pfizer drugs are different from Vioxx on a chemical level. Additionally, while other arthritis drugs can increase blood pressure, Celebrex seems not to, he added.
Since then, it has been found that Bextra is actually quite a dangerous drug and a new warning has been added. And in less than two weeks of that November 30 meeting, Pfizer is now reporting that Celebrex increases risk of heart disease as well. So either Feczko was totally clueless about what was going on at Pfizer or else he was simply trying to what most executives do at analyst meetings - tell them what they want to hear. As a management consultant, I know this really well.
The authorities in Germany have gotten so concerned about the safety of Cox-2 inhibitor drugs that they have severely restricted prescription of these drugs. Since the recall of Vioxx at the end of September, American drugmakers have attracted mostly negative attention. In any case, drug companies have not made themselves very popular among Americans by fighting hard for not allowing import of prescription drugs from Canada. Then there are additional reports that the campaign contributions made by pharmaceutical sector in recent elections and the hard work of hundreds of lobbyists from the pharmaceutical sector is paying off: Americans may soon lose their right to file class action lawsuits.
In other words, American drug companies have a serious problem and they are not dealing with it the right way. No company ever won over the market forces by using regulatory mechanisms (this is the United States, not Soviet Union, Guys) and also be alienating its core customer base. The manner in which Merck has handled the recall of Vioxx, how many people can now trust another drug made by Merck?
I have been repeatedly saying that the drug companies need to make structural changes in their business models. It is quite understandable that they are operating in a tough business environment (who said business was easy?), but rather than making changes that they need to make in order to adapt to the new realities they are looking for shortcuts, particularly with the help of friends in Washington DC. This might give them some short-term relief, but only those companies that adapt to the new realities will survive.
Merck has chosen the wrong battle to fight and it is very unlikely that it will survive. Most likely it will file for bankruptcy (remember companies that made deadly asbestos and did not want to admit that they did any wrong?) or will be sold in pieces. A similar fate awaits Pfizer if it follows a flawed strategy like that followed by Merck.
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