Management consultants are not big fans of CEO's who take major business decisions based on their gut feeling and refuse to do quantitative analysis. At least that is the impression I got watching Hank McKinnell go about putting together a Celebrex strategy. As I said last week, Pfizer was pursuing a wrong Celebrex strategy and the numbers are here to show (Celebrex prescriptions dropped by half) that McKinnell was not thinking it through.
I was hoping that after watching Merck's flawed Vioxx recall strategy, another pharma CEO will pay attention and learn from it. The manner in which was Vioxx was recalled and the whole process managed by Merck has been very interesting and there are many great lessons for all executives (Related article: Vioxx recall lessons for business executives). But what McKinnell did was totally opposite to what I had said last week: Pfizer, like any other firm, should have managed its appetite for risk.
From here on too, it is going to be downhill for Pfizer since the firm lost direction after disturbing data emerged about Celebrex. While it is a big deal for a blockbuster drug to have such bad news, Pfizer did not do a great job of convincing arthritis patients how its drug was different from Vioxx when they both belong to the same Cox-2 category.
Even doctors have not agreed with Pfizer's arguments. Dr. Eric Topol, the world-famous cardiologist goes on to say that, "With the considerably higher cost, marginal efficacy, and known cardiovascular risks of the remaining agents on the market, valdecoxib (Bextra) and celecoxib (Celebrex), it would seem prudent, at the least, to avoid using these agents as first-line therapy." According to The New York Times, doctors for years have not prescribed Celebrex because they sensed something was not right with the drug even though they did not have access to huge amount of data.
How to develop a winning risk management strategy?
I was hoping that after watching Merck's flawed Vioxx recall strategy, another pharma CEO will pay attention and learn from it. The manner in which was Vioxx was recalled and the whole process managed by Merck has been very interesting and there are many great lessons for all executives (Related article: Vioxx recall lessons for business executives). But what McKinnell did was totally opposite to what I had said last week: Pfizer, like any other firm, should have managed its appetite for risk.
From here on too, it is going to be downhill for Pfizer since the firm lost direction after disturbing data emerged about Celebrex. While it is a big deal for a blockbuster drug to have such bad news, Pfizer did not do a great job of convincing arthritis patients how its drug was different from Vioxx when they both belong to the same Cox-2 category.
Even doctors have not agreed with Pfizer's arguments. Dr. Eric Topol, the world-famous cardiologist goes on to say that, "With the considerably higher cost, marginal efficacy, and known cardiovascular risks of the remaining agents on the market, valdecoxib (Bextra) and celecoxib (Celebrex), it would seem prudent, at the least, to avoid using these agents as first-line therapy." According to The New York Times, doctors for years have not prescribed Celebrex because they sensed something was not right with the drug even though they did not have access to huge amount of data.
How to develop a winning risk management strategy?
- Take your time. There was no need for Pfizer to push Celebrex and Bextra as hard as it did after the recall of Vioxx. Similarly, there was no need to defend Celebrex so strongly after NIH found that Celebrex indeed increased the risk of heart attacks.
- Respect your customer. Never make your customer feel stupid or take that "We know what is best for you" attitude. Merck did it all along and Pfizer assumed that arthritis patients were stupid.
- Under-promise and over-deliver. While there is tremendous amount of skepticism among doctors and scientists about the safety of Cox-2 drug, Pfizer has been saying something entirely different. If tomorrow it is proved that Celebrex is indeed a dangerous drug, there is enough reason to send McKinnell to spend the rest of his life in jail. So when you are in doubt (because no one knows), better accept the reality till more facts come out. If you have a better mousetrap everyone will eventually find out. Merck tried to beat its drum for five years that Vioxx was a great drug (though no one knew and some in the medical community actually thought it was a dangerous drug) but the truth did come out and now it is almost over for Merck. (Related article: Merck is a classic example of shareholder value destruction)
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