Pharmaceuticals

What is a doctor’s job? Is it: a) to diagnose illness; b) to treat patients; or c) to persuade other doctors to prescribe a brand-name pill? To those answering c), here is an additional question: do you work for a pharmaceuticals company?

John Gapper

Novartis has done the right thing by scrapping its proposed payment of up to $78m to Daniel Vasella, its outgoing chairman, not to compete against the Swiss pharmaceuticals company. It raises questions not only about Swiss corporate governance but the entire principle of non-compete deals.

Mr Vasella was a dynamic and effective chief executive of Novartis but there is no obvious reason why he needs an extended non-compete agreement any more than another retiring chairman or corporate executive. Read more

Andrew Hill

I can’t help thinking that Jesse Boot and Charles R Walgreen Senior were destined to meet eventually. With Tuesday’s deal between the UK’s Alliance Boots and Walgreens of the US, the paths of the two pharmacy chains, each founded more than 100 years ago, finally cross. Boot – son of the original founder John – was said to have a “talent for business”; Walgreen, though he built his business more slowly initially, “instituted a level of service and personal attention unequalled by virtually any other pharmacy in Chicago”, according to the company history. Read more

“You’re going to need a bigger boat,” says the police chief played by Roy Scheider in the film Jaws, when he first catches sight of the shark. Faced with cancer, diabetes and Alzheimer’s, we need a bigger investment vehicle.

Andrew Hill

Harry Potter and Viagra have more in common than you may imagine. They came to market within a year of each other in the late-1990s; they enjoyed enormous success; and what was a boon for the companies that produced and sold them could turn into a bane as their popularity fades and rivals emerge.

Andrew Hill

Old habits die hard in US corporate governance: Pfizer has just announced it will hand chief executive Ian Read the chairmanship. That re-creates the dual chair-CEO role and goes against the slow US trend towards splitting the two top board jobs.

According to Spencer Stuart, the headhunter, 41 per cent of top US companies now separate the roles (though the chairmanship is too often held by the ex-CEO), compared with 26 per cent in 2001. So, as governance expert Lucy Marcus tweeted on Tuesday, Pfizer’s decision is an “astonishing step backward“. Read more

John Gapper

Whether or not Pfizer’s tactics to preserve Lipitor sales as it loses its patent protection succeed, they are a sobering reflection of the lack of success of big pharmaceutical companies in trying to replicate their past days of blockbuster glory.

Alan Rappeport’s report on how Pfizer is heavily cutting the price of its anti-cholesterol drug to see off generic competition illustrates how important blockbuster drugs from the past remain to Big Pharma.

As Forbes noted in a long piece on Lipitor, this reflects the prolonged squeeze on pharma companies, which have been struggling to come up with new products to replace those now falling off the patent cliff – Lipitor being the prime example. Read more

Andrew Hill

Andrew Witty, GlaxoSmithKline’s chief executive, won plenty of column inches and airtime on Monday with the UK drug company’s offer to supply developing countries with millions of doses of its vaccine against rotavirus gastroenteritis, at a 95 per cent discount to the western market price.

Your first reaction might well be: if $2.50 a shot still covers GSK’s costs, Mr Witty’s making quite a margin on the $50 he charges the developed world for the drug. Read more