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The Secret History of Pfizer

Here’s a fascinating account at Fortune of the departure of Jeff Kindler as Pfizer’s CEO. The magazine says that they interviewed over 100 people to round up the details, but some of these meetings only feature four or five people in a room, so that narrows things down a bit. It’s also a back-room history of Pfizer over the last ten or fifteen years, and there’s a lot of high-level political stuff that wasn’t widely known at the time:

McKinnell kept boosting R&D budgets, maintaining Pfizer’s “shots on goal” approach — the more compounds you explored, in theory, the more drugs you’d generate. But drugs can take a full decade to be developed and approved, and nothing big would be ready for years.
So McKinnell fell back on the refuge of the desperate pharma CEO: In July 2002 he announced the acquisition of Pharmacia, the industry’s seventh-largest company, for $60 billion in stock. But even as Pfizer struggled to digest this latest meal, McKinnell seemed to spend less and less time at headquarters, becoming head of industry trade groups, funding an institute in Africa to combat AIDS, even writing a book about reforming health care.
That left a power vacuum, and Bill Steere, the former CEO, seemed more than willing to fill it. . .”He says almost nothing,” says a person familiar with Pfizer’s board. “But people look to him to see how he nods and how he moves, because he knows the company better than anyone.”
With Pfizer no longer soaring, internal squabbling intensified. Vexed by what he viewed as Steere’s meddling, McKinnell even tried to terminate his consulting contract. Steere fended off that move. Support for him ran deep on the board: Later, when Steere turned 72, the mandatory retirement age for directors, the board raised it to 73 so he could stick around, then amended the provision again when he hit that limit.
Steere and McKinnell, former friends and colleagues, became mortal enemies. . .

Read the whole thing, if you’re interested in either Pfizer or the way that human beings behave at this level of a large corporation: anonymous letters, secret meetings, all varieties of intrigue. 14th-century Florence can offer little more in the way of power politics. There are those who swim in such waters like fish, but I’ve devoted time and effort trying to stay away.

25 comments on “The Secret History of Pfizer”

  1. David P says:

    Thanks for the heads up, Pfizer sounds like a great place to work!
    Just a note, the opening part talks about Kindler and then the quoted part about Kindler’s predecessor, McKinnell. Not very clear from reading this (especially as they are similar names).

  2. PharmaHeretic says:

    Aren’t large companies a lot like totalitarian regimes- full of intrigue, plots, cliques, generic stupidity , power hungry scumbags and their enablers?

  3. Anonymous says:

    tl;dr version
    McKinnell was forced out in 2002 by Pfizer’s last chairman, Steere, who continued to meddle in the business’ affairs. The replacement, Kindler, was supported by Steere over two other senior executives.
    Kindler had little/no experience in pharmaceuticals, and was unused to a business where it was impossible to know if a research decision was “right” for about a decade. Overcompensating, he micromanaged in a very confrontational manner (contrary to the normal Pfizer culture), but was wracked by indecision, often reversing his own initiatives.
    The HR manager, McLeod, was a snake in the grass. She encouraged the worst of Kindler’s excesses and shielded him from criticism. He in turn doted on her, and she made a ton of cash, generally fiddling while HR burned.
    Eventually Kindler falls as he’s managed to anger basically everyone above and beneath him, Steere included. He is replaced by Reed, and Pfizer, while not doing very well lately, isn’t actively tearing itself to pieces anymore.

  4. corporate_governance says:

    Its really brings it home reading those articles how the egos and ‘games’ played by upper management impacted upon the livelihoods of the thousands of pfizer employees that have been let go over the last few years.
    Of course you could argue that McKinnell shouldnt have let R&D spending get soooooooo big without a nod to productivity resulting in a bloated organisation – but if the story is true then Steere, Kindler and McLeod ruined the company.
    Reed is making the right noises about the current state of pharma and what he is putting place right now getting ‘close to the thinkers’ is a good move – to some it seems odd that they are acting that way for the size and stature of the company, but that is because we have become so used to the last few years of pfizer-madness

  5. MTK says:

    My first reaction to reading that story was that I needed to take a shower.
    My second is “Is this any different than any big organization at the top?”

  6. Chemjobber says:

    Big organization? Small ones are that way too, it seems.

  7. Anonymous BMS Researcher says:

    Fourteenth-century Florence, eh? I hope no pharma companies have to hire people like http://en.wikipedia.org/wiki/John_Hawkwood at any rate!

  8. @Anon BMS Researcher says:

    Aw c’mon, don’t you think Peter Dolan could give Kindler a run for his money?

  9. Beyoncero says:

    To quote a former Warner-Lambert executive: “Hazy thinking and sloppy implementation.”

  10. NHR_GUY says:

    Pfizer was a mediocre company at best in 90’s until they won the lottery and got their greasy grips on Lipitor. With all the money flowing in, they deluded themselves into thinking that they were hots$$t. When they got Lipitor, they were like a bunch of monkey’s finding a loaded gun; fun to watch but you know someone is going to get hurt. With the increased Lipitor revenue, they deluded themselves into thinking they could turn any crazy project into gold. Very quickly it was apparent that they were incapable of producing drugs internally. The cracks started to show as early as 2002, but things got desperate in 2004 leading to the never ending waves [layoffs] which continue to this day, the constant reorganizations, and the acquisitions. This company is in bad shape. It is now a trapped animal chewing off its limbs (vet med, consumer health, etc.) trying to save itself. R&D is as bad or worse as people on this board know or imagine.

  11. Anonymous says:

    What a fucking travesty. So many people sacrificed at the Pfizer altar while incompetent execs still pulled multi-million dollar severances.
    Former employees should pool their money and hire someone to break Kindler’s and McLeod’s knees. At least put a dent in some of that money they raped and pillaged from Pfizer.

  12. Anon the II says:

    I just finished the article. Over the years in this business, it’s become apparent that it takes pathalogical levels of self-interest and ambition, coupled with an almost total lack of ethics, to rise to the top. There are exceptions. But not enough.
    My sense is that we should either incarcerate them or tax them heavily. Calling them job creaters is an insult.

  13. NJBiologist says:

    @7: Where is Chainsaw Al Dunlap these days, anyway?

  14. Pig Farmer says:

    A fascinating but ultimately sickening insight into the machinations at the top of a Big Pharma company. Confirms what I’ve always suspected about senior management: an awful lot of them are border-line psychopaths.
    And those multi-million dollar severance packages whilst dedicated, highly experienced scientists are being thrown out in their thousands, in the middle of the biggest economic disaster since the 30s? Makes me want to puke.

  15. Hap says:

    I don’t know that management is particularly evil, but anyone in power with access to money and no responsibility is likely to be corrupted. In theory, though, stockholders are supposed to be able to exert control over management and to hinder their worst excesses, both directly and through the boards of directors. However, it appears to me that boards of directors are nabling rather than hindering the worst of short-term management instincts and selling out their shareholders while not being liable, and the large shareholders who have any power seem to want their money now without caring or thinking of how it might affect the company in the long term. Is this anywhere near accurate? If it were, it would explain a lot of this and of the recent lack of success.

  16. RandDChemist says:

    So it’s R&D’s fault, right? The execs are ALWAYS blameless and get their golden parachutes.
    Disgusting. These people have ruined lives. They should be in prison.
    Yet, when someone is a part of the corporatocracy then always seem to get hired.
    That’s not to say that R&D should be given free reign, but people need to be able to do their jobs!
    Hubris.

  17. Cynical1 says:

    Reading that article makes me appreciate all that much more the scene in the movie ‘Dogma’ where Matt Damon’s character, Loki the fallen angel, kills all the board of directors (save one) at their company mtg. revealing after the fact how evil they all were anyway and how he was trying to get back in God’s favor by killing them. I think the Pfizer board must have been the inspiration for that scene.

  18. MoMo says:

    Hap-You don’t think management is evil? Did you get a look at McLeod’s steely-black eyes? Every time I opened up here picture my dogs started howling uncontrollably!
    And what kind of executive expects helicopter rides everyday?
    But the Board should be dissolved for too little-too late. They didn’t do their job until one of them spoke up. But that is the trouble with most pharma boards- they are complacent and sit mute most of the time.
    Boards should be held responsible too! But who watches the Boards?

  19. Annoyed says:

    Interested in them following up and investigating what this top management turmoil did to middle management and decisions made concerning R&D and R&D site closures, and productivity. In the Forbes article the “Father of Lipitor” seems to indicate it had a pretty direct impact on the R&D organization.
    Also – To what degree did the actions of Pfizer play into what the other pharma players did following the leader that has now resulted in the mess they all seem to be in now….
    Had Warner Lambert’s chairman not seeked to grow WL/PD via a merger, prompting Pfizer to covet all the proceeds from Lipitor would the industry have been in better shape today? WL looked for a white knight or merger of equals and tried to fend off PFE.
    Maybe in 20 years or so when all these executives write their memoirs we may come to find out hidden truths.

  20. Anonymous BMS Researcher says:

    on July 28, 2011 7:47 PM somebody followed up on my comment with:
    > Aw c’mon, don’t you think Peter Dolan
    > could give Kindler a run for his money?
    A full expression of what I think of Dolan cannot be expressed in words suitable for a public blog; suffice it so say it is not exactly positive.

  21. Sili says:

    I’m always impressed by the breadth of your knowledge and ability to draw parallels and make references.
    Even to the point of spotting all those Angewandte puns.

  22. @20 Anon BMS Researcher says:

    At least you survived the Dolan Years, unlike many of my former colleagues. I agree with you and everyone else…it’s disgusting how the top execs in any industry get cushy severance packages for doing terrible jobs! Even the most senior LAB scientists get a maximum of 1 year severance (lump sum or monthly installments).

  23. Anonymous says:

    “After the latest wave of layoffs, Pfizer’s flagship Groton, Conn., research site will soon employ 3,400 people, down from a high of 5,000 in the area during the glory days.”
    Will pfizer start hiring a lot of people soon?

  24. petros says:

    And an interesting commentary on major mergers being bad, especially with Pfizer, for R&D from John LaMattina
    http://www.nature.com/nrd/journal/v10/n8/full/nrd3514.html

  25. srp says:

    This really isn’t Borgia-class intrigue. You’d think somebody at a drug company would know about poisons….

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