Pfizer will cut 10,000 positions, or 10 percent of its total worldwide workforce, as part of a sweeping, though anticipated, restructuring plan aimed at enhancing the pharma giant's agility while maintaining scale. The company announced the reorganization during an analyst meeting in New York City Jan. 22.

"In the past, Pfizer was a large, bureaucratic company that was often slow to take risks and make decisions," CEO Jeffrey Kindler said. "In the future, we must be a streamlined company that reduces bureaucracy, that listens to its employees and its customers, that moves quickly, that empowers its people and holds them accountable."

The workforce eliminations include the reduction of 2,200 U.S. sales representatives, or 20 percent of the force, already announced in November. At the time, the company said it would maintain strong support of its in-line products like Lipitor , Celebrex and Geodon , as well as new products like Lyrica , Exubera , Chantix and Sutent (¹ Also see "Pfizer Slashes Sales Force 20%" - Pink Sheet, 28 November, 2006.).

In addition to the U.S. field force cuts, Pfizer plans to slash its European field force by 20 percent and consolidate its research and manufacturing organizations.

Pfizer said it will close five research sites, including three Michigan operations, one of which was a former Esperion site obtained through an acquisition in 2004. In addition, the firm proposes shuttering two international sites in Nagoya, Japan and Amboise, France. The closings are aimed at driving more drugs through the pipeline without increasing R&D funding.

During its R&D briefing Nov. 30, Pfizer announced plans to triple its Phase III portfolio from 2006-2009 and introduce four new products a year beginning in 2011 (² Also see "Pfizer Plans Four New Products A Year Starting In 2011" - Pink Sheet, 30 November, 2006.).

The consolidation is intended to enhance the flexibility of Pfizer's R&D engine, which following the acquisition of Pharmacia in 2003, had expanded to include operations in 25 sites in 10 different countries, Pfizer Global R&D President John LaMattina said.

Under the new organization, research projects will be redeployed to centers that will now focus on key therapeutic areas. Major research centers will include Groton, Conn., with a focus on antibacterials, cardiovascular/metabolic and neuroscience; La Jolla, Calif., which will house oncology and ophthalmology research; St. Louis for inflammation and biotherapeutics; and Sandwich, U.K, which will be the site for allergy/respiratory, antivirals, genitourinary/sexual health and pain.

"We are convinced this structure will enhance our capabilities in speed, flexibility and optimal utilization of resources," LaMattina said. "Each will be characterized by a single leader with more responsibility, authority and accountability and more control over resource allocation."

The centers "will be run with the attributes of a small company, but they'll also have the advantage of being able to tap into the capabilities and resources that only a company of Pfizer's size can provide," he added.

As part of the research reorganization, LaMattina said Pfizer will exit two research areas, gastroenterology and dermatology.

Pfizer will also consolidate its worldwide manufacturing operations with the closure of manufacturing sites in Brooklyn, N.Y. and Omaha, Neb. and the sale of a third site in Feucht, Germany.

The consolidation, along with increased outsourcing and procurement savings are expected to result in a net reduction in pre-tax expenses of between $1.5 billion and $2 billion by the end of 2008 after certain savings are reallocated to R&D.

In addition, Pfizer Worldwide Pharmaceutical Operations President Ian Read said the company's commercial organization in the U.S. will be realigned into a more nimble structure that will enhance accountability among leaders through the establishment of five smaller business units instead of one large organization.

"The U.S. pharmaceutical operation at $24.5 billion and 54 percent of pharma worldwide revenue is simply too big and too complex," Read said.

The separate units will include four separately managed commercial units in cardiovascular/metabolic, urology/respiratory, central nervous system/pain and specialty that will each be responsible for their own profit and loss, as well as a fifth unit responsible for customer support to specifically address patient access and managed care.

"These units will be nimble, operate as separate performance units with dedicated sales, marketing and medical teams and they have focused goals and very clear accountabilities," the exec said. "This is what we need to drive results."

The announcements come after Pfizer terminated development of a key investigational drug, the potential blockbuster cholesterol therapy torcetrapib, which was in Phase III development (³ Also see "Pfizer Terminates Torcetrapib Program" - Pink Sheet, 3 December, 2006.).

- Jessica Merrill (j.merrill@elsevier.com)

Pfizer Looks To Make Its Big Pharma Engine More Agile By Cutting 10,000

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