Exubera Is Just Too Much for Pfizer Any More
I read in the WSJ today about Jeffrey Kindler, the CEO of Pfizer. They’ve just written off $2.8 billion for a failed spray diabetes drug called Exubera. The reasons behind why it could never make enough money to pay for itself is representative of the way Big Pharma works in these times.
The drug costs .30 to make. That’s extraordinarily high, for example blockbuster Lipitor costs just .08 per pill. The story reveals that the insulin is made in Germany, shipped to California to be sprayed and turned into a powder, the it’s packaged into foil wrappers in Indiana the inserted into a device made in Arizona. Pfizer paid a small company called Nektar a licensing fee of about $60 million to make and spray on the powder. Combine this with huge costs to send reps out to teach doctors how to have patients learn to administer the drug and the whole thing would never earn back the hundreds of millions in costs.
Kindler’s background is in the fast food business, ‘where decisions are made in second,’ said an analyst. Contrast this with the pharma biz where patients are affected for decades by decisions made about drugs.