Once again, its the biggest Big Pharma of all that sets the pace. Pfizer’s latest financial report to shareholders provides a rich example of the high price of scaling down. To help digest the Wyeth acquisition alone, the company has swallowed more than $5.6 billion in employee termination charges over the past three years. Another $1.1 billion is due to be paid this year and next to account for layoffs associated with the closure of Pfizer’s Sandwich UK  research facility and the planned 25 reduction in overall spending on R&D.

All told, Pfizer’s “let’s get lean” diet has led to the departure of more than 36,000 employees since a formal program of rolling staff cuts called Adapting to Scale was launched in 2005 — with another 13,000 still to go in order to meet the Wyeth integration target of a 15 per cent reduction in the combined company workforce.  The total payout bill estimated by the forensic functionaries who fill all those holes in the Albert Hall? At least $9 billion, and with associated charges as much as $12 billion.

That’s no small change even for a company as large as Pfizer, which explains why the terms of separation have become progressively less generous as the number of affected employees increase.  But give some credit where its due: our own informal review of company exit packages reveals that Pfizer still sets the industry standard in terms of generosity.

Additionally, the company did tiny modifications on each letter, dropping the serif from the “P,” making the “F” less bulbous, and adding slant to the “E” in the direction of the oval.

Pfizer didn’t get back to me by press time to go over details as to why it changed its iconic logo, or the cost of revamping the design. However, Underconsideration.com, a really cool design blog, broke down history of the logo, and scored a few comments from the team behind the logo at Siegel+Gale.

The “Pfizer oval” was introduced in 1991. Over time, a great deal of equity was built into that logo, and it is widely recognized around the world. But today, Pfizer is a different company. It’s changed through global growth, numerous acquisitions, entry into new therapeutic areas, and development of life-changing medicines. The new logo keeps much of that existing equity, but with the brightened color, approachable type face, and tilted oval it signals positive change and forward momentum and asks people to take a fresh look at Pfizer because it is not the same company it was in 1991.

In addition to an updated logo, the new visual system also helps to signify this shift. The \ dotted display type face, illustration style, and bright multi-color palette work together to communicate the company’s  vision of advancing better health for all people around the world.

While the new logo probably won’t cause a stir like Tropicana’s recent rebranding or the new Pepsi logo, it is interesting to see what design fans think of the new treatment. Impressive, tired, let us know in the comment area below.

Also, if you are a designer interested in revamping Pfizer’s logo, feel free to drop us a line at gkoroneos@advanstar.com. We’ll publish the best redesigns on the back page of an upcoming issue of Pharmaceutical Executive.

“AstraZeneca is making changes to our sales force, which will be managed first by looking at vacancies and offering field sales employees the opportunity to self-identify whether they are interested in leaving the company,” a company spokesperson stated in an email. “We will know the full scope of the changes in the coming weeks.”

The strategy is similar to the move made earlier this year by US automakers to reduce their work force. However, it seems that AZ is looking to thin its ranks to compensate for loss of patent exclusivity rather than find more affordable help. The question is: What happens if the buyout quota isn’t met? Currently, only AZ executives know—and they aren’t talking. 

Meanwhile, local press in Indiana is reporting that Bristol-Myers Squibb filed paperwork stating it will close its Evansville, IL, plant and lay off 113 employees at that location and one other facility. The Courier Press of Evansville wrote that job losses would include 57 production operators in Evansville and 14 team leaders in both Evansville and Mount Vernon.

Pfizer is also being tight lipped about pending layoffs, but did reveal changes it’s making to existing facilities. According to a letter sent to employees, the company intends to keep its New York headquarters intact, while its Madison location will become the leadership center for the diversified businesses, animal health, consumer healthcare, and a few other units. Pfizer plans to close its Bridgewater, NJ, facility and Wyeth’s Great Valley, PA, campus by mid-2010. The Morris Plains, NJ, facility is still under review, and Wyeth’s Collegeville, PA, location will serve as the leadership center for the new specialty care business unit.

“It’s important for all colleagues to note that the location of a leadership center for a particular business unit does not require all colleagues working in that business to be located at the same facility,” Pfizer CFO Frank D’Amelio stated in the letter. “Rather, over the course of the next several weeks, each business will be determining the best location for each colleague, and managers will soon begin having individual conversations with colleagues impacted by these decisions.”

Score another win for Genentech and its cancer treatment Avastin (bevacizumab). On Monday, the biotech giant, now owned entirely by Roche, announced that FDA has approved the drug for kidney cancer.

Avastin blocks new blood vessels from forming and supplying tumors with the nutrients they need to grow and spread to other parts of the body.

Since it was first approved in 2004, Genentech has expanded Avastin’s uses to colorectal cancer, breast cancer, and non-small cell lung cancer. According to Roche, the treatment is being tested for treatment in more than 30 tumor types.

“We hope that researchers some day find a cure for kidney cancer,” stated William P. Bro, chief executive of the Kidney Cancer Association, in a release.  “Until then, each new medicine, like Avastin, offers patients an opportunity to find the treatment best suited for them.”

FDA approved this indication of Avastin after reviewing data from a study that documented a 67 percent increase in progression-free survival of patients receiving Avastin for previously untreated metastatic renal cell carcinoma. Additionally, 30 percent of patients taking Avastin with interferon alpha saw a drop in tumor size, compared to 12 percent in patients not taking Avastin.

According to Roche, the study was conceived to show an increase in overall survival in patients with this type of cancer. The company didn’t succeed in that regard, stating that there was no improvement in overall survival. However, the endpoints that were reached were more than enough to satisfy FDA’s approval process.

Avastin now enters a very crowded kidney cancer market with competition from Pfizer, Wyeth, and Bayer. However, CNN reports that many physicians have been using the drug off-label for kidney cancer, which could boost market penetration.

Pfizer Broadens Beyond Pills with $68 Billion Wyeth Buy: Pfizer has agreed to acquire Wyeth in a $68 billion deal that’s the largest merger in the pharmaceutical industry in nearly a decade. In announcing the deal, the companies made clear that the Pfizer has in mind to cut its reliance on traditional pills. (WSJ)

Cheering a Pfizer-Wyeth Deal: With Wyeth, the combined company might earn $2.48 in 2012, still down from Pfizer’s prior year, but only by 11 percent and just a touch below what the two companies might have earned if they’d merged at the start of 2009, $2.46 per share. (Barrons)

A Pfizer-Wyeth Merger Isn’t the Cure-All: Acquiring Wyeth might boost Pfizer’s fortunes in the short term, but it won’t solve the long-term problems that are roiling the major pharmaceutical makers. As many observers have noted, Pfizer and the rest of the drug industry suffer from a lack of promising new products to replace older ones going off patent. What is less widely understood is that Pfizer also will face an increasingly constrained marketing environment, even if it succeeds in bulking up with Wyeth. (Business Week)

Pfizer-Wyeth Deal Could Stir Restive Rivals: With its lucrative vaccine business and biotechnology drugs not facing imminent patent expirations, Wyeth has become a target for companies bracing for generic competition for their most important drugs while struggling with development pipelines that have recently yielded few major new medicines. (Reuters UK)

Pfizer To Swallow Wyeth’s Good Medicine: The acquisition will give Pfizer a much larger presence in areas where it has been viewed as weaker than the competition, namely biotech drugs and vaccines. Wyeth, which makes the top-selling vaccine for children, Prevnar, would help fill this void. Wyeth also co-markets Amgen’s Enbrel biotech drug for rheumatoid arthritis. That is exactly what Pfizer needs as it looks to fill the void that will be left by Lipitor when it loses patent proteciton in 2010. (Forbes)

After Pfizer-Wyeth, Who’s Next?: Those who may sit on the mega-deal sideline, however, include giants GlaxoSmithKlineand Bayer, both of whom have indicated that they haven’t seen any big targets that tempt them, focusing instead on smaller purchases. (NYT)

Pfizer to Buy Wyeth in $68 Billion Deal: It would also be the first big merger backed by Wall Street in months. While credit has been notoriously tight of late, five banks have agreed to lend Pfizer $22.5 billion to pay for the deal. Pfizer, which has roughly $26 billion in cash, would finance the deal through the loans, some of its cash and stock. (NYT)

Behind Pfizer’s Deal to Buy Wyeth: Pfizer and Wyeth are facing a problem, which is systemic and not isolated to their industry. Each expects revenue to fall in the near future as some of their largest-selling drugs lose patent protection. Putting the two companies together will allow them to fire tens of thousand of people and cut other overlapping costs. The firms are nearly identical, which makes expense savings certain. (TIME)

For the first time, the highest court in the land is weighing in on whether federal approval of a drug preempts tort claims against a drugmaker, such as an injured consumer might bring in a state court. A decision for Wyeth upholding preemption could help end the proliferation of product liability and class-action lawsuits at the state level—as seen in the massive Vioxx litigation.

The details of the case verge on melodrama. A Vermont musician, Diana Levine, lost part of her right arm to gangrene after Wyeth’s anti-nausea drug Phenergan (mistakenly) came into contact with arterial blood.

Although the drug’s label carries a warning about this bizarre potential side effect, which can result from an improper emergency “IV push,” the plaintiff has argued that the drugmaker should have either made the warning more prominent or not sought approval for this specific technique. A Vermont court agreed with the plaintiff, ordering Wyeth to pay Levine $6 million in damages. Wyeth appealed.

Following the arguments, Pharm Exec spoke to James Huston, a San Diego–based litigator at Morrison & Foerster, who has scored some big victories defending major manufacturers of drugs and medical devices. (He is also a bestselling crime-thriller novelist.)

We asked Huston for his take on how the arguments went, how the judges might decide, and other aspects of the case.

What can you tell us about the judges’ demeanor during questioning?
I talked to someone who was there, and I have read the briefs in the case as well as the questions that the judges asked. The lawyers on both sides seemed to be on their heels a lot of the time, and Wyeth was getting the more aggressive questioning from the judges, even some of the so-called “pro-business” judges.

They were asking fundamental questions—Judge Alito asked, “How in the world could the FDA approve an IV push for this [anti-nausea] drug when there is a risk of developing gangrene?”
Based on all the questioning, it seems clear that the court is very troubled by this case. And they should be. It’s not a good test case for preemption.

Why not?
Because it’s really a case of medical malpractice. The woman who got the IV push was a victim of medical error, not a regulatory or liability error. Whoever injected the IV push committed medical malpractice.

The plaintiff is arguing that FDA shouldn’t have allowed this type of drug administration at all. And I tend to agree with her. And that’s the problem with this case: We’re all left wondering why neither Wyeth nor FDA can tell us about the potential medical event that is so critical as to make the severe risk associated with this IV push worth it—rather than experiencing 15 minutes of nausea waiting for the regular [and safe] IV drip to take effect.

Wyeth didn’t give a single example in their brief of why this was medically necessary.

What’s the pro-preemption answer to Alito’s question?
The answer is, how FDA came to the conclusion is not up to us or a jury to second guess. The point is that it went to a medical committee, and FDA determined that the warning that this drug carried about this particular risk was adequate.

What does a jury know that medical experts do not know, and that enables them to and say, “No, the warning is not adequate”? And then another jury in another state says, “Yes, it is.” And then another jury says, “No, it isn’t.” And we skip across the country making some lawyers very rich. It’s a crazy patchwork of decisions and an awful waste of money.

Does that mean that under preemption, people who are injured by an FDA-approved drug will no longer be able to sue the drugmaker?
The short answer is yes. A decision supporting preemption would probably cover the vast majority of liability issues related to the design or warning label of a drug. You could probably still sue for manufacturing problems.

Could you sue FDA?
That’s exactly what Judge Scalia said today during the arguments: “If you have a problem with FDA’s decision, sue ’em.” But that’s a crazy idea. You’d have to bring a claim for negligence under the Federal Torts Claims Act, and it would almost certainly be struck down.

If it’s a case of medical malpractice, why is the drugmaker held responsible?
Because of limitations and restrictions in the state medical malpractice rules. If Ms. Levine brought her case in California against her medical professional or the clinic, the amount of money she could recover is very limited. She would never get the $6 million a jury awarded her.

The drug company gets hit for $6 million for a risk that they knew about, identified, and warned against. That’s a problem—and addressing that problem would make a very interesting footnote. We’ll see if it makes it into the opinion. None of the briefs filed with the case mentioned it.

How do you think the Supreme Court will decide the case?
I think the decision, when it comes in three months, will be a very narrow affirmation of the lower court’s result and yet confirming that preemption does apply sometimes. The court will probably say that preemption only applies when we have actual knowledge that FDA considered the specific risk/benefit at issue.

The problem is that you don’t get that proof because FDA never reveals how it comes to its decisions. So I think the decision will ultimately leave us with a big conundrum.

Basically, the judges will decide narrowly both for and against. They may give Ms. Levine her judgment and say, “In this case preemption does not apply because Wyeth should have proposed a change in the warning on the label. But don’t get us wrong, we’re not saying preemption doesn’t apply in general.”

Would that set some kind of precedent for preemption?
It would be a very narrow extension of implied preemption. But even if the court recognized a broad preemption application, I think that Senator Waxman and others in Congress will, on the day after the decision, issue an amended Food and Drug Act saying that nothing in this act is intended to preempt any tort claim in any state anywhere. And given the Democratic majority, that law is likely to be enacted.

But we’re seeing the courts pushing on preemption in a lot of different arenas right now.

For example, in the Ninth Circuit here in California, there was a recent case where the court said, “We’ve got the Federal Aviation Association regulating airports and aircraft and aircraft design already, so how can you—a jury—come in and tell us that the way an international airplane is designed is more likely to cause deep vein thrombosis injuries? The Ninth Circuit said you can’t—that the entire field of aviation is preempted by the FAA.

Is there a potential solution beyond the issue of preemption?
Congress could probably come up with a better solution. They passed a law for medical devices saying that state torts laws do not work, but they didn’t extend it to drugs. Still, there has never been a federal tort standard on anything, and Congress isn’t about to start generating one.

Promotions and hires for September 26, 2008:

• Merck named Barry J. Goldstein, M.D., vice president of clinical development for diabetes and obesity

• Sanofi-Aventis announced that Chris Viehbacher will succeed current CEO Gerard Le Fur in December

• GlaxoSmithKline named Ellen Strahlman chief medical officer

• Questcor Pharmaceuticals appointed Gary Sawka CFO

• Encorium appointed David Ginsberg president and CEO

• Wyeth named Daniel J. McIntyre vice president, corporate communications

• Genesis Pharmaceuticals appointed John Yang Wang to its board of directors

• Zosano Pharma appointed Gail Schulze chair and CEO

• Lilly named John Lechleiter its board of directors chairman

• Merz Pharmaceuticals named Jack Britts president and CEO

• Ferring Pharmaceuticals appointed Paul Korner, M.D., vice president, medical affairs

• Zafgen appointed Thomas Hughes the company’s first CEO

Click here to view a slideshow from Prix Galien 2008

The 2008 Prix Galien USA is in the books, and Pharm Exec was in attendance at New York’s Museum of Natural History to take in all the festivities. Pfizer, Merck, Alexion, Wyeth, and Celgene were all recognized for their work in advancing science in both the biotech and pharma industries. Charlie Rose played master of ceremonies to a packed house featuring a who’s who of the science elite and a handful of Nobel Laureates.

The Prix Galien USA 2008 winners are:
Best Pharmaceutical Agent (Small Molecule)

• Selzentry (Pfizer)
• Isentress (Merck)

Best Biotechnology Agent

• Soliris (Alexion Pharmaceuticals)
• INFUSE (Wyeth)

Special Therapeutic Development

• The Celgene Corporation for Revlimid

The evening ended with a moving speech by author and Nobel Prize winner Elie Wiesel and a presentation of the Pro Bono Humanum award to Population Council scientist Sheldon Segal. For more on the Prix Galien 2008, keep a look out for the October issue of Pharmaceutical Executive Magazine.