Pfizer's Torcetrapib Failure: The Risks of New Drug Development

            
 
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Case Details:

Case Code : MKTG172
Case Length : 26 Pages
Period : 2000-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : Pfizer, Inc.
Industry : Pharmaceutical
Countries : USA, Europe

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts

Pfizer's Foray into the Statin Market

In the 1950s, a connection between heart disease and hypercholesterolemia was established. After the discovery of LDL and HDL, researchers linked elevated levels of LDL in the body to increased risk of heart attack, while elevated levels of HDL were found to be protective. Scientists found that an enzyme in the body known as HMG CoA reductase helped in the conversion of a compound HMG CoA into another compound that was a precursor to the development of cholesterol...

Pfizer Gains Market Leadership

In late 1999, WL agreed to be acquired by American Home Products. Pfizer did not want to let go of Lipitor and made an unsolicited bid for WL. In June 2000, Pfizer acquired WL and acquired full rights to Lipitor. The acquisition cost Pfizer US$ 90 billion - and was one of the biggest acquisitions in the history of the global pharmaceutical industry. As Pfizer gained total control of the brand, it devised an even more aggressive marketing strategy for Lipitor. By 2000, it had snatched leadership from Merck in the statin market...

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Torcetrapib - The "Holy Grail of Lipidology"

The Torcetrapib saga began in 1989 when researchers such as Alan Tall (Tall) published papers on a new mutation in some patients suffering from heart disease. It was observed that patients, who had a mutation in the gene for the cholesterol ester transfer protein (CETP), had high levels of HDL and low levels of LDL. In 1992, Roger B Ruggieri (Ruggieri), a scientist at Pfizer, invented a CETP inhibitor, CP-529, 414 (later known as Torcetrapib)...

A Controversial Launch Strategy

In early 2005, Pfizer announced its intention to combine its new drug Torcetrapib, a good cholesterol (HDL cholesterol) booster, with Lipitor. This raised concerns among some cardiologists and consumer groups that it was a ploy of Pfizer to extend the patent life of Lipitor. Critics argued that Torcetrapib should be marketed as a stand-alone drug, so that it could be co-prescribed with Lipitor or any other similar drug...

The Growing Expectations from Torcetrapib

As of mid-2006, Pfizer appeared to be banking on its combination of Lipitor and Torcetrapib to extend its profits for a longer period. Pfizer's dependence on Lipitor had increased over the years and as of 2006, Lipitor accounted for around one-fourth of Pfizer's sales (Refer to Table I for Lipitor's sales as a percentage of Pfizer's revenues). Generally when a drug loses patent protection, generic competition forces a drop in price of upto 80 percent within one year...

Torcetrapib Flatters to Deceive

On December 02, 2006, Pfizer announced that it had halted the development of Torcetrapib, as data from the ILLUMINATE clinical trial found that 82 patients taking a combination of Torcetrapib and Lipitor had died, compared with 51 deaths in the study group where patients were only given Lipitor. The results were statistically significant. In addition to this, patients taking Torcetrapib were found to have an increase in chest pain, congestive heart failure and procedures to clear blocked arteries...

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