Medicine Man

When Pfizer's board chose a new CEO last summer, it passed over two 30-year Pfizer veterans to pick vice chairman and general counsel Jeff Kindler, who joined the company in 2002 after stints at General Electric and McDonald's. In the latest in his series of interviews as part of the NEWSWEEK-Kaplan M.B.A. program, NEWSWEEK Chairman and Editor-in-Chief Richard M. Smith spoke with Kindler about reinvigorating Pfizer.

SMITH: What's surprised you most about being a CEO? KINDLER: The job is much more complicated and broad than I even imagined. The range of stakeholders in an enterprise like this is just extraordinary, whether it's investors, customers, employees, government officials, patients or the public. And within each of those constituencies, there are multiple additional constituencies you have to think about. What's surprised me is the extent to which I need to spend time with, and understand, the needs of and interests of all these different constituencies.

Is it hard for someone who's not a physician or a scientist to run the biggest pharmaceutical company on the planet? It certainly presents challenges. I like to think my training and my background have taught me a couple of things that are useful in any job of this nature. One is to ensure that you have really talented and knowledgeable people running the different aspects of the business, including the science side of things. And the second is to ask intelligent questions, pursue ideas and encourage people to do their best.

You've announced plans to cut 10,000 jobs. How do you convince the remaining employees that Pfizer is a good place to be?
It is the single most challenging and important thing that I focus on and worry about. It is very, very difficult to terminate people's jobs and to ask them to leave the company, which in many cases they've served for years and years. The only good thing I can say is that I have discovered that most people in this company—including some of the people who are leaving—recognize that we're doing the things we need to do. I hear from employees who say a lot of the changes that we're making, as painful as they are, are overdue.

How much is your business, like Hollywood, a hit-driven business, built on blockbuster drugs like Viagra and Lipitor? There's no question that's true. Another analogy you could draw is oil wildcatting, where you drill a hole in the ground and nine out of 10 times it comes up dry. You hope the 10th time is a gusher that pays for the other nine. The pharmaceutical business has been highly dependent on blockbuster products and probably will be for the foreseeable future. On the other hand, I think that as medicine evolves, personalized medicine becomes a greater opportunity and we're going to see medicines focused on populations that are smaller, but for whom we can be much more confident that the drug will be efficacious.

Has the industry done a good job of justifying the price of prescription medicines? No, the polling is very clear that the public doesn't accept that proposition. The number of misconceptions about our industry is extraordinary. I've read surveys that something like 70 percent of the American public thinks drugs are actually discovered and developed by the government, or by universities, when in fact 90 percent are discovered by the pharmaceutical industry. So we need to do a better job of communicating. But we also have to recognize that there is a fundamental societal issue here—the affordability of medicine, both of individuals to afford medicine and of society to pay for its health-care system —that we in the pharmaceutical industry have to be a part of solving.