Pfizer's decision to close its research and development facility at Sandwich - Science and Technology Committee Contents


Written evidence submitted by Pfizer Inc. (PZ 03)

INTRODUCTION

1.  On 1 February 2011 Pfizer announced its intention to exit its research site at Sandwich in Kent by the end of 2012. This decision is part of a global programme of changes intended to accelerate the implementation of Pfizer's long term research and development (R&D) strategy to create a more focused and sustainable R&D engine for innovation. The proposal to exit the Sandwich site was not a reflection on the Pfizer staff in Sandwich, or the UK operating environment.

2.  The number of Pfizer colleagues currently employed at our Sandwich site is approximately 2,400. Over the next 18-24 months a majority of these positions will be made redundant, subject to normal employee consultation. Pfizer hopes to transfer several hundred positions to other Pfizer sites or to external partners, subject to employee consultation and other legal requirements. During this period, Pfizer's first priority is to support colleagues affected by this decision. Consultation with the Sandwich Colleague Forum is in process.

3.  Given the talented and strong workforce and the excellent facilities at Sandwich, Pfizer's aim is to find partnership opportunities which can utilise the Sandwich site, in an effort to preserve jobs and activity there. In addition to our own activity, we are also working closely with national and local agencies, including the Sandwich Local Economic Taskforce established by the Department of Business, Innovation and Skills.

4.  The UK has always been an important location for Pfizer. Sandwich was our only integrated R&D site located outside of the US, and produced a number of important medicines for the company and for patients. After the proposed exit from the Sandwich site, the UK will remain an important location for Pfizer. We will have R&D sites in Cambridge and Aberdeen, packaging and distribution in Havant, and business operations at Walton Oaks, in Surrey, and Maidenhead. Given the strength of the science base, the UK will also remain an important location for scientific collaborations with the academic sector.

PFIZER'S WORLDWIDE R&D STRATEGY

5.  There is an underlying set of global drivers that led to the acceleration of Pfizer's R&D strategy. The pharmaceutical industry currently faces a challenging global business environment, including factors such as:

  • Increased costs and timelines for new product development to meet rising technical standards.
  • Insufficient number of new medicines from R&D investment.
  • A wave of patent expirations on major drugs and rising competition from generic manufacturers.
  • Increasing pressure from payers, through various cost containment policies arising from fiscal pressures.
  • Increasing evidence demands at regulatory, pricing and reimbursement decision points, including the need to conduct longer, larger clinical trials.
  • The need for active comparator clinical studies rather than placebo controlled studies, and an increasing demand for sub group analyses. These can delay time to market and can increase development costs.

6.  These global drivers have meant that Pfizer has reduced its projected R&D spend for 2012 by $1.5-2 billion.

7.  In order to maintain Pfizer's position as a leading innovative multi-national pharmaceutical company, we are restructuring and refocusing our R&D activities worldwide.

  • We are focusing our efforts on a smaller number of research areas, where we believe will have the greatest impact.
  • We are creating new models to access external science and technology and outsourced capabilities.
  • We will focus the global footprint of our R&D site network to more fully align with key hubs of science and technology.

8.  With these considerations in mind, Pfizer conducted a comprehensive review of our research pipeline and R&D footprint.

RATIONALE FOR THE PROPOSED EXIT OF THE SANDWICH SITE

9.  Pfizer's proposed exit from the Sandwich site is part of a larger programme implementing our R&D strategy, which included an overall reduction in R&D spending, a focusing of the research areas that we work on, and an acceleration of changes in how we conduct R&D. All three factors had a bearing on the proposal for the Sandwich site.

10.  In future Pfizer will focus its resources and efforts on a smaller number of research areas where we believe we can deliver the greatest medical impact and commercial value. These include neuroscience, cardiovascular, oncology, inflammation and immunology, and vaccines. In addition, we will have specialised units for pain and sensory disorders, and biosimilars. This increased focus has meant that we have decided to exit research in allergy and respiratory diseases, internal medicine, and oligonucleotides.

11.  The new focus on research areas was one factor that influenced our decision to exit Sandwich. The Research Units based at Sandwich were dedicated to two research areas we are exiting: allergy and respiratory, and internal medicine. The decision to end our focus on oligonucleotides has also led to the proposed exit from our Dusseldorf site in Germany, subject to works council negotiations, and also the Cambridge South site in Massachusetts, USA.

12.  A further deciding factor has been Pfizer's aim to improve how it conducts research by moving its Research Units to "global innovation hubs" where we can access science, science leaders and partners. That is why Pfizer's pain and sensory research will be located in Cambridge, UK. We see the UK, and Cambridge in particular, as being a place where we want to conduct research in the future. This move will put us in close contact with leading biomedical research institutions and provide access to a deep and energised talent base.

13.  The other key factor that led to the decision to exit the Sandwich site is Pfizer's decision to shift a significant portion of its internal scientific support work to strategic partners to address our high infrastructure costs, and lower our fixed asset costs. Many staff at Sandwich work in enabling research functions, such as pharmaceutical sciences.

14.  The business drivers detailed above meant that there was no specific action that the UK Government could have taken to change the proposal to exit the Sandwich site. The changes being implemented at Pfizer are reflective of a trend among multi-national pharmaceutical companies, as they react to cost containment measures by Governments around the world seeking to reduce expenditure on medicines.

R&D OPPORTUNITIES IN THE FUTURE

15.  Pfizer looks forward to opportunities to work with the UK biomedical community in the future:

  • The move to externalise a greater percentage of R&D functions provides new opportunities for Contract Research Organisations (CROs) in the UK.
  • Pfizer's Pain and Sensory Disorder Research Unit at Cambridge will build upon existing collaborative opportunities with UK universities and other institutions.
  • Pfizer is examining options to establish novel external collaborations, such as the "Centres for Therapeutic Innovation", which are partnerships with leading academic health centres.
  • Pfizer will focus its late stage portfolio on high-priority disease areas, to include a mix of owned and partnered assets. We are also exploring partnerships in disease areas and assets with higher scientific and/or commercial risk. This will mean that Pfizer will be looking at business development opportunities with biotech and other pharmaceutical companies in the UK and other countries.
  • There is the possibility that the decision for Pfizer to exit certain research activities in the UK will mean that there could be out-licensing of Pfizer assets, which could lead to new company start ups within the UK.

16.  Pfizer's efforts to mitigate the impact of the proposal to exit the R&D site will be to work with the government, the UK scientific community and other key stakeholders to see how Sandwich and the UK can be part of the evolving biopharmaceutical R&D model.

CONCLUSION

17.  The proposal to exit Sandwich was part of a Global refocusing of Pfizer's research efforts, as part of a strategy that has been influenced by challenges faced across the industry. The strong drivers to change meant that there was no action that the UK Government could have taken to change the proposal to exit the Sandwich site.

18.  Pfizer is working hard to explore external partnership opportunities at the Sandwich site in an effort to preserve jobs and activity on the site. We welcome the Government's Sandwich Economic Taskforce to explore future options for the site.

19.  It is important to note that the UK government has undertaken policy initiatives over the last few years to recognize and reward innovation, and that these have been welcomed by the pharmaceutical sector, and remain important as we change our business model for the delivery of new medicines

20.  Pfizer will continue to work closely with Government and other key stakeholders to help enable a favourable environment for R&D investment in UK that will be responsive to the changing pharmaceutical industry R&D model.

Pfizer Inc.

February 2011


 
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Prepared 19 May 2011