Written evidence submitted by Pfizer Inc.
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.
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
- 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
8. With these considerations in mind, Pfizer
conducted a comprehensive review of our research pipeline and
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,
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.
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
- 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
- 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
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
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.