• by Karl Greenberg , June 8, 2010

You know the healthcare system is screwed up when the head of Pfizer uses a prison analogy to describe the Kafka-esque alienation of going into the hospital for a minor procedure. Speaking at the Innovation Forum in New York on Tuesday, chairman/CEO Jeff Kindler said his experience evinces many of things that have kept the business of healthcare well behind other consumer markets in sophistication.

"The very idea of being a patient is anathema," said Kindler. "To people of my generation -- the 'me' generation -- who like to be in control, the experience begins with loss of control. First the paperwork -- three or four times paperwork has to filled out and given to a succession of strangers. Then they take all of your belongings, they tell you to take your clothes off, and make you put on a gown that leaves you nearly naked, put in you in very small room, bring you inedible food according to a schedule they determine.

"And if you try to sleep, they leave lights on, and do everything they can to make sure you can't. At the end, if you are lucky, they deign to discharge you. Those of us who are boomers, entering a period where we will be drawing the biggest healthcare expenditure, will not put up with this. It's a system so far behind every other industry when it comes to customer control and choice that the paradigm has to change, and will change. And I include my industry among the guilty parties."

Kindler said as part of an industry filled with players whose business involves asserting control over peoples' lives, "pharma companies are no different. We have to give control over information back to the consumer, as we do with the ability to buy a car or a glass of wine." The industry also needs to figure out how to let people have their privacy back, and own the data they relinquish. He says Pfizer, which has to conduct clinical trials at great scale, has partnered with a Web-based company, Private Access, that lets people who are reticent to participate in trials because they fear loss of privacy participate without losing ownership of personal data. Kindler, who has worked to diversify Pfizer's product portfolio in part by a big and risky acquisition last year of Wyeth for some $68 billion, said cultivating innovation is a bifurcated challenge: fostering the kind of entrepreneurial spirit you get in small shops, whether they make pharmaceuticals or cars, and using the company's size to give that kind of spirit some real horsepower in global markets when it comes to things like clinical trials and manufacturing. "We have adopted a model we call 'spirit of small and power of scale,'" he said, "because very large complex companies can fall into a bureaucratic culture that hurts innovation by stifling ideas and risk-taking. At the same time, I happen to be of the view that there are types of innovation that require scale and size. We have to find the right balance between those two, and it is very difficult." Kindler, who is head of PHRMA, the drug-industry group, said that on the research side the company has an organization comprising small groups of entrepreneurial scientific-research organizations each headed by a science officer and focused on a specific area. "But they require scale and global vision and resources. So we need to create a reward system that encourages risk-taking while taking advantage of scale and resources." Risk-taking in pharmaceutical product development is par for the course since only one out of 10,000 new compounds actually make through the years-long, billion-dollar gauntlet of development and clinical trials to shelves or prescription pads. "We know most investments we make will fail," he said. A potential recent success is a compound in the oncology sector developed to treat lung cancer contracted by young non-smokers who have a genetic predisposition.