Planning and strategy go together, and they flow from a company’s mission and vision. Decisions made in the pursuit of corporate strategy are challenging because they ultimately involve choices about how to spend valuable resources. U.S. pharmaceutical giant Pfizer is a good illustration.

Pfizer decided in January 2018 to no longer pursue new research and development (R&D) in treatments for Alzheimer’s disease, resulting in the loss of 300 jobs.⁸⁵ Worse yet, the approximately 5.5 million U.S.

adults with this neurological disease no longer have one of the biggest pharmaceutical companies in their corner.⁸⁶ Pfizer made this challenging decision because of either low profitability or limited capacity,

even though some of its Alzheimer’s-related research showed potential.⁸⁷

With respect to profitability, Alzheimer’s research has proven to be costlier than most other R&D pursuits.

A neuroscientist at Edinburgh University told BBC Radio that “More than 99% of trials for Alzheimer’s drugs have failed in the past 15 years.”⁸⁸ Investors thus are pressuring pharmaceutical companies to spend less on this research when they can pursue more profitable projects, such as treatments for anxiety disorders and erectile dysfunction.

Capacity becomes an issue in pharmaceutical research and development because it’s difficult to run multiple large-scale R&D programs at the same time.

This has led pharmaceutical companies to focus only on specific drugs. A former head of research and development at Pfizer told the Financial Times, “You can’t run several programmes of that size, even with a budget like Pfizer’s. . . . How many times can these companies take another shot when other parts of science like gene therapy are exploding, and when there’s a desperate need for new drugs to replace opioids?

There are many more areas where you can see the goal lines.”⁸⁹ Pfizer’s management team apparently agrees with this conclusion. The organization said in a statement that not pursuing Alzheimer’s research “was an exercise to reallocate [spending] across our portfolio,

to focus on those areas where our pipeline, and our scientific expertise, is strongest.”⁹⁰

Though Pfizer may be changing its strategy and its resource allocations, the company has kept its mission statement the same: “To be the premier, innovative biopharmaceutical company.” Its values include “customer focus” and “integrity.”⁹¹ However, its latest decision is seen by some as contradictory to its mission and values. Alzheimer’s Research UK says that companies should be encouraged to invest in research into neuroscience. For its part, the Alzheimer’s Society called Pfizer’s decision “disappointing” and a

“heavy blow” to those living with dementia.⁹²

Other big drug makers are not letting profit and limited capacity get in their way. A top scientist at Eli Lilly, one of Pfizer’s competitors, told the Financial Times, “Taking care of Alzheimer’s patients is a huge economic cost to society and now is not the time to give up.” Eli Lilly’s most advanced Alzheimer’s drug failed in a large trial in 2016, but the company has vowed to continue Alzheimer’s treatment R&D.⁹³ Another U.S. competitor, AstraZeneca, also remains committed to fighting the disease.

Questions
What would you do if you were Pfizer’s CEO?
1. Move on to other projects. Pfizer has an obligation to its shareholders not to throw money at projects that prove to be unsuccessful.
2. Continue funding Alzheimer’s R&D. As a global leader in the pharmaceutical industry, Pfizer has an obligation to society to find treatments for diseases affecting millions of people. This would also be in line with its mission statement and values.
3. Contribute to agencies such as the National Institutes of Health so they can continue their studies of Alzheimer’s.
4. Suggest other options.