What is it that you do again?

Recently Pfizer announced that is shedding European jobs in R&D in order to expand its sales/marketing operations in China.  Leaving aside the basic business motivations for this, the existential implications are worth exploring: -

Remind me again, what does Pfizer do?

For well over a hundred years the raison d'etre of every pharma company has been the scientific development of medicines that assist in mankind's fight against disease.  As obnoxiously as the pharmaceutical industry has behaved over the last few decades (although certainly less so than, say, finance), it has been broadly tolerated because the fruits of its labour have to led to us all living longer, more pleasant lives.

Pfizer's move is a hard-headed reaction to the bleak news that the salad days of the 1990's and 2000's are past and unlikely to return.  But is it the right reaction?  Sure, the industry believes itself to be in trouble: at the front end, ever-deepening legal exposure and a pickier FDA have massively increased the cost of getting a drug to market whereas the enthusiastic championing of generic manufacturers by insurers and governments has severely curtailed ROI at a minute past midnight on the day of patent expiry.

All of which may mean that the profitability of a sector which has historically outperformed the wider economy will come back to the pack somewhat.  Individual companies will perform better or worse but pharma as an overall sector won't be so profitable nor its stocks be seen as such a safe bet.  Yet this unpleasant fact isn't reason enough to toss all the toys out of your pram.

Pfizer, once rid of all but the safest prospects in its pipeline, will join the evermore frantic hunt for the next small, sexy biotech with decent clinical trial results, pull out its chequebook and pick up ownership of a product that's ready to launch.  This is not an entirely negative outcome because Pfizer does global product launches better than most, many people will gain access to important drugs.

The long-term consequence is that Pfizer may be seen to have opted out of the (noble) pursuit of science in favour of the (unseemly) business of marketing.  And what is marketing if not the shaping of how you are seen by the customer: -

You used to be one of the good guys, beavering away in lab in the hope of one day cracking the code, using science to help relieve the suffering of millions.  Now you're just a big company with a lot of cash to spend.

You don't innovate any more

You're Dell not Apple.  You're Disney not Pixar.  You're GM not VW.

Which is fine for now but the only genuine advantage the West maintains over the developing world is a superior genius for innovation.  Throw that away and what are you left with?