Pfizer (NYSE:PFE) Blows it on Japan Smoking Tax

Pfizer (NYSE:PFE) was caught offguard when the government of Japan imposed a tax increase on cigarettes, which their drug Chantix, developed to help smokers trying to quit, could have generated significant revenue.

When those wanting to quit went to their doctors for prescriptions of Chantix (sold as Champix in Japan), the company found themselves unprepared for the demand, even though they were aware of the probability way before the tax was implemented in October 2010.

Pfizer almost immediately wasn't able to meet the huge demand, and in under two weeks of the tax increase they had to stop sales of Chantix to new patients because they had no more to sell.

The problem for Pfizer was an effective ad campaign which created the strong demand but was accompanied with an underestimation of how big the demand would be.

They've lost millions in sales as a result, and still are having trouble meeting demand months later.

Pfizer was trading at $17.69, gaining $0.17, or 1.03 percent, as of 2:35 PM EST.