The Largest Pharmaceutical Company - Term Paper Example

Competitive Intelligence Report on Pfizer Inc. Contents Executive summary 2. Introduction 3. Data Collection 4. Findings 5. Strategic implications 6. Appendix Executive Summary - The report discusses the major strategic plans of Pfizer by mergers and acquisitions, comparatively more spending on R&D, flexible product line along with high quality and increased market coverage and penetration for increased revenues and a level of monopoly on the markets where it operates, which are Pharmaceuticals, Consumer Healthcare, Global R&D and Animal Healthcare (www.Pfizer.com, 2008). It is further observed that the Pharmaceutical industry generates the maximum revenue for Pfizer and although the Animal Healthcare is a new and emerging market, its profits are on the rise due to its monopoly owing to its entry into this market segment before any. Introduction - Pfizer Inc. is one of the largest Pharmaceutical companies in the world with a huge range of products which are determinant in its success in controlling a major stake of the pharmaceutical industry. It has state-of-the-art research facilities across the world and does spend considerably in this field in pharmaceuticals. These facilities are constantly discovering and developing new quality products for the industry and are spread across over 150 countries and are striving to discover new market needs specific to each area or globally. Pfizer has four major divisions of businesses and they are the pharmaceutical sector, consumer healthcare, global R&D and the animal health sector and have within a short span been successful in creating a benchmark in these different groups and industries. In the pharmaceuticals industry, Pfizer's medicines are extensively used to treat cardiovascular or lipid lowering, infectious diseases, central nervous system disorders, arthritis, erectile dysfunction, allergies, diabetes, and women's health. In consumer healthcare sector, the company has leveraged its R&D advantage and has successfully created a niche for itself in over-the-counter medicines in the market. It realized the trend in the over-the-counter preferences of the consumers and developed the same and aggressively marketed the various products under different brands and is used for treating illnesses ranging from upper respiratory tract sicknesses to eye care. Apart from these over-the-counter products, Pfizer also is a leader in providing high quality generic medicines for the consumers. Pfizer's global R& D is the largest in the pharmaceutical industry and is located in New London, CT. it has been successful in breakthrough R&D in the areas of depression, erectile dysfunction, high cholesterol, HIV infection, hypertension and systemic fungal infections along with the most intractable diseases like cancer, arthritis, osteoporosis and stroke. The company has also entered the animal healthcare and has four dedicated plants for making animal products. It is the leader in this market with vaccines, anti-parasites, anti-inflammatories, anti-infectives, medicines and new therapies for a range of problems and diseases in animals. The Competitive Intelligence Report would cover the four major market segments for research and analysis of the competition to Bayer AG which is also among the largest Pharmaceutical companies along with Pfizer Inc. A strategic plan will be charted out based on the findings in the report for these four major sectors particularly, the pharmaceuticals and consumer healthcare (www.pfizer.com, 2008). Data Collection - As on September 30, 2008, a total of 114 products were in the pipeline by Pfizer varying across 10 therapeutic areas which are Allergy and Respiration, Cardiovascular, metabolic and endocrine Diseases (CVMED), Gastrointestinal and Hepatology, Genitourinary/Sexual Health, Infectious Diseases, Inflammation, Neuroscience, Oncology, Ophthalmology and Pain . These are the result of new medicinal development efforts around the world and the products are in four various phases of development and marketing. While in phase1 the new drug is tested for safety and tolerability, in phase2 they are administered on trial for effectiveness in treating, in phase3 these are tested for benefit-risk assessment on a large population and then are registered as new drugs and after approval enter the fourth and final phase4 where are used to assess long-term risks and benefits during post marketing studies. Pfizer has products for the 3rd leading disease causing death by 2020 and are in phase1 to phase3 of development. Its products for obesity and diabetes are in the phase1 to registration stage, while the Gastrointestinal and Hepatology products are in phase1 and phase2 along with products for Genitourinary/Sexual health. Dreaded infectious diseases like HIV are addressed by developing products by acquiring PowderMed and Coley Pharma which are the pioneers in their respective fields of medicine. While it acquired PowderMed in 2006 and is developing medicines and vaccines for treatment of infectious diseases like Influenza, it acquired Coley Pharma in 2007 and is leveraging its innovative ad pioneering technology in TLR-based vaccine adjustments and immunomodulators. Also, common infections like malaria and HIV are targeted for development of new medicines and vaccines and are in phases1 to 3 of development. For the inflammatory problems, products are in phases 1 and 2 while the products development for Neurological diseases like Alzheimer's disease, Schizophrenia, Insomnia, Epilepsy, etc are in phases1 to 3. Pfizer is in the 1st to 3rd phases of development of products for Oncology related ailments like Cancer which is second to heart disease in causing death. The company is investing increasingly in these products with increased publications for awareness and also expansion of number of programs for development as this type of disease is still to be supported with drugs and hence opens the opportunity for addressing the need for medicines. Sutent is one of the products' for treating kidney cancer that is approved and is very successfully received in the market. In phase2 is the product development for Ophthalmology for the aging population developing eye diseases mostly due to diabetes. Lastly, Pfizer is also entering the new market of acute and chronic pain relievers and the products are in the phases1 to 3 (www.Pfizer.com/pipeline, 2008). Pfizer has further tied-up with one of the world's biggest generic drug makers, anti-biotic Amoxicillin in March 2009 (Associated Press, 2009). It also has taken a consolidated step to make it a practice to interact with its shareholders every month to show their commitment to corporate responsibility (McCafferty, 2007). Also, on January 26, 2009 Pfizer has entered into a merger acquisition agreement with Wyeth valued at $50.19 per share, or a total of $68 billion. This merger is expected to generate a savings of about $4 billion by 2012. However, the merger agreement prohibits Pfizer to acquire any other group which requires an investment of more than $750 million before the completion of transaction with Wyeth. Further, Pfizer is found to enter into mergers and acquisitions in 2008 which is more than that in 2007 and also 10% of its total revenue is generated from the US market. Also, revenues for 2008 exceeded $500million from 14 countries and Pharmaceutical accounted to $21,786 million in profit as against $772 million in Animal health products market. Also, considering Pharmaceutical products revenue, the therapeutic area of Cardiovascular and Metabolic diseases products have generated the highest revenue in 2008 followed by Central Nervous System Disorder, Arthritis and Pain, infectious and Respiratory diseases, Urology, Oncology, Ophtholmology, Endocrine disorders and others. However, income revenues from continuing operations are $2,788, $2,759, $2,253 and $226 millions in the first, second, third and fourth quarters of 2008 respectively (Financial Summary, 2008). Pfizer markets its generic products in US to its three major wholesalers from whom its sales for 2008 accounted to a total of 36% (US SEC, 2009). Findings - It is found that Pfizer Inc. is one of the leaders in Pharmaceutical industry across the world and has many firsts to its credit. In the therapeutic areas, it is undisputable and has given Pfizer an instant market share and success owing to its merger with Warner-Lambert. With this merger it became the #1 in Pharmaceuticals in the world (www.pfizer.com, 2008). The ten therapeutic areas Pfizer intends to cover extensively cover a range of untapped or unmet medical needs that could affect the human body. As allergies and respiratory diseases are prone to severe health conditions, Pfizer has innovatively thought of administering the drug to the affected areas directly and is developing such inhalers. Products like Revatio are being developed for this area which has the potential of becoming a preferred medicine as it gives faster relief. Cardiovascular diseases like Diabetes and Obesity are related and are preventable. Since these diseases may lead to other diseases if not checked and kept in control, this segment needs more innovative therapies for the same. Hence Pfizer has realized this need for different therapies and plans to cater with its existing and new medicines. Pfizer's products for Gastrointestinal diseases and Hepatology are intended to improve the quality of life of approximately 50million effected by these diseases of whom, 20% are dissatisfied with the present medicines and look for innovative and new drugs from high quality manufacturers like Pfizer and hence it has a market potential in this area too. Pfizer is also considering developing more products for this area and provide a quality product much to the satisfaction of the patients. And as the patients would prefer brand image for a quality product to give results Pfizer maybe the preferred brand due to the quality of its products. The company has been leading with products like Unasyn and Xyvox for the most common infectious diseases and which constantly need to be enhanced according to the need and hence Pfizer is taking different approaches to developing medicines for various new diseases. It has introduced a new breakthrough product called Selzentry for the dreaded HIV/AIDS disease. The company's acquisitions of PowerMed and Coley Pharma are an advantage to it as it can use their state-of-the-art technologies to treat a wide range of diseases. This coupled with Pfizer's own R&D facilities enable it to bring new innovative approaches to developing products for other emerging diseases too. It also is developing medicines for a more common inflammatory disease like Osteoarthritis which can affect almost every human at some age. Hence developing medicines for these areas can give an advantage to Pfizer in terms of greater market share and market penetration and resulting in more monopoly of the industry. Neurotin and Lyrica are already extensively used quality drugs for neuro-related problems life Alzheimer's disease which is fast increasing and has about 18million people suffering this disease. Pfizer has acquired Rinat bioscience and Transtech Pharma in its initiative to develop quality products to address this disease. Along with these initiatives the company is also focussing on new approaches to developing products to treat a variety of stress-related diseases in future. Oncology diseases like Cancer which has more deaths after heart diseases are being addressed by four different methods of treatments and are in phase3 of development (www.Pfizer.com/pipeline, 2008). It is also found that the therapeutic area of Cardio-vascular and Metabolic diseases products is generating more revenue and the major market for Pfizer's products is the US. It is also found from the data collected that the recently concluded financial year has seen a downfall of sales in Pharmaceutical sector for existing operations. Further, the revenue for the newly emerging market for animal health products where Pfizer has monopoly to a large extent is much less than that of the Pharmaceutical industry. This calls for a faster introduction of new and innovative products to address the emerging trends of the industry. Strategic implications - Based on the data collected and the findings of Pfizer's business in Pharmaceuticals and Animal health products, it can be inferred that the availability of high-end R&D facilities across the globe and the company's strategic mergers and acquisitions along with its own brand image to provide quality products enable Pfizer to enter new markets as witnessed in Animal Healthcare and also in providing innovative approaches to product development. These facilities are a key factor to it and also help in gaining a monopoly of the Pharmaceutical and animal healthcare market owing to its state-of-the-art R&D facilities and strategies. It has reiterated its focus to develop more in-line products and product pipeline through acquisitions, licensing and alliances (US SEC, 2009). Bayer AG needs to counter the competition from Pfizer by moving fast in enhancing its product quality, increasing its range of products to cover a broader range of existing and emerging diseases, consider strategic alliances to leverage the expertise of others to move faster up the value chain, invest more in R&D which is beneficial in the long-run, take measures to establish itself as more responsibility conscious corporate as against its present image and also increase its product line to suit the needs of the consumers like Pfizer's over-the-counter (OTC) and generic products fro flexibility and increased market penetration. References - 1. Pfizer Inc. (2008), Pfizer's online Database, accessed on April 02, 2009 . 2. Pfizer Inc. (2008), "Portfolio for New Medicines and R&D Efforts around the World", Pfizer's online Database, accessed on April 02, 2009 < http://www.pfizer.com/pipeline>. 3. Associated Press (2009), "Aurobindo, Pfizer tie up for generic drugs", Published on March 03, 2009, accessed on April 02, 2009 < http://profit.ndtv.com/2009/03/03145528/Aurobindo-Pfizer-tieup-for-g.html>. 4. McCafferty Joseph (2007), "Pfizer to Shareholders: We're listening", Published on September 01, 2007, accessed on April 02, 2009 < http://www.directorship.com/pfizer-to-shareholders---we-re>. 5. Financial Report (2008), "Pfizer Inc and subsidiary Companies", accessed on April 02, 2009 < http://media.pfizer.com/files/annualreport/2008/financial/financial2008.pdf>. 6. US SEC (2009), "United States Securities and Exchange Commission- Form 10K", Published on February 27, 2009 accessed on April 02, 2009 http://media.pfizer.com/files/annualreport/2008/form10K_2008.pdf. Appendix 1 - Revenues by Therapeutic Areas - Year Ended December 31, 2008 Pharmaceutical (In Millions of Dollars) 2008 2007 2006 Cardiovascular and metabolic diseases $17,922 $18,853 $19,871 Central nervous system disorders 6,005 5,152 6,038 Arthritis and pain 3,096 2,914 2,711 Infectious and respiratory diseases 3,931 3,552 3,474 Urology 3,204 3,010 2,809 Oncology 2,551 2,640 2,191 Ophthalmology 1,777 1,643 1,461 Endocrine disorders 1,153 1,052 985 Total Pharmaceutical 44,174 44,424 45,083 Source: 2008 Financial Report (Pfizer Inc and Subsidiary Companies) Read More