PFIZER’S PHARMACEUTICAL PFIZER’S PHARMACEUTICAL FUNKFUNK

PRESENTED PRESENTED BYBY::

NIDHINIDHI NAINA JHANAINA JHA

NEHA SHARMANEHA SHARMAABHISHEK PRAKASHABHISHEK PRAKASH

MAYAANK BHATNAGARMAYAANK BHATNAGAR

► Pfizer’s goal : To persuade medical professionals the world Pfizer’s goal : To persuade medical professionals the world over to make Pfizer drugs the treatment of choice for their over to make Pfizer drugs the treatment of choice for their patients aches and pains.patients aches and pains.

► Pfizer, the drug maker whose annual advertisement budget is Pfizer, the drug maker whose annual advertisement budget is $3 billion and their massive sales force which made Pfizer the $3 billion and their massive sales force which made Pfizer the fourth largest advertiser in the land.fourth largest advertiser in the land.

► Pfizer spends last year twice as much on sales and Pfizer spends last year twice as much on sales and administrative expenses -- $16.9 billion and also employs administrative expenses -- $16.9 billion and also employs 15000 scientists and staff in 7 major labs around the world.15000 scientists and staff in 7 major labs around the world.

► Pfizer has more than its share of mega sellers including Lipitor, Pfizer has more than its share of mega sellers including Lipitor, Viagra & Zoloft earned $16 billion last year. Viagra & Zoloft earned $16 billion last year.

► There was one problem i.e. blockbuster model doesn’t really There was one problem i.e. blockbuster model doesn’t really work.work.

► Other companies started harder to defeat the leader with a one-Other companies started harder to defeat the leader with a one-pill, mass market solution.pill, mass market solution.

END OF AN ERAEND OF AN ERA

► Food & Drug Administration was holding contentious hearingsFood & Drug Administration was holding contentious hearings► Painkillers like CELEBREX & BEXTRA contain the large amount of Painkillers like CELEBREX & BEXTRA contain the large amount of

COX 2’s which will lead to cardiovascular problems.COX 2’s which will lead to cardiovascular problems.► Even if the drugs survive, they are almost surely irreparably Even if the drugs survive, they are almost surely irreparably

damaged.damaged.► Big Pharma’s sales were expected to grow slowly by 2.2% Big Pharma’s sales were expected to grow slowly by 2.2%

according to Data monitor PLC.according to Data monitor PLC.► Pfizer’s also declined by an estimated 1.5% year which caused Pfizer’s also declined by an estimated 1.5% year which caused

the investors to flee the stock which has dropped by 45%.the investors to flee the stock which has dropped by 45%.► Pfizer’s board member Stanley O. Ikenberry said “ We have to Pfizer’s board member Stanley O. Ikenberry said “ We have to

reexamine all the assumptions that pharmaceutical companies reexamine all the assumptions that pharmaceutical companies have made for as long as I can remember”have made for as long as I can remember”

END OF AN ERA (Contd….)END OF AN ERA (Contd….)

► McKinnell knew that Pfizer is heading into rough times and also McKinnell knew that Pfizer is heading into rough times and also puts emphasis on the current need i.e. to gain resurgence.puts emphasis on the current need i.e. to gain resurgence. ““also said that there is a host of untreated diseases that represent huge also said that there is a host of untreated diseases that represent huge

potential markets “potential markets “

► After this they started their internal research of coming out with After this they started their internal research of coming out with 20 new drug applications in five year period.20 new drug applications in five year period.

► They also started to testing the drug in a combo pill with its They also started to testing the drug in a combo pill with its cholesterol fighter (Lipitor). cholesterol fighter (Lipitor).

NICHE MARKETINGNICHE MARKETING

►Viagra being the leader among the Viagra being the leader among the category , saw fall in sales of 11% due category , saw fall in sales of 11% due to competition in the market.to competition in the market.

►Huge opportunities in certain sectors, Huge opportunities in certain sectors, but the market is small and there is but the market is small and there is presence of cheaper alternatives of presence of cheaper alternatives of treatment.treatment.

►Patent protection for drug companies Patent protection for drug companies available for limited time.available for limited time.

Cont…Cont…

►Blockbuster model gives high leverage Blockbuster model gives high leverage but also increases cost.but also increases cost.

►There is need to maintain the sales high There is need to maintain the sales high to bear with the fixed cost.to bear with the fixed cost.

►Threat of declining of sales once patent Threat of declining of sales once patent protection ends of several drugs.protection ends of several drugs.(expected to decline by 9%)(expected to decline by 9%)

►Cost reduction expected to be announced Cost reduction expected to be announced around April analyst meeting. McKinnell around April analyst meeting. McKinnell expected to slash up to $ 3 billion in next expected to slash up to $ 3 billion in next several years.several years.

RADICAL RESTRUCTURINGRADICAL RESTRUCTURING

IT INCLUDESIT INCLUDES DecentralizationDecentralization Generating revenue from established Generating revenue from established

products products Accelerating growth in emerging markets Accelerating growth in emerging markets Focusing on continuous improvement and Focusing on continuous improvement and

innovationinnovation Investing in complementary businesses.Investing in complementary businesses.

Patent ChallengePatent Challenge► Consequences if Ranbaxy succeeds in Consequences if Ranbaxy succeeds in

knocking down both Lipitor patents.knocking down both Lipitor patents.► McKinnell , the architecture of the bigger-is-McKinnell , the architecture of the bigger-is-

better strategy was widely known as a quick better strategy was widely known as a quick study and has no shortage of confidence in study and has no shortage of confidence in both Pfizer and his own abilities.both Pfizer and his own abilities.

► McKinnell made clear his concerns about McKinnell made clear his concerns about R&D productivity problem.R&D productivity problem.

► The task force evolved in checking drug- The task force evolved in checking drug- development flops had a good balance development flops had a good balance between totally novel approach and less between totally novel approach and less risky ones. But it solved only part of the risky ones. But it solved only part of the problem.problem.