Pfizer, Inc., is a global pharmaceutical company based in New York City. It was ranked the biggest pharmaceutical company in terms of sales in 2007 and has been a component of the Dow Jones Industrial Average since 2004. As of February 2008, it had an approximate market capitalization of $155 billion. With $7.5 billion invested in research and development (R&D) every year, it is one of the top R&D companies in the world. Despite an enviable market position, Pfizer faces challenges including a dwindling pipeline, an unprecedented number of patent expirations, increasing generic competition, and pricing pressure.
Pfizer was founded in 1849 by Charles Pfizer and Charles Erhart in New York State. At the time, it was named Charles Pfizer & Co. The company’s first pharmaceutical product was an edible form of santonin, which was used to treat intestinal worms in the mid-19th century. By combining blended santonin with almond toffee, they created a product that consumers enjoyed. It was a commercial success that helped launch the company.
Through most of the 19th century, the company focused on producing chemicals, manufacturing such products as tartaric acid (which can be used as a laxative), cream of tartar (which can be used as a cleansing agent), and citric acid (useful in caffeinated soft drinks, such as colas). It also produced many generic products, such as iodine, morphine, and chloroform. In 1950 Pfizer started to sell the first product it developed internally, a broad-spectrum antibiotic called Terramycin. With the launch of this product, Pfizer demonstrated its growing focus on pharmaceuticals and developed a strong presence in animal health products, which continues today.
Acquisitions And Divestitures
Before 2000, Pfizer completed only two major acquisitions. The first acquisition of note was of a company called J. B. Roerig in 1953, which served to prop up Pfizer’s fledgling agricultural and nutritional division. Pfizer also acquired full ownership of Taito in 1983; that company contributed to Pfizer’s antibiotic manufacturing and distribution activities.
After 2000, Pfizer embarked on a series of mergers and acquisitions. It merged in 2000 with Warner-Lambert and acquired Pharmacia in 2003. These mergers gave birth to the world’s largest pharmaceutical company and gave Pfizer access to many blockbuster drugs. In the case of Warner-Lambert, Pfizer acquired the rights to Lipitor; the Pharmacia merger gave Pfizer access to Celebrex. Pfizer has since acquired many smaller companies, including Meridica (2004), Esperion Therapeutics (2004), Vicuron (2005), PowerMed (2006), Embrex (2007), and Encysive Pharmaceutical (2008). It is estimated that Pfizer acquires more than a half-dozen companies every year to replenish its slowing pipeline.
Pfizer has also divested major divisions in the past few years. It sold its consumer healthcare department to Johnson & Johnson in 2006 and Dorom, its Italian generic pharmaceutical marketing company, to Teva Pharmaceutical in 2004. It has also sold manufacturing plants around the globe in an effort to reduce costs.
Pfizer and the companies it has acquired have developed many important drugs and innovations. In the 1940s, for example, using a proprietary fermentation process, Pfizer successfully mass-produced penicillin. Other notable innovations include Zoloft (an antidepressant), Lipitor (a cholesterol reducer), and Celebrex (a Cox-2 inhibitor for pain relief ). The top pharmaceutical products produced by Pfizer include Lipitor, Zoloft, Celebrex, Diflucan (an antifungal drug), and Viagra (a drug used to treat male erectile dysfunction and arguably Pfizer’s most popular product). Pfizer also provides drug-delivery products. Exubera, for example, is the first diabetes treatment for adults that can be inhaled rather than injected.
Like all big pharmaceutical companies, Pfizer is subject to scrutiny by the press and stakeholders and currently faces several controversies. It is being sued by the government of Nigeria, for example, for allegedly running a clinical test of an experimental meningitis drug without proper authorization. It was also accused in the 1990s of overpricing its AIDS treatment drug, Diflucan, in Thailand, which led to the Thai government’s removing its local patent.
- Arnold Engel, The Pfizer-Pharmacia Merger and Multimarket Contact in the Pharmaceutical Industry (Dartmouth College, Department of Economics, 2007);
- Pfizer, www.pfizer.com (cited March 2009);
- Jeffrey L. Rodengen, “The Legend of Pfizer” (Write Stuff Syndicate, 1999);
- Peter Rost, The Whistleblower: Confessions of a Healthcare Hitman (Soft Skull Press, 2006);
- Joe Stephens, “Pfizer Faces Criminal Charges in Nigeria,” Washington Post (May 30, 2007).
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