Today's news included a couple of interesting reports from some of the pharmaceutical industry giants. The outlook for the companies mentioned is rather mixed and predicting some serious trouble lying ahead of them.
Pfizer, the world’s largest pharmaceutical company (probably most known for the common public because of Viagra, which got a great share of media attention in its time) seems to be struggling greatly. Stiffening competition from makers of generic drugs and patent expirations are accounted for most of the trouble (See: http://biz.yahoo.com/ap/070122/pfizer_restructuring.html?.v=43 ). However, one should not miss that this drug maker's business environment just shares the notion that its products are overpriced, just not worth the great deal of money that is on the price tag. This is a problem that might not be as easy to solve, as those, call them "technical" trouble named above.
Pfizer's first reaction was the announcement of cutting around 10,000 jobs, and closing a couple of R&D and the production facilities. The goal of the CEO Jeffrey Kindler is to achieve a much leaner structure and: "maximize revenue, cut cost, simplify structure, improve communications, trim the fat" (From: http://online.wsj.com/article/SB116946650860883613.html?mod=home_whats_news_us ).
Meanwhile, another pharmaceutical titan Bristol-Myers Squibb is involved in a high-stake court case over the exclusive rights to the hit drug Plavix. The drug is reported to generate 4Bln $ revenue for the drug maker in 2005 alone. That fully underlines a possible impact of loosing in court. Still even if the company wins its case, it will still face competition from the generic version of Plavix. Fortunately for Bristol-Myers Squibb, unlike Pfizer, this drug maker does not face any major patent expires in the next couple of years (More on the story: http://online.wsj.com/article/SB116932062100782781.html?mod=home_whats_news_us )
The future for both of these companies is a big unknown. Regardless of the work that they have to do in the intermediate terms, the drug manufacturers must prove that they creating so much value with its drugs, to justify its prices. Otherwise, the future might be bleak for them.
Pfizer, the world’s largest pharmaceutical company (probably most known for the common public because of Viagra, which got a great share of media attention in its time) seems to be struggling greatly. Stiffening competition from makers of generic drugs and patent expirations are accounted for most of the trouble (See: http://biz.yahoo.com/ap/070122/pfizer_restructuring.html?.v=43 ). However, one should not miss that this drug maker's business environment just shares the notion that its products are overpriced, just not worth the great deal of money that is on the price tag. This is a problem that might not be as easy to solve, as those, call them "technical" trouble named above.
Pfizer's first reaction was the announcement of cutting around 10,000 jobs, and closing a couple of R&D and the production facilities. The goal of the CEO Jeffrey Kindler is to achieve a much leaner structure and: "maximize revenue, cut cost, simplify structure, improve communications, trim the fat" (From: http://online.wsj.com/article/SB116946650860883613.html?mod=home_whats_news_us ).
Meanwhile, another pharmaceutical titan Bristol-Myers Squibb is involved in a high-stake court case over the exclusive rights to the hit drug Plavix. The drug is reported to generate 4Bln $ revenue for the drug maker in 2005 alone. That fully underlines a possible impact of loosing in court. Still even if the company wins its case, it will still face competition from the generic version of Plavix. Fortunately for Bristol-Myers Squibb, unlike Pfizer, this drug maker does not face any major patent expires in the next couple of years (More on the story: http://online.wsj.com/article/SB116932062100782781.html?mod=home_whats_news_us )
The future for both of these companies is a big unknown. Regardless of the work that they have to do in the intermediate terms, the drug manufacturers must prove that they creating so much value with its drugs, to justify its prices. Otherwise, the future might be bleak for them.
