Pfizer’s Business Model
There are several authors from our readings that Pfizer’s CEO and employees can learn from. Pfizer is one of the largest corporations in the nation. Pfizer is a company that makes pharmaceutical products for a variety of everyday illness and serious diseases for humans and animals. Some of the most commonly known products would be Viagra, which treats erectile dysfunction, Chantix, which helps stop smoking, Exubera, which treats diabetes, Zoloft, which is an anti-depressant, and Sutent, which treats kidney cancer.
Pfizer was founded in 1849 by Charles Pfizer and Charles Erhart. The first office, laboratory, factory, and warehouse were in Brooklyn New York. The first product that they made was santonin, which is a palatable antiparastitic used to cure roundworm and was an immediate success. In the years to come they would produce tartaric acid and cream of tartar, which is used in the food and chemical industries. Then the company moved to a bigger building in Manhattan. Citric acid became the company’s main product and would add to the growth of the company in decades to come. A few years later, Pfizer opened a second station in Chicago IL in 1882. After Charles Erhart died, he left the rest of the company to Charles Pfizer, which gave him sole ownership of the company. In 1906 Charles Pfizer died, and at the time the companies’ sales exceeded $3 million.
John Anderson took Charles Pfizer’s places as chairman in 1914 and in his years, a chemist named James Currie successfully made mass production of citric acid, which made Pfizer free from the dependency on European citrus growers. This lead to many other discoveries, such as the antibiotic properties of the penicillin mold which would change the course of Pfizer’s future.
In 1936, Pfizer became the worlds leading producer of vitamin C, penicillin, and the leader in fermentation technology. Pfizer was also called upon by the U.S. Government to make large amounts of penicillin for the soldiers fighting in WWII.
The first pharmaceutical sold in the United States in 1950, under the Pfizer label was Terramycin, which is an antibiotic. By that time, Pfizer Corporation was established in Belgium, Brazil, Canada, Cuba, England, Mexico, Panama, and Puerto Rico.
In 1952, Pfizer started offering solution to animal health problems, which opened up a new farm in Indiana to create animal medications. This was also followed by their first “once-a-day” medicine, named Vibramycin, and their discoveries with wound relief medication for arthritis and asthma, also their high blood pressure medication, and many other medicines for well-liked medical problems. Pfizer continued to make breakthroughs in medicine for humans and animals.
In 1998, their most common product, Viagra was made. Viagra offered a breakthrough treatment for erectile dysfunction. A year after, Forbes magazine named Pfizer the “Company of the Year.” Since 2000, Pfizer has merged with Warner and Lambert Company, which still remains the world’s fastest-growing major pharmaceutical company.
In 2002, Pfizer offered a Share Card Program, which provides expedient low-income Medicare beneficiaries with access to prescription medicine, for a flat rate of $15 per prescription. Pfizer’s current projects are finding answers and solutions to the HIV/AIDS problem; they also just merged with Pharmacia Corporation and launches Relpaz which is a medication for the treatment of migraines.
Since 2004, Pfizer was also included in the Dow Jones Industrial Average, which is the best known stock market barometer in the world. Pfizer has turned out to be one of the fastest growing and producing companies in the world; offering solution to major and everyday sickness for humans and animals.
The CEO of Pfizer was Hank McKinnell, but as of February 2007 the new CEO is Jeffrey B. Kindler. Jeffrey Kindler led several important groups such as global security groups, worldwide moral groups, compliance groups, communications, and a government relation group. He was born in Florida but was raised in Current Jersey. Jeffrey worked at many law firms and was an attorney at the Federal Communications Commission. He then worked at the law firm of Williams & Connolly and moved to General Electric, which he was Vice President of Litigation and Legal Policy. As well, he worked with corporations including McDonald’s Corporation and became the Executive Vice President and General Counsel. There he was responsible for both legal and corporate affairs. Working as an Executive Vice President and General Counsel, Jeffrey established a pro bono legal service program. Pro bono means to work for the public for a good cause rather than working for a profit or income. This program has become a model for many corporations and law firms.
During Jeffery’s career, he has been recognized for his leadership in areas such as the pro bono legal services, diversity, and corporate social responsibility by a variety of groups such as Outward Bound and Minority Corporate Counsel Association. As Cicero explains, a business must seek justice to be a good business. When a business has justice then it becomes very successful. Jeffery, establishing the Pro bono, shows how important satisfying his stakeholders is, and what it means to put stakeholders before himself.
Pfizer has over 106,000 employees spread across all of its branches. This makes Pfizer one of the biggest companies in the United States. Along with over 106,000 employees, Pfizer is one of the leading cash corporations. On average Pfizer’s revenue is 48.3 billion dollars and its net income is almost at 20 billion dollars. Also, last year alone, Pfizer has spent an astonishing 7.4 billion dollars in research and development alone. This makes Pfizer the biggest pharmaceutical company in the nation.
A request is being brought to many pharmaceutical companies like Pfizer, requesting the demand for personalized treatment. The consumer group of pharmaceuticals is growing larger and larger. This is the cause for a demand for patient specific tailored treatments. Most pharmaceutical companies including Pfizer have yet to confront this demand, but it will be only growing stronger as the months pass.
Even though Pfizer is very popular, the company has been shifting from receiving good revenue to a decreasing amount of revenue. “The company revenue increased in 2004 by 17.4%. This increase was primarily attributable to the merging between Pharmacia and Pfizer, which was acquired in April 2003, the impact of foreign exchange fluctuations and strong product performance during this year” (pharmaceuticalbusinessreview.com). Profits during 2004 increased about 333.5% and the net profit was $11,361 million. When Pfizer announced that it had stopped clinical trials and the development of its drug, torcetrapib (which is supposed to relieve boost levels of good HDL cholesterol), the shares tremendously dropped. A gape shows that out of 15,000 people who were treated with torcetrapib, 82 people died. Though, according to the issues with the torcetrapib, Pfizer market capitalization fell tremendously from being at $201 billion to now, $179 billion (moneycentral.msn.com). Therefore, I recommend Jeffery, his teammates, and employees to read Cicero’s theory because justice is very important according to Pfizer because Pfizer produces medication to treat animals and people who need medication. Thus, Cicero’s theory would be a grand help for Pfizer and its stakeholders because justice would be served, and with justice being served there would be more consumers, which contributes to Pfizer’s revenue and profit. Nevertheless, Jeffery’s Pro bono, would then be suitable because Pfizer would be more concerned on its consumers in working for the public for a valid cause rather than to work for the public to simply make money.
Pfizer faces great challenges in its market place. Pfizer’s competitors include, but are not limited to: Barr Pharmaceuticals, Mylan Laboratories, Teva Pharmaceutical Industries, Watson Pharmaceuticals, Alpharma, King Pharmaceuticals, and Ranbaxy Laboratories. These companies develop up the majority of the pharmaceutical market. These opposing companies also posse different treats to Pfizer, but Pfizer has made plans to combat them. The largest threat to Pfizer is the cheap generic drug market. To help combat this Pfizer will be releasing two new drugs. One drug designed for cholesterol management and the other for therapy of life threatening cancers. Pfizer also plans to implement a unusual research and development strategies, according to press releases. These will reduce cost, and increase production speeds. These improvements will help combat the problems, but are only temporary fixes for competing against the generic drugs market.
The pharmaceutical industry is a very high risk for companies that relay on tag name drugs. Every time a company such as Pfizer, brings a new drug to the market, Pfizer goes through a process full of chaos. It cost roughly $750 million to bring a note name drug that, even though the FDA could still reject the drug. The rejection happens to pharmaceutical companies continually, and was the case for some of Pfizer’s drug. Even when a drug is successful, its paten will last for only year. Then generic drug companies will be able to produce drugs that are nearly identical for a part of the price. Since there is no draw for the brand name drug companies like Pfizer to compete with this, they must keep taking the same $750 million dollar risk repeatedly, which is one Pfizer’s greatest challenge in the industry.
An author that would most support the CEO and employees of Pfizer would be Francis Bacon. His beliefs rested in the First Mover’s Advantage, which says that the early bird gets the worm. In this case, Pfizer has been the first pharmaceutical company producing breakthrough discoveries and medicines, such as the leading producer of Citric Acid and Penicillin. Another one of these theories was ‘Diversification’, which means that you need to guard risky investments with certain ones. In this case, Pfizer branched out using the animal medicine as a risky investment but was still fully protected by the large growing fortune that penicillin brought in around the same time. Those who work at Pfizer should strive to continue inventing unique products and continue to branch out to continue to hold its place in the economy.
Another author that we suggest the stakeholders of Pfizer to read would be Richard S. Tedllow’s theory of the Who Are the Titans. He explains how a titan is someone that transforms and industry that will affect everyone’s lifestyle. Pfizer has extremely affected everyone’s lifestyle because it has offered solutions for the illnesses and diseases around the world. Without Pfizer, who knows were we would be in pharmaceutical technology and where we are today in the knowledge of diseases that have never found a cure, such as HIV/AIDS. Tedllow offers lessons that must be followed for a business to succeed, which includes: Having the courage to have a vision for a product that will affect the market, shaping the vision into an actual company, being dedicated, even to a fault of the company, never looking back, and especially delivering more than promised. These lessons benefit the consumer as remarkable as it does the producer of the goods. Pfizer has always offered more than it had to, including the new Share Card Program that offers insurance on medicine to those who have low-income. This gives Pfizer a top-notch name, and makes people chose it not only because it offers well-behaved, effective products, but because they go out of their way to make the consumer feel lucky. Jeffery, his leadership team and employees should read Tedlow’s essay because Jeffery would learn more ways to gain Pfizer even a better corporation. Jeffery would benefit from Tedlow’s theory because like Tedlow explains, by delivering more than you promise, it makes one become remember able and very useful. From this reading, employees of Pfizer should continue to work with the lessons he teaches about believing in your company and standing by it, even to fault, and to continue to build unusual ideas on this already successful company.
Even though Pfizer had some up’s and down’s with revenue and its products, it still remains one of the largest corporations. With some help of Tedlow’s, Cicero’s, Darwin’s and Bacon’s theory, Pfizer would be the best pharmaceutical resource. The final lessons that we would expect the CEO and employees of Pfizer to take away from this paper and presentation, is to keep doing what it’s been doing and always let ethics rule a strong part of your business. This company should continue to prevail in medical discoveries in years to come and try new things that would set them above competitors. It also needs to remember that it should have faith in what the business supplies to the world, which are cures and opportunities for people suffering with sickness to live a better life. Everyone should remember Darwin’s key words of business; which is to have a good business, all you need is to supply a good product and give your employees a good workplace.
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Filed under Pharmacy Business Solutions by on Dec 6th, 2011. 
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