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WHAT IS THIS REPORT ABOUT?
This report forms part of PFIZER case studies, regarding the transfer of four key consumer health or non-prescription brands to Johnson & Johnson (J&J) in India as part of a $16.6 billion (Rs65,660 crore) global deal between the two.
Who is the target reader?
This case study is designed for students, so that they are in a position to understand what
Are the problems a company faces to transfer their product.
The report is divided into three main parts - Introduction, Case Study and Conclusion -
Followed by Research Methodology.
ô€‚ƒï€ Introduction: provides historical background on the company and explains how the
Company has responded to a particular business challenge.
SWOT: Provides the SWOT analysis of the company.
Financial report: provides the financial position of the company
ô€‚ƒï€ Case study: provides the main body of text, detailing the company's approach to a
ô€‚ƒï€ Conclusion: highlights the main findings of the report, summarizing the key
Strategies the company has employed.
ô€‚ƒï€ Research Methodology: details when research was carried out and the approach
Used in writing the report.
FOUNDED- Brooklyn, New york (1849)
HEADQUATER- New york city, New york us
KEY PEOPLE- Jeff Kindler (chairman and CEO)
The pursuit of innovation is basic to Pfizer's culture. It shapes our strategy, defines our purpose, and governs every facet of our operations -- from research and development (R&D) that leads to pharmaceutical inventions, to the transfer of knowledge to patients and providers, to the way we respond to the changing marketplace.
Pfizer scientists have produced innovative breakthroughs in a wide range of research areas, including depression, erectile dysfunction, high cholesterol, HIV infection, hypertension, bacterial infections and systemic fungal infections. And today we're taking on some of the world's most difficult diseases, including cancer, arthritis, and osteoporosis.
Pfizer in India
Pfizer Limited (India) has a turnover of US$ 159.52 million (November 2009)
One of the highest spenders in pharmaceutical R&D globally, Pfizer has made clinical research investments of US$ 6.05 million (November 2009) in India
The company was awarded the FICCI SEDF (Socio Economic Development Foundation) Certificate of Commendation for its social responsibility efforts
Pfizer has won several awards including that for the multinational pharmaceutical company of the year and the most respected MNC
About our products
Six Pfizer brands feature among the Top 100 pharmaceutical brands in India
Two of Pfizer India's brands -- Corex (Cough Formulation) and Becosules (Multivitamin) -- continue to rank among the Top 10 pharmaceutical drug brands
Pfizer has won the Golden Peacock Innovative Product for Magnex (Sulperazon)
Becosules has won the Most Trusted Brand Award
Going beyond medicines
In India, Pfizer instituted the first ever Disease Management Programme -- Healthy Heartâ„¢ in Cardio Vascular Disease (Hypertension, Chronic Stable Angina and Dyslipidemia), in partnership with Apollo Hospital, Hyderabad and Apollo Hospital, Chennai
We offer Patient Assistance Programmes for Glaucoma, Breast Cancer and Neuropathic Pain
We partner with physician associations to develop recommendations / guidelines of managing specific diseases
Location & People
Headquartered in Mumbai
Over 2,300 colleagues
State-of-the-art manufacturing facility at Thane, Maharashtra
Formed theÂ Academy of Clinical Excellence (ACE)Â in collaboration with Bombay College of Pharmacy to provide professional training to investigators and other clinical research personnelÂ
We have also partnered with other pharmaceutical companies, contract research organisations and investigators to establish theÂ Indian Society for Clinical Research (ISCR),Â a professional society aimed at raising the standards of clinical researchÂ
Pfizer Education and Research League (PEARL)Â is a new initiative in which Pfizer seeks to partner with institutes to improve existing clinical research and continuing medical educational capabilities
SWOT ANALYSIS OF PFIZERE
SWOT Analysis Strengths
ô€‚ƒï€ Largest global pharmaceutical company
ô€‚ƒï€ Well-established market presence in India
ô€‚ƒï€ Financial capability, business portfolio and industry experience to exploit the local drug
ô€‚ƒï€ Diverse local manufacturing presence, based on a broad portfolio of antibiotics, vitamins
and OTC pharmaceuticals, consumer and healthcare products
ô€‚ƒï€ Weak domestic patent law previously a major barrier to market investment for the
ô€‚ƒï€ Opaque government drug-pricing policy favouring local drug manufacturers
ô€‚ƒï€ Time lag between global and local launches due to subsidiary/parent company
ô€‚ƒï€ The alignment of drug-patent legislation with WTO standards in January 2005
ô€‚ƒï€ Robust branded drug market growth
ô€‚ƒï€ Strong OTC drug market growth
ô€‚ƒï€ Plans to launch three new products each year
ô€‚ƒï€ Potential for R&D activity expansion, drawing on a highly skilled, yet low-cost pool of
local scientists and low operational costs
ô€‚ƒï€ Government failure to enforce WTO-compliant drug patent legislation properly
ô€‚ƒï€ Government failure to revise its opaque and discriminatory pricing and reimbursement
India Pharmaceuticals & Healthcare Report Q4 2009
Â© Business Monitor International Ltd Page 64
ô€‚ƒï€ Fragile domestic economy, remaining susceptible to wide fluctuations based on
ô€‚ƒï€ Anticipated price cuts
Recent Activities Pfizer entered a licensing agreement with Aurobindo in March 2009. The Indian firm agreed that
Pfizer would market 82 of its generic pharmaceutical products including solid oral doses and
injectables covering cardiovascular disorders, central nervous system treatments and antibiotics
within Europe and US.
Earlier that month, Pfizer announced that it would set up 600 smoking cessation clinics across
India before the end of 2011. Pfizer markets Champix (varencicline) for the treatment of nicotine
dependence. The patent covering Champix was challenged by Dr Reddy's in May 2009.
In January 2008, Pfizer contracted domestic company Hikal to manufacture and supply APIs. By
outsourcing this stage of the production process, costs would be dramatically reduced for the
world's largest, but currently embattled, pharmaceutical company. Few details of the deal were
released. The APIs would be made at Hikal's US FDA-approved plant within the Jigani industrial
Product Portfolio Pfizer India manufactures, markets and exports a wide range of pharmaceuticals and therapeutic
products, ranging from vitamin supplements and nutritionals, to antibiotics and cardiovascular
Case of "PFIZER"
More than a year after the US drug giant Pfizer Inc. sold its consumer health business to Johnson & Johnson (J&J) in a worldwide deal, the transaction remains incomplete in India. Even though the $16.6 billion (Rs65,660 crore) deal closed. the India business transfer remains uncertain because Pfizer Ltd, the 41% local subsidiary of Pfizer, is struggling with the transition due to a lack of consensus between employees and management.
"The consumer health business transfer to Johnson & Johnson is delayed in India despite an early global closure, due to technical reasons. The board of directors of the company is now evaluating various options available for a smooth restructuring," said R.A. Shah, chairman of Pfizer Ltd, in an emailed statement. Added Pfizer India managing director Kewal Handa: "The delay in Indian business transfer was expected because the company here is a listed entity and requires related clearances. So the board is yet to take a final decision in regard to the business
A J&J spokesperson in India said that, early this year, J&Jâ€ƒIndia managing director N.K. Ambvani had discussed the business transfer options with Pfizer management and had clarified most of the issues pertaining to employee transfers. However, details of this discussion couldn't be independently ascertained.
Consumer health, or the over-the-counter business of Pfizer in India, is worth at least Rs150 crore, which is about 20% of the company's total sales. Major products in this division are Gelusil, the anti-acidity drug, Benadryl, leading cough syrup in India, Listerine Mouthwash, Caladryl anti-allergic lotion among others.
The division employs about 200 people here. A Pfizer India official, who didn't want to be identified, said the problem was protests from the 200 employees who were concerned about "job security".
A global team from Pfizer that had been working on the transition of the international consumer health business was in India last year to recommend an appropriate option. "However, their views on the India transition model have still not been conveyed to the local management," said the same Pfizer India official.
According to the initial plan, all the employees working with Pfizer India's consumer health business were supposed to be transferred to J&J India, the leader in the Indian consumer health business with annual sales of about Rs600 crore. J&Jâ€ƒIndia operates in three areas-pharma, medical and consumer health. The three divisions typically act as separate strategic business units.
"The employees at the company's consumer health division are totally confused now as there is no assurance from the management that they will be inducted into the rolls of Johnson & Johnson as permanent employees," claims Santosh Sawant, an employee union leader at Pfizer India. "They are also uncertain about the terms and conditions that the new company will offer." Meanwhile, a senior executive heading Pfizer India's consumer health business left the company, adding to the uncertainty. Overall revenues, meanwhile, have declined in the last three quarters though profits have grown marginally.
Finally the deal was complete on 31 December
Pfizer Ltd, the Indian arm of the world's largest drug maker Pfizer Inc., approved the long-awaited transfer of four key consumer health or non-prescription brands to Johnson & Johnson (J&J) in India as part of a $16.6 billion (Rs65,660 crore) global deal between the two in 2006.
The four brands-Listerine, Benadryl, Caladryl and Benylin-that contribute about 10% of Pfizer India's annual sales have been transferred to J&J for Rs214.85 crore, according to a company notice to the Bombay Stock Exchange.
This transfer agreement between Pfizer and J&J in India ends a two-year saga. AsÂ MintÂ reported on 5 October, more than a year after the US drug giant completed the sale of its consumer health business to J&J, the transaction remained incomplete in India.
However, unlike the global deal that involved J&J acquiring the entire Pfizer consumer health business, Pfizer India will retain all other brands in its non-prescription portfolio. These include Gelusil, Nebasulf, Selsun, Ferradol, Neko and Waterbury's Compound. All Pfizer employees in the division will also remain with the company.
Pfizer managing director Kewal Handa wrote in an email toÂ Mint: "We believe there is tremendous potential in our retained brands and new business strategies will be put in place to maximize the opportunities and drive growth in the consumer health business."
Pfizerâ€ƒIndia, which is a 41% listed subsidiary of Pfizer, will also provide J&J some transitional services to complete the product transfer agreement, signed on 31 December. J&J India spokesperson Anil Nayak said: "The four Pfizer brands which will be transferred to J&J will be added to the consumer sector business, which is the main area of our India business."
While the global deal closed in December 2006, uncertainties loomed large over the India business transfer process because of a lack of consensus between employees and management of Pfizer in India. Besides, as a listed entity, it also needed regulatory approvals.
Pfizer shares gained 0.98% to Rs805.05 at Monday's close on the Bombay Stock Exchange.
After going through this case we conclude that the deal between Pfizer and j&j India was stared on 3 of October regarding the transfer of four products of Pfizer that is Listerine, Benadryl, Caladryl and Beryline. Which contributes 10% of total sales of Pfizer? The problem in this deal was the employee which was associated with this product will remain in Pfizer or will also transfer to j&j India. The employees were worried about their job security
That if they are transfer to j&j they were not aware about the position that they will hold. Due to this the company faces a lot of problem in making the deal. But finally on 31st of December the deal was completed and the employees were transfer to j&j with their job security.
This case study was derived from mint newspaper and through the help of internet. The study was carried out between 22 October to 28 October.