Paper - Wyeth

U.S. based companies hold rights to most of the world’s rights on new medicines and holds thousands of new products currently being developed. As of 2012, the industry helps support almost 3.4 million jobs in the U.S. economy. It is also one of the most heavily R&D based industries in the world. In the United States, the environment for pharmaceuticals is much friendlier than other countries around the world in terms of pricing ability and regulations. Both the Pharmaceutical and Biotechnology industries have experienced significant growth in the past year with year-over-year increases of 13.02% and 34.69% respectively. It is an even more striking when looking at the past five years considering both have beat out the S&P 500 with pharmaceuticals increasing an additional 31.44% and the biotechnology sector besting an astonishing 269.3% more return than the

Wyeth Pharmaceuticals leadership is very committed to quality. Wyeth is a global leader in prescription medications. They are committed to growth and developing new medicinal products in their research and development divisions. The mission and vision statements of Wyeth Pharmaceuticals demonstrate the alignment of quality to the organization’s strategic goals and objectives. .” The vision statement is “Our vision is to lead the way to a healthier world. By carrying out this vision at every level of our organization, we will be recognized by our employees, customers and shareholders as the best pharmaceutical company in the world, resulting in value for all.”(Wyeth.com, 2008)

Although R&D has been retained by the large pharmaceutical firms, there has been a continuous decline in the R&D productivity. Controlling R&D is imperative to the success of a Pharmaceutical firm. However, as the pharmaceutical industry is maturing, there are diminishing returns to the R&D investment. Fewer and fewer blockbuster drugs are being discovered and therefore R&D is not the most value adding component in the value

Since its humble beginning as a small drugstore, Merck has placed a large amount of importance on improving the health and well-being of its customers. As drug patents expire and genetic forms of their top products become available, Merck’s strategy is to do the unexpected; instead of raising the price of their older products in favor of patent protected new drugs, Merck focuses on reducing their cost in order to better compete with their generic counterparts. Additionally, Merck’s plan for growth now encompasses a much more aggressive pursuit of new drugs in their pipeline through extensive research. Merck became the second largest health care company in the world after the merger with Schering-Plough in 2009 and has

Those target markets who rely on Johnson & Johnson health and medical needs are mostly patients, doctors, nurses and civilians. Therefore, the company need to sustain their products and services over all these years to ensure that lower income people and underprivileged patients are able to access on their medicines. This however requires the company to balance patient’s access and competitive dynamics in line with their need as the company need to have enough resources to keep on being innovating, creating new and better medicines and at the same time making sure there will be a fair return to the shareholder as well. Johnson & Johnson also work closely with the governments, physicians, non-government organizations and the international donors all around the world to provide its products within an affordable prices to its

Mergers should exhibit the following five characteristics in order to be considered potentially viable candidates for a successful merger:

New opportunities always exist in the healthcare industry, and Pfizer can be well-positioned to take advantage of these opportunities. It recently acquired Vicuron Pharmaceuticals which gave it instant access to that company's two major antibiotics. In addition, the company's pipeline includes inhalable insulin—likely to be a popular alternative to the injectable form. The company also continues to actively support its over-the-counter mouthwash—Listerine—classified as a "drug" because of its antiseptic properties (McTigue Pierce, 2005).

GSK is the 2nd largest pharmaceutical firm in the world, and the largest in the UK by sales and profits, it is responsible for 7% of the worlds pharmaceutical market, and has its stocks listed both in UK and US (O 'Rourke, 2002). The origin of the so called blockbuster model, is partly linked with Glaxo (as it was previously known). In the early 80’s, then Glaxo brought to light their first blockbuster drug, Zantac, which was an anti-ulcer drug, which was very similar to the a pre existing drug Tagamet (first ever blockbuster) sold by Smith Kline & French, their completion at the time (MONTALBAN and SAKINÇ, 2011). The introduction of this drug, brought about an increasing sales force in the US, the company soon became dependent on the drug, because it represented a large part of their profit. In 2002, 8 blockbusters of GSK contributed to $14.240 million sales revenue, taking up 53% of its total ethical sales (Froud et al 2006). However, due to the nature of the pharmaceutical industry, the patent began to expire, in other to avoid the patent cliff, Glaxo merged with Wellcome in 1995, which ensured a growing number of sales force, and with Beecham in 2000 (Froud et al., 2006) this merger, boosted the confidence of investors, by growing the business inorganically. For Big Pharma, this block buster model is very profitable, because with the high cost of R&D, the drugs are able to generate ample profit, to cover the sunk costs

This enabled numerous “me too” drugs to achieve satisfactory returns on investment. Imitating a known drug reduced R&D risk considerably, while the marketplace was open to products offering minor advantages such as a more convenient dosage with fewer side effects, but with much the same therapeutic outcome. Generics legislation had a major impact on the industry, providing incentives for innovation and a race to market. The time during which R&D costs could be recouped was drastically curtailed, putting upward pressure on prices. By the end of the 1970s generic entrants and more stringent controls on clinical trials had led to substantial increases in R&D spending.

In 2008, Johnson & Johnson was named the 3rd best performing stock on the Dow Jones Industrial Average. It has uniquely positioned itself to remain a leader in a competitive industry against the rapidly changing backdrop of healthcare. The company’s main competitors are Eli Lilly, Novartis and

There are two main operational strategic issues that Eli Lilly will face: the war on patents and the golden pipeline. These operational issues go hand in hand with each other. Taking a look at the golden pipeline, this an area that can either kill or bring a pharmaceutical company to stardom. There is a choice that pharmaceutical companies need to make: either create a different drug that is more effective for something that is already produced or create something new that has not been on the market before. Eli Lilly needs to strategically think of where they want to be and how their pipeline will align with their vision: “We will make a significant contribution to humanity by improving global health in the 21st century” (Eli Lilly About).

The pharmaceutical industry began in the early 1800’s when several chemical companies were founded in Philadelphia, marking the beginning of our current pharmaceutical manufacturing industry (Pfizer, 2008a). Founded in 1849, Pfizer has grown into a multibillion-dollar corporation by providing many of the highest quality drugs available today (Pfizer, 2007). However, many factors impact the continued success of Pfizer and the pharmaceutical industry in general. After reviewing these factors, it is our recommendation that Pfizer focus on short-term consolidation and long-term global expansion into emerging markets while focusing research and development efforts in the biotech sector.

This currently mean, that the companies have adopted a very risky way of growth since this strategy, as before mentioned, is about developing new products for new markets. This is risky due to lack of knowledge about markets and manufacturing. The ways in which the companies have pursued this strategy is by M&A’s, which only adds more risk, since many factors may affect the mergers & acquisition negatively. Furthermore did we find out that in general the pharmaceutical companies will more or less always work in risky environments, which are also those that generate the highest amounts of possible revenue, but also those that are in the highest risk for failure. Normally what is seen, as the highest failure in the pharmaceutical industry is the lack of FDA approval of pharmaceuticals, very few drugs are granted permission to be marketed each

growth trends in specialty. Such context is critical to answering this question: which are the areas that Pharma

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