Emerging Business Models in the Pharmaceutical Industries ...

Introduction
Pfizer is the world's largest pharma
company with total sales of $45.1billion,
and $7.1 billion dedicated to research and
development in 2003. It has a total
workforce of more than 120,000
worldwide.
A research-based company, Pfizer
operates in three business segments -
pharmaceutical, consumer health care
and animal health.
The company also operates several other
businesses, including the manufacture of
empty soft-gelatin capsules, contract
manufacturing, bulk pharmaceutical
chemicals and diagnostics.
Revenues
Revenues increased by 12% to $32.4
billion in 2002. In 2003 revenues
increased by 40% to $45.2 billion primarily
due to the inclusion of Pharmacia
products and the strong performance of
newly launched products.
Pfizer Inc.
Profit margins declined in 2003 due to heavy merger and acquisition costs
and increased administrative and selling expenses.
Strategic Direction
Pfizer is growing inorganically through acquisitions by selecting products
that synergise with their product line. Dr. John LaMattina, president of Pfizer
Global Research and Development, described the three foundations on
which Pfizer's R&D strategy is based: increasing productivity, leveraging
scale, and adding value through collaborations, partnerships and
acquisitions.
50
40
30
20
10
-
Pfizer Inc.'s Five Year Financial Performance (billion US$)
1999 2000 2001 2002 2003
Source: Company’s Annual Reports
Strategic Analysis of the Pharma Market, Future Revenue Models and Key Players 58
40%
30%
20%
10%
0%
Revenues
Operating Profit
Profit Margin