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Pfizer Industry Review

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Pfizer Industry Review
Pfizer Corporation: 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.
Market Structure Since the 1950s, the global pharmaceutical industry has evolved from “…a collection of several hundred, small, barely profitable firms to as small group of large, highly profitable firms” (Younkin, 2008, para. 1). This evolution has resulted in an oligopoly market structure with a few large firms, and significant barriers to market entry. In the last 20 years, pharmaceutical consolidation has continued with both vertical and horizontal mergers that have further shrunk the market. Since 1995, Pfizer has merged with five pharmaceutical firms (Industry Brief, 2003) in an attempt to increase its research and development divisions and to offset declines in new product development; increases in generic competition; and the emergence of bio-pharmaceutical firms (BCC Research, 2004). Although pharmaceutical firms no longer view mega mergers as “…a cure-all for [their] innovation drought” (Simons, 2007, para. 1), this trend towards consolidation is expected to continue, with firms focusing “…on targeted acquisitions and alliances with smaller…more innovative drug makers and biotechs” (Simons, 2007, para. 10).
Competition
Competition is somewhat limited in oligopoly market structures due to the barriers to market entry. In the pharmaceutical industry,


References: BCC Research. (2004). World Pharmaceutical Market. Retrieved April 8, 2008, from http://www.marketwatch.com/news/story/pfizers-profit-plunges-generic-competition/story.aspx?guid=%7BFD4C07F3-9E1A-404E-BEA5-12E65CCD46A3%7D Business Week Congressional Budget Office. (1998). How increased competition from generic drugs has affected prices and returns in the pharmaceutical industry Danzon, P. (2007). Regulation of the pharmaceutical-biotechnology industry Global Pharmaceutical Industry. (2007). Barriers to entry in the global industry. Retrieved March 26, 2008 from http://www.duke.edu/web/soc142/team2/social.html#pfizer Kermani, Falz. (2006). The healthcare market in Columbia. Retrieved April 11, 2008 from http://jobs.leaddiscovery.co.uk/resourcearticles.aspx?rid=48&t=The%20healthcare%20market%20in%20Colombia Industry Brief: Pharmaceuticals Lawler, Brian. (2007). Looking Forward at Pfizer. Retrieved April 11, 2008, from http://www.fool.com/investing/value/2007/09/11/looking-forward-at-pfizer.aspx Martino, M Owens, J. (2007). Big pharma slims down to bolster productivity. Retrieved March 28, 2008, from http://www.nature.com/nrd/journal/v6/n3/full/nrd2284.html;jsessionid=183ADD340B66202AFB2CA4A9D50FF4ED Pfizer. (2008a). A pioneering spirit on the frontiers of medicine. Retrieved March 19, 2008, from: http://www.pfizer.com/about/history/timeline.jsphttp://www.pfizer.com/about/history/timeline.jsp. Pfizer. (2008b). Research and development at Pfizer. Retrieved April 6, 2008, from http://www.pfizer.com/research/ Pfizer Pfizer (2007). 2007 Annual review. Retrieved March 19, 2008, from: http://media.pfizer.com/files/annualreport/2007/annual/review2007.pdfhttp://media.pfizer.com/files/annualreport/2007/annual/review2007.pdf. Philipson, T. & Sun, E. (2008). Regulating the safety and efficacy of prescription drugs PR-inside. ( 2008). Pfizer presents new opportunities for global growth. Retrieved April 4, 2008, from http://www.pr-inside.com/pfizer-presents-new-opportunities-for-global-growth-r471732.htm Research and Markets Rubin, A. (2006). "Branded" Generic Drugs. Retrieved April 11, 2008, from http://www.therubins.com/legal/branded.htm Saul, S Shaw, A. ( March 2008). Direct-to-Consumer Advertising of Pharmaceuticals. Retrieved April 3, 2008, from http://www.csa.com/discoveryguides/direct/review3.php Simons, J Stat-A-Matrix. (n.d.) What is the FDA vision for pharmaceutical development and manufacturing in the 21st Century? Retrieved April 3, 2008, from http://www.statamatrix.com/pharmaceuticals/pharmfaq.php The Associated Press U.S. Environmental Protection Agency. (n.d.) Economic Analysis for Final Effluent Limitations Guidelines and Standards: Profile of the Pharmaceutical Industry. Retrieved April 10, 2008, from http://www.epa.gov/guide/pharm/econanal/econ-ch3.pdf U.S Younkin. (March 2008). Market: How the American pharmaceutical industry transformed itself during the 1940s. Retrieved April 6, 2008, from http://socrates.berkeley.edu/~iir/culture/papers/Younkin-Mar08.pdf
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