Pfizer, Inc., is one of the world’s leading biopharmaceutical companies whose portfolio includes medicines, vaccines, and consumer healthcare products. During the last decade, the company has been focused to strengthen their global position in branded prescription drugs through internal restructuring and divestments. Similarly, Mylan NV, is a global giant that has a strong geographic presence across 165 countries and offers generics and specialty products. The company has witnessed reduced revenue in 2018 due to supply constraints in US for EpiPen, intense market competition due to alternatives, and manufacturing bottlenecks.
In July 2019, Pfizer acquired Mylan and announced to merge its generics business with Mylan to form an independent company based in Delaware (US) and dealing with off-patent drugs. The newly formed entity is poised to be the largest generic drug manufacturer globally with geographic presence across 165 countries and expected to realize a revenue of USD 20 billion in 2020. This initiative is expected to be mutually beneficial for both the companies as Pfizer is expected to lose patient coverage of its Major brands – Lipitor and Viagra by 2025; whereas, Mylan has been reeling under stringent US regulatory framework as well as pricing pressure across major markets.
MnM VIEWPOINT
According to T V R UPENDRA, Senior Associate, Healthcare Research at MarketsandMarkets™
The Pfizer-Mylan merger is expected to further contribute to the ongoing industry consolidation so as to stay competitive in increasingly regulated pharmaceutical industry with significant pricing pressure. This development is expected to result in greater accessibility to affordable generic drugs across the globe, improved product pricing, and streamlined distribution networks. Moreover, Pfizer is now strategically placed to further strengthen its global position in patented drugs businesses (such as cancer drugs and biosimilars) with a stronger research capabilities, geographically diverse manufacturing presence, and higher profit margins. Also, the company would be able to further integrate its previous acquisitions (such as Medivation, Inc. and Anacor Pharmaceuticals) thereby effectively utilizing their core capabilities.
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