Pfizer rejiggers business units
- Pfizer announced Wednesday it will reorganize the sprawling company into three distinct business units: Innovative Medicines, Established Products and Consumer Health.
- Innovative Medicines will include its current Innovative Health business, as well as its biosimilars and a new Hospital Medicines unit. It will be run by John Young and Angela Hwang.
- The Established Medicines business will include Pfizer's oral solid dose drugs that are off-patent, including Lyrica, Lipitor, Norvasc and Viagra, as well as other generics.
Pfizer is calling its latest reorganization "a natural evolution of these businesses." But the new structure doesn't necessarily change much for the big pharma. The company established its Innovative Health and Established Products business units in 2008.
While leadership of those business units has changed over the last ten years, the types of products that each unit sells haven't evolved dramatically. The blockbuster fibromyalgia drug Lyrica (pregabalin) will shift to the Established Medicines business as it faces a loss of exclusivity in the U.S. in December, and biosimilars will shift to the oncology and inflammatory portfolios, depending on what type of branded product they reference. The new Hospital Medicines unit will comprise Pfizer's anti-infectives and sterile injectables, most of which it picked up in the acquisition of Hospira in 2015.
Each of the three new business units will have their own unique manufacturing, marketing and regulatory units, allowing them to operate with more autonomy.
Pfizer emphasized in its statement that the Established Medicines business is a global unit, but will have a strong foothold in Asia.
The company also noted it will continue to explore strategic options for the Consumer Health business. Pfizer announced last October it was looking to sell this unit as it no longer fit within the strategic focus of the company. Despite some reported interest from GlaxoSmithKline (which instead bought the remainder of its consumer venture with Novartis), Pfizer has had little luck in offloading the segment. The new structure, though, could make it easier for the New York-based pharma to offload or spin out the business should the time come. Pfizer is expected to make a decision on this before the end of the year.
The current move is similar to one Pfizer made in 2013, when it separated its commercial operations into innovative and value segments, in the hopes of better aligning each unit with its respective business proposition.
The new structure is not expected to effect Pfizer's capital allocation plans and will be implemented as of the 2019 fiscal year.
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