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Pfizer re-entring to the OTC healthcare market
Pfizer Inc., the world’s largest pharmaceutical company, exited the over-the-counter (OTC) healthcare market in 2006 with the sale of its Consumer Healthcare division to Johnson & Johnson. Just 3 years later, in 2009, Pfizer re-entered the market with its acquisition of Wyeth. This article will examine the rise of Pfizer into a diversified healthcare company, the circumstances that led to the disposal of the Consumer Healthcare division, and the subsequent re-entry to the OTC market in 2009.
Pfizer, Inc. was originally founded as fine chemicals business. Following a series of product developments and M&A deals the company is now present in 180 countries around the world, and its portfolio includes human and animal biologic, small molecule medicines, vaccines, nutritional and consumer products.
The company’s first major acquisition was the hostile takeover of Warner–Lambert in 2000. A key driver of the acquisition of Warner-Lambert was the drug, Lipitor. Pfizer originally entered into a partnership with Warner-Lambert for the marketing of Lipitor. Lipitor became a blockbuster drug, with its launch being one of the most successful in the history of pharmaceuticals.
In 2006, Pfizer sold its Pfizer Consumer Healthcare business to Johnson & Johnson for $16.6 billion. This division of the business included the company’s OTC healthcare products and represented a departure from this market.
At the time of sale, Pfizer Chairman and Chief Executive Officer Hank McKinnell described the decision to sell the Consumer Healthcare division as being an “important step to create value for our shareholders while transforming our company”. He went on to describe how the strategy of the company had changed, with the plan being to focus on the core pharmaceutical business.
Following its departure from OTC Healthcare with the sale of its Consumer Healthcare division in 2006, just 3 years later Pfizer re-entered the market with its acquisition of Wyeth. The main reason for this shift back towards OTC healthcare has been the so-called “patent cliff”. The expiration of a large number of patents on blockbuster drugs has impacted the pharmaceuticals industry in recent years. Conversely, the OTC market has maintained steady growth.
Find this interesting. For more, check out MarketLine business case study Pfizer Inc: Re-entry to the OTC healthcare market. You may also check out our Buy Reports section for thousands of other company, industry & country analysis reports.