Pfizer eyeing emerging markets in growth plan
fledgling pipeline and lowering its cost base and is planning to
increase globalisation and accelerate growth in emerging markets as
part of this.
The world's top drug firm announced plans to capture greater revenue in the emerging markets of Latin America, Eastern Europe and Asia, with a particular focus on penetrating "the growing and untapped market" of middle-income patients living in these markets. "We see a range of promising growth opportunities over the next three to five years where we will take advantage of our global scale," said Ian Read, president of Worldwide Pharmaceutical Operations. "By pursuing growth strategies in the right geographies, with the right products and business models, we will drive change and seize opportunities," he said. The company is particularly eyeing the $47bn emerging Asian pharmaceutical market and pointed to four drivers that it believes will help it enlarge its business in the region, including "expanding its existing presence in high growth markets, building leadership in oncology, tailoring portfolio offerings to local market needs and taking greater advantage of global manufacturing and R&D in Asia". As an example, Pfizer plans to expand its current operations in China six-fold, from the 110 cities it now serves to more than 650 cities. "Growing established products (medicines that have lost or will soon lose patent protection), launching new products and reaching more patients will enable Pfizer to continue to capitalize on its strong base in China", the firm said. The country is expected to be one of the world's top five healthcare markets as early as 2010. Through these plans, Pfizer said it expects to reinforce its market leadership and increase its market share in the Asia region by 2 per cent to reach 6 per cent by 2012. Moreover, the firm recently formed an Established Products business unit within its Worldwide Pharmaceutical Operations, with the goal of achieving double-digit growth in the global market for established medicines, through product enhancements and reformulations, pursuing new indications for niche markets, and intensifying late-stage lifecycle plans. Pfizer said that the newly formed unit will "execute growth strategies tailored to the unique needs of branded emerging markets (such as China, India, Brazil and Russia), branded traditional markets (such as Japan, Western Europe and South Korea), and intellectual-property-driven markets (such as the United States and Canada)". Meanwhile, the company is also intent on supplementing its internal R&D efforts with external science to help ensure a healthy pipeline. Through partnership arrangements, Pfizer added seven clinical candidates, including 4 biologics, in 2007 in prioritised disease areas. Pfizer's pipeline has been criticised from many quarters of late, with even the company's new president of global R&D previously stating: "I'm the first to admit [the drug pipeline] is not as rich as I'd like it to be." The firm has indicated that it will look to bolster its Asian R&D efforts in particular to tap into this burgeoning marketplace, targeting China, India, Japan and South Korea. "We are meaningfully diversifying our risk, which will be a significant advantage to us as we compete in this fast-changing marketplace", said Read. Meanwhile, company chief financial officer Frank D'Amelio reaffirmed that the firm is intent on creating a lower, more flexible cost base to align with revenues, through initiatives such as increasing outsourced manufacturing and further reducing its global real estate presence. "We are proactively managing our total cost structure to do what is necessary to size the company appropriately to align with our revenues so that we deliver growing profitability after the Lipitor loss of exclusivity," said D'Amelio. "As a result, we expect to continue to generate industry-leading operating margins in a percentage range of the mid-to high-30s."
