GSK and Pfizer JV creates ‘global leader in OTC products’

By Flora Southey

- Last updated on GMT

(Image: Getty/metamorworks)
(Image: Getty/metamorworks)

Related tags Pfizer Gsk OTC

Pfizer and GSK will combine their consumer healthcare companies in a joint venture – creating an OTC portfolio with 7.3% global market share.

With an equity split of 32% Pfizer and 68% GlaxoSmithKline (GSK), the pharma giants have announced plans to create a joint venture (JV) under the GSK Consumer Healthcare name.

Per the agreement, Pfizer is entitled to a 32% share of the JV’s earnings and dividends each quarter.

The business, which is set to become the largest in global consumer healthcare, aims to be a leader in pain relief, respiratory, and therapeutic oral health, among other categories. Well-known brands to be sold under the JV include GSK’s Voltaren and Panadol, and Pfizer’s Advil, Nexium 24HR and Robitussin.

According to GSK, the JV “will be the global leader in over-the-counter (OTC) products with a market share of 7.3% ahead of its nearest competitor at 4.1%”. ​In addition, it represents “a compelling opportunity” ​to build on GSK’s buyout of Novartis’ 36.5% stake in a consumer healthcare JV in March of this year​, said the UK-headquartered firm.

The numbers


  • GSK’s consumer healthcare business recorded revenues of approx. $9.2bn (€8bn) for the year ended December 31, 2017.
  • If approved, the JV is expected to generate total annual cost savings of £5m (€6.3bn) by 2022 for expected total cash costs of £9m and non-cash charges of £3bn.
  • Up to 25% of the cost savings to be reinvested in the business.


  • Pfizer’s consumer healthcare business recorded global revenues of approx. $3.5bn for the year ended December 31, 2017.
  • Pfizer anticipates deconsolidating its healthcare business from financial statements, which it predicts will have a ‘slight impact’ on operating margins over several years.

GSK’s two business strategy

According to GSK, the JV “lays [the] foundation…to create two new UK-based global companies”​: one focused on pharmaceuticals and vaccines, and the other, consumer healthcare.

To achieve this, GSK intends to separate the JV​ as an independent company – within three years of closing the transaction – via a demerger of its equity interest to its shareholders and listing the firm on the UK equity market.

“With our future intention to separate, the transaction also presents a clear pathway forward for GSK to create a new global pharmaceuticals/vaccines company, with an R&D approach focused on science related to the immune system, use of genetics and advanced technologies, and a new world-leading consumer healthcare company,” ​explained GSK CEO Emma Walmsley, who will also head up the JV, in a statement.

Second time lucky?

This is not the first time GSK has shown interest in Pfizer’s OTC portfolio. Earlier this year​, GSK investigated acquiring Pfizer’s OTC business, but announced it was stepping away from the reported $20bn (€16bn) deal in March.

At the time, Pfizer said it would continue to look at potential alternatives for the business – which it appears to have found via the JV with GSK.

Pfizer reshuffle

The JV marks Pfizer’s latest restructure for the year, following its decision​ to split the business into three units: innovative medicines, established medicines, and consumer healthcare; and to reduce its workforce​ by 2%.

In another internal rejig, the pharma giant will welcome a new CEO as of January 2019. After eight years in the job, CEO Ian Read​ is stepping down and will be replaced by Pfizer’s COO, Albert Bourla​.

Related news

Show more