Transcript Document
Tyrannosaurus Rx Sabrina George Sheliah Vink Katherine King Company Profile Pfizer/Merck Pfizer Research-based Technologyintensive products Three business segments Merck Global researchdriven Broad range of products Benefit services Market Info on Pfizer Trading at 43 3/16 Market Capital is $272,674.02 million 59.7% of shares held by institutions Market Info on Merck Trading at 89 15/16 Market Capital $206,904.38 million 53.8% of shares held by institutions Net Income Pfizer $3,179 million (1999) Merck $5,891 million (1999) Pfizer vs. Merck “Two of the world’s drug titans are facing off in a war for dominance -and their strategies couldn’t be more different. In the end, the presidential election may decide who wins.” Fortune Magazine Lee Clifford Pfizer American Home Products / Warner Lambert situation Overbid AHP by more than $10 billion “Partner of Choice” Pfizer earned this nickname by promoting drugs for smaller companies “Predator Of Choice” o Pfizer earned this new nickname after the merger with WarnerLambert Merck’s Medco Subsidiary • More than 370 million products delivered yearly • On-line pharmacy business Merck-Medco Contracts from unions, corporations, insurance carriers, and HMO’s Three $80 million high-tech pharmacies Medco’s Training o Sensitivity training for service reps includes cotton stuffed in ears, gloves and vaseline on glasses. Strategies Pfizer’s Strategy “Free-spending, free marketer” Unregulated healthcare environment Merck’s Strategy Getting deeper into managed care Medicare reform “far-reaching inescapable HMO” Who Will Dominate? Pfizer’s Competitive Edge “Marketing machine” 20,000 sales reps Spends 39% of revenue on sales and marketing Merck’s Competitive Edge Embracing managed care o Concern for uncovered seniors o o Employee amenities. Making A Deal With The Devil Irked independent pharmacists Limited distribution of Fosamax An equity stake in CVS ProCare Medco’s Your Plan program Merck’s View Controlling the means of distribution would be a critical advantage in an environment more hostile to profits. Pfizer’s View “Pfizer is clearly betting that the medical environment doesn’t change that much-that people will continue to pay up for drugs.” Sales Force Pfizer’s Sales Force o 20,000 sales reps o Each rep averages 459 visits to doctors o Very aggressive approach Merck’s Sales Force 11,000 sales reps Salespeople are “collegial,” “responsible,” and “less aggressive” Political Effects Bush Administration Pfizer benefits Merck suffers Gore Administration Merck profits Pfizer takes a dive Conclusion Which one is better? Based on election Our vote is for Merck Thank You! Don’t forget to vote