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The reasons for the success of pfizer inc industry

Company Perspectives The cycle of renewal drives everything we do at Pfizer. With several Pfizer medicines now coming to the end of their life cycles, we are doing what Pfizer people have done many times since our founding in 1849--build a new platform for extended growth.

Pfizer colleagues around the world are putting into place the next-generation Pfizer, one that will meet fast-changing needs in health and healthcare. We are working hard to both transform our business and to be partners in transforming healthcare itself. Our focus remains on our core business--innovation in the medicines that are integral to good healthcare. But our strategy goes further--to help create entire new directions in health and healthcare, exploring systems that start with the simple question: The company operates in three business segments: Pfizer is the company behind well-known consumer products such as Listerine, Rolaids, Sudafed, and Visine, but the company's greatest revenue producers are its prescription drugs.

Pfizer's marquee pharmaceuticals include Viagra, a treatment for erectile dysfunction, Zoloft, an antidepressant, and Lipitor, a cholesterol-lowering pharmaceutical that is the bestselling drug in the world. Pfizer's products are marketed in more than 150 countries. While producing iodine preparation and boric and tartaric acids, Pfizer pioneered the production of citric acid, a product Pfizer continues to market to soft drink companies, using large-scale fermentation technology.

By the end of the 19th century, Pfizer was producing a wide range of industrial and pharmacological products and had offices in New York and Chicago. While Pfizer technicians became experts in fermentation technology, across the ocean Sir Alexander Fleming made his historic discovery of penicillin in 1928. Recognizing penicillin's potential to revolutionize healthcare, scientists struggled for years to produce both a high quality and large quantity of the drug.

In a desperate attempt to solicit help from the community of American scientists, Dr. Because of its expertise in fermentation, the government approached Pfizer.

Jasper Kane from the company laboratory began his own experiments. Initially using large glass flasks, Dr. Kane's experimentation then led to deep-tank fermentation. Later, the company announced its entrance into large-scale production with the purchase of an old ice plant in Brooklyn.

Early production, however, was not without its difficulties. The first yields of penicillin required constant supervision, and yet quality and quantity remained low and inconsistent. In one of those inexplicable quirks of history, however, a government researcher browsing in a fruit market in Peoria, Illinois, discovered a variant of the reasons for the success of pfizer inc industry "Penicillium" mold on an overripe cantaloupe.

Using this variant, production suddenly increased from ten units per millimeter to 2,000 units per millimeter. Mass production began in 1944, when Pfizer penicillin arrived with the Allied forces on the beaches of Normandy on D-Day. Meantime, in June 1942, Pfizer reincorporated in Delaware and went public with an offering of 240,000 shares of common stock.

  • Moreover, Lear used the Pfizer ad to underscore and criticize what he saw as a trend toward the overprescription of antibiotics, exaggerated claims on drug effects, and concealment of possible side effects;
  • Pfizer and Erhart achieved immediate success with their first product, a flavourful form of santonin—an anthelmintic drug used to treat intestinal worms, a common affliction in the mid-1800s.

Even as the government controlled production of the drug for the sole use of the Armed Forces, the public, aroused by miraculous results of penicillin, asked Pfizer to release the drug domestically. In 1943 John L. Smith, Pfizer president, and John McKeen, against the explicit regulations of the federal government, supplied penicillin to a doctor at the Brooklyn Jewish Hospital. The reasons for the success of pfizer inc industry Lowe administered what was thought of as massive dosages of penicillin to several patients and cured, among others, a child suffering from an acute bacterial infection and a paralyzed and comatose woman.

Smith and McKeen, visiting the hospital on Saturdays and Sundays, were witness to penicillin's curative effects on the patients. Postwar Expansion for Pfizer: Terramycin and Beyond Nevertheless, it was not until the end of the war when the federal government realized its mistake in restricting production of the drug. In 1946 Pfizer purchased Groton Victory Yard, a World War II shipyard, in order to renovate it for mass production of the new publicly accessible medicine.

This marked Pfizer's first official entrance into the manufacturing of pharmaceuticals. In a few years the five-story building, equipped with 10,000 gallon tanks, produced enough penicillin to supply 85 percent of the national market and 50 percent of the world market. Competition from 20 other companies manufacturing penicillin soon resulted in severe price reductions. Furthermore, although the company could boast ownership of fermentation tanks "exceeded in size only by those in the beer industry," Pfizer's bulk chemical business decreased as former customers began establishing production facilities of their own.

Pfizer's instrumental role in developing antibiotics proved beneficial to society, but a poor business venture. All this was to change drastically under the new direction of President John McKeen.

In 1949 McKeen, whose career at Pfizer began the day after he graduated from the Brooklyn Polytechnic Institute in 1926, was elevated to president and, later, chair of the company.

Already responsible for increasing sales by an impressive 800 percent between 1939 and 1950, McKeen's business acumen became even more evident during the marketing campaign for Terramycin, which was launched in 1950. In the postwar years, pharmaceutical companies searched for new broad-spectrum antibiotics useful in the treatment of a wide number of bacterial infections.

Penicillin and streptomycin, while helping to expand the frontier of medical knowledge, actually offered a cure for only a limited number of infections. Pfizer's breakthrough came with the discovery of oxytetracycline, a broad-range antibiotic that soon would prove effective against some 100 diseases.

The drug's remarkable capture of a sizable portion of the market was not due entirely to its inherent curative powers. Rather, it was McKeen's ability to promote the new drug that actually propelled Pfizer into the ranks of top industry competitors. McKeen's first accomplishment was the timely decision to market the antibiotic under a Pfizer trademark.

Thus Terramycin, the drug's chosen name, launched Pfizer into its first ethical drug campaign. Lacking the resources other pharmaceutical companies had to promote their drugs, McKeen announced the "Pfizer blitz," whereby the company's small sales force used an unusual array of marketing strategies.

For the first time, the company circumvented traditional drug distributing companies and began selling Terramycin directly to hospitals and retailers. Pfizer's minuscule retail force pharmaceutical salespeople would target one small region at a time and promote their product to every accessible healthcare professional.

The sales force left generous samples of the drug at every sales call, sponsored golf tournaments, and ran noisy hospitality suites at conventions. Surprised at the success of this tiny band of salespeople, which eventually would grow into a 4,000-person army, industry competitors reluctantly increased their own sales forces and, similarly, began promoting their products directly to physicians.

Taking the calculated risks of insulting the entire medical community, Pfizer ran lavish advertisements in the conservative Journal of the American Medical Association. The ad was greeted with a large degree of reservation and threatened the drug industry's abhorrence of "hard sell" marketing.

Yet problems with the company's advertising strategy were to surface soon. In 1957, while promoting a new antibiotic called Sigmamycin, a Pfizer advertisement used the professional cards of eight physicians to endorse the drug. John Lear, science editor of the Saturday Review, denounced this advertisement in a scathing attack.

Not only were the names of the eight physicians fictitious, Lear claimed, but the code of Pharmaceutical Manufacturers Association prohibited soliciting endorsements from physicians. Moreover, Lear used the Pfizer ad to underscore and criticize what he saw as a trend toward the overprescription of antibiotics, exaggerated claims on drug effects, and concealment of possible side effects. Pfizer was quick to defend their advertisement. While defending the drug and the clinical reports supporting the drug's efficacy, Pfizer admitted that the business cards were purely symbolic and, therefore, fictitious and, as a result, may have been misleading.

The company accordingly changed the campaign.

Pfizer, Inc.

John Lear's final attack on Pfizer expressed an unspoken industry complaint. Not only was it disturbing that such "hard sell" tactics should actually prove successful, but so was Pfizer's status in the industry; as the company's recent past was in bulk chemical production, it was a relative newcomer to the industry of ethical drugs.

Lear argued that the young company should have shown respect for the industry's formal and restrained method of conducting business. Pfizer, however, was not intimidated by the industry's attitude toward its advertising campaign; it was interested in claiming and maintaining a share of the market.

If it meant breaking tradition, it was clear Pfizer was not going to hesitate. Aside from its modern marketing campaigns, Pfizer was very successful at developing a diversified line of pharmaceuticals.

Company History Index

Whereas many companies concentrated their efforts on developing innovative drugs, Pfizer generously borrowed research from its competitors and released variants of these drugs.

Although all companies participated in this process of "molecular manipulation," whereby a slight variance is produced in a given molecule to develop greater potency and decreased side effects in a drug, Pfizer was particularly adept at developing these drugs and aggressively seizing a share of the market. Thus the company was able to reduce its dependence on sales of antibiotics by releasing a variety of other pharmaceuticals.

At the same time The reasons for the success of pfizer inc industry domestic sales increased dramatically, the company was quietly improving its presence on the foreign market. Under the methodical directive of John J. It would be years before any competitor came close to commanding a similar share of the foreign market. By 1980 Pfizer was one of only two U. Pfizer's crowning success to its unorthodox business procedures involved McKeen's quest for diversification through acquisition.

McKeen defended this diversification strategy by claiming that prodigious growth had decreased overall profits while competitors, on the other hand, had neither grown nor profited from their conservative investments. Obviously, sales would not come from new pharmaceuticals, but from the company's accelerated rate of acquisitions.

McKeen never actually saw the company reach this goal during his presidency. For the next seven years Powers continued to preside over the company's comfortable profits and sizable growth.

In the absence of McKeen's style of conducting business, Powers directed Pfizer toward the more conservative and methodical approach of manufacturing and marketing pharmaceuticals.

Powers also guided the company in a new direction the reasons for the success of pfizer inc industry an increased emphasis on research and development. With increased funds allocated for research in the laboratories, Pfizer joined the ranks of other pharmaceutical companies searching for the innovative and, therefore, profitmaking, drugs. In the early 1970s Edmund Pratt, Jr. Increased oil prices caused comparable increases in prices for raw materials; low incidents of respiratory infections slowed sales for antibiotics; and even a cool summer in Europe reduced demands for soft drinks and, consequently, the need for Pfizer citric acids.

All of these factors contributed to the company's slow rate of growth. In light of this, the two new top executives significantly changed company strategy. Second, Pfizer began a comprehensive licensing program with foreign pharmaceutical companies to pay royalties in exchange for marketing rights on newly developed drugs.

This represented a noticeable change from the years Powers supervised international operations. Under his directive, Pfizer chose to market its own drugs on the foreign market and establish joint ventures or partnerships only if no other option was available.

The two new drugs--one called Procardia, a treatment for angina licensed from Bayer AG in Germany for its exclusive sale in the United States, and the other called Cefobid, an antibiotic licensed from a Japanese pharmaceutical company--promised to be highly profitable items.

Furthermore, drugs discovered from Pfizer's own research resulted in large profits. Pratt, in a final move to shed Pfizer of its former idiosyncracies, began selling some of its more unprofitable acquisitions. Interestingly, one Pfizer product acquired through a company acquisition in the 1960s experienced a market rediscovery during the 1980s. Ben Gay, a well established liniment marketed for relief of arthritis pains through the late 1970s, found new patrons in the health-conscious 1980s.

Discovering that sales for Ben Gay were increasing when marketed as a fitness aid, Pfizer began an advertising campaign by employing athletic superstars to endorse the drug. By 1989, Pfizer operated businesses in more than 140 countries.