Pfizer announced Wednesday that it will organise the company into three businesses effective 2019, with units focusing on innovative drugs, established medicines and consumer healthcare. The company noted that the innovative medicines segment will now include biosimilars, as well as a new hospital business unit for anti-infectives and sterile injectables to focus on the "significant role" of hospitals in healthcare systems.
CEO Ian Read said the new structure is "a natural evolution…given the ongoing strength of our in-market products and our late-stage pipeline and the expected significant reduction in the impact of patent protection losses post-2020 following the loss of exclusivity for Lyrica in the US, which is expected to occur in or after December 2018." The executive noted "as we transition to a period post-2020 where we expect a higher and more sustained revenue growth profile we see this new structure better positioning each business to achieve its growth potential."
According to Pfizer, based on 2017 financial results, the innovative drugs business, including consumer healthcare, is expected to comprise approximately three-quarters of the company's revenues, while the established medicines unit will make up the remaining quarter. The drugmaker currently splits its business into innovative health, which includes consumer healthcare, and essential health, which includes biosimilars and sterile injectables.
The company indicated that the new established medicines unit will operate with "substantial autonomy." Pfizer said that the segment will have distinct and fully-dedicated manufacturing, marketing and regulatory functions.
Pfizer added that it continues to evaluate strategic alternatives for its consumer healthcare unit, with a decision expected this year. Earlier this year, the company indicated that it will decide whether to divest the unit after undertaking a strategic review of the business in 2017. In March, GlaxoSmithKline said it was withdrawing from the bidding process for the division after failing to reach an agreement on price, shortly after Reckitt Benckiser similarly exited the process.
Pfizer said that following the structural changes, John Young and Angela Hwang will lead the innovative medicines business, with the latter also overseeing the consumer healthcare unit. Meanwhile, the established medicines business will be led by Michael Goettler, who currently heads Pfizer's inflammation and immunology division.
The move comes the day after Pfizer announced that it will "defer" price increases on certain drugs that came into effect on July 1, following talks with US President Donald Trump. The company said that the recently raised prices will be rolled back to what they were prior to July 1 and will remain that way until Trump's blueprint to strengthen the healthcare system goes into effect or until the end of this year, "whichever is sooner."
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