Another perspective on The Big Deal
January 30, 2009 – 9:06 am by Steven NilesBill Cooney of MedPoint Communications, another frequent contributor to Med Ad News, has shared with us some of his thoughts on Pfizer’s planned acquisition of Wyeth.
The Pfizer/Wyeth deal is not only a milestone on its own merits, but it’s even more important as the opening bell for an historic round of consolidation in the pharma-medical products industry. Past mega-mergers have been about enriched pipelines and market dominance. This deal is about cost-cutting and diversification outside of pharmaceuticals, two factors that will drive the next round of mergers. We’ve seen consolidation and cost-cutting ripple through the industry, but the next wave will be more like a tsunami, not only affecting drug and product developers, but also profoundly impacting vendors, payers, governments, the medical community and even patients.
The desire to diversify outside of pharmaceuticals is especially intriguing. Twenty years ago, companies like Monsanto and P&G wanted to reinvent themselves as pharma companies, while pharma companies (including Pfizer and Wyeth) were in a rush to shed their consumer and “non-core” medical businesses. Today, the big pharma companies believe that the only way to grow is to move into vaccines, biologics, devices, and OTC consumer products. It’s really a stunning reversal from the 80s and 90s when the prescription pill-and-tablet business was king.
