As per the Fortune 2003 Global rankings, the top five pharmaceutical
companies (in terms of revenue in 2002) are:
1. Merck & Co. (USD 51,790.3 million)
2. Johnson & Johnson (USD 36,298 million)
3. Pfizer, Inc. (USD 32,373 million)
4. GlaxoSmithKline, plc (USD 31,819 million)
5. Bristol-Myers Squibb Co. (USD 21,717.0 million)
I am providing the required information in the following sections. The
sections are arranged by company. For each section, the information is
organized in the following manner:
1. Corporate profile
2. Corporate philosophy
3. Senior management team
4. Top selling drugs
5. Industry analysis (optional)
6. Competition analysis (optional)
7. Challenges (optional)
8. Marketing approaches (optional)
9. Internal communications (optional)
10. Additional information (optional)
The optional tag indicates that information is provided wherever
available. However, all these topics have been covered in general (if
not for a specific firm) in this report.
1.1 Corporate profile
With 2002 revenues of around USD 52 billion, Merck & Co., Inc.
reinforced its status as a leading research-driven pharmaceutical
products and services company. Merck discovers, develops, manufactures
and markets a broad range of innovative products to improve human and
animal health, directly and through its joint ventures.
Merck's operations are principally managed on a products and services
basis and are comprised of two reportable segments:
- Merck Pharmaceutical
- Medco Health Solutions, Inc.
Merck Pharmaceutical products consist of therapeutic agents, sold by
prescription, for the treatment of human disorders. Medco Health
consist principally of sales of prescription drugs through managed
prescription drug programs, either from its home delivery pharmacies
or its network of contractually affiliated retail pharmacies, as well
as services provided through programs to help its clients control the
cost and enhance the quality of the prescription drug benefits offered
to their members. Medco Health contributes close to 50% of Merck's
Merck holds eight research centers in United States, Europe, and Japan
and it has 31 plants dedicated to chemical processing, drug
formulation, and packaging operations in United States, Europe,
Central and South America, the Far East, and the Pacific Rim. Its
products are sold in the United States, Europe, Central and South
America, the Middle East, the Far East, and the Pacific Rim.
Drugs dealing with cholesterol, hypertension, and heart failure make
up one-third of its sales. Its highest sellers are cholesterol drugs
Zocor and Mevacor, and hypertension drugs Vasotec and Prinivil
1.2 Corporate philosophy
When George W. Merck came to the United States in 1891, he brought his
philosophy: "We try never to forget that medicine is for the people.
It is not for the profits. The profits follow, and if we have
remembered that, they have never failed to appear."
Merck's mission and corporate values are listed below.
The mission of Merck is to provide society with superior products and
services by developing innovations and solutions that improve the
quality of life and satisfy customer needs, and to provide employees
with meaningful work and advancement opportunities, and investors with
a superior rate of return.
- Our business is preserving and improving human life. All of our
actions must be measured by our success in achieving this goal. We
value, above all, our ability to serve everyone who can benefit from
the appropriate use of our products and services, thereby providing
lasting consumer satisfaction.
- We are committed to the highest standards of ethics and integrity.
We are responsible to our customers, to Merck employees and their
families, to the environments we inhabit, and to the societies we
serve worldwide. In discharging our responsibilities, we do not take
professional or ethical shortcuts. Our interactions with all segments
of society must reflect the high standards we profess.
- We are dedicated to the highest level of scientific excellence and
commit our research to improving human and animal health and the
quality of life. We strive to identify the most critical needs of
consumers and customers, and we devote our resources to meeting those
- We expect profits, but only from work that satisfies customer needs
and benefits humanity. Our ability to meet our responsibilities
depends on maintaining a financial position that invites investment in
leading-edge research and that makes possible effective delivery of
- We recognize that the ability to excel -- to most competitively meet
society's and customers' needs -- depends on the integrity, knowledge,
imagination, skill, diversity and teamwork of our employees, and we
value these qualities most highly. To this end, we strive to create an
environment of mutual respect, encouragement and teamwork -- an
environment that rewards commitment and performance and is responsive
to the needs of our employees and their families.
1.3 Senior management team
Raymond V. Gilmartin - chairman, president, chief executive officer
David W. Anstice - president, Human Health
Marcia J. Avedon - senior vice president, Human Resources
Kenneth C. Frazier - senior vice president, general counsel
Peter S. Kim, Ph.D. - president, Merck Research Laboratories (MRL)
Judy C. Lewent - executive vice president, chief financial officer and
president, Human Health Asia
Adel A. F. Mahmoud, M.D., Ph.D. - president, Merck Vaccines
Margaret G. McGlynn - president, U.S. Human Health
Bradley T. Sheares, Ph.D. - president, U.S. Human Health
Per Wold-Olsen - president, Human Health - Europe, Middle East, Africa
Paul R. Bell - president, Human Health - Asia Pacific
Edward M. Scolnick, M.D. - executive vice president, science and
Bernard J. Kelley - Merck Manufacturing Division
1.4 Top selling drugs
The following table lists the top selling Merck drugs in 2002. These
account for two-thirds of worldwide human health representing a growth
of 1% over 2001 sales.
Drug Indication $ (bn)
Zocor cholesterol $5.6
Vioxx osteoarthritis/ acute pain $2.5
Cozaar/Hyzaar high blood pressure $2.2
Fosamax postmenopausal osteoporosis $2.2
Singulair sthma $1.5
1.5 Industry analysis
1.6 Competition analysis
Merck is operating in markets that are highly competitive and often
highly regulated. Global efforts toward health care cost containment
continue to exert pressure on product pricing and access. In the
United States, the Company has been working with private and
government employers to slow the increase of health care costs.
Outside the United States, in difficult environments encumbered by
government cost containment actions, the Company has worked with
payers to help them allocate scarce resources to optimize health care
outcomes, limiting the potentially detrimental effects of government
actions on sales growth. Increasing focus on privacy issues in the US
have affected the Companys operations, particularly at Medco Health.
Merck anticipates that the worldwide trend toward cost-containment
will continue, resulting in ongoing pressures on health care budgets.
To become a top-tier growth company, Merck has adopted the following
- Discover important new medicines through breakthrough research
- Demonstrate the value of its medicines to patients, payers and
For this, Merck has focussed on its priorities of turning cutting-edge
science into breakthrough medicines, supporting them through targeted
and well-executed marketing, and improving operational efficiency. In
addition, its efforts will also include a continuing, intense focus on
product licensing as well as targeted acquisitions.
In the past decade, Merck has been faced with two major changes caused
by external forces:
- Mergers of other large pharmaceutical companies have caused an
increase in competition
- Growing managed care business has brought about changes in political
and regulatory issues.
One of the largest challenges that Merck faced was the U.S. Healthcare
Reform and the threat of pharmaceutical price controls. In a
proactive response to this potential problem, Merck acquired the
pharmaceutical distribution company, Medco, in 1993 in hopes of
purchasing its way into the distribution channels of the
pharmaceutical industry. They felt that by obtaining some control of
product distribution, they would be in a better position to face the
threat posed by managed care and the healthcare reform. However, this
acquisition limited the company's ability to negotiate contracts with
other competitive manufacturers.
In an attempt to compete with other companies, Merck also began
manufacturing its own generic drugs. Their strategy was to create
cheaper drugs so that if patients chose not to use the name brand drug
for various reasons, Merck would still be able to obtain their
business. However, by creating generic drugs, they were competing with
themselves. Instead of focusing on their main products and stressing
the benefits these products offered, they suggested that their
products could be manufactured at a lower cost and perform the same
function. It did not take very long for Merck to realize they had
made a mistake, and they have since ceased manufacturing generic
Merck has recently also faced more critical patent expirations than
other pharmaceutical companies. Its HIV drug - Prinivil - expired in
2002. In 2001, the company lost patent protection for three drugs -
Prilosec Mevacor and Vaseretic. In 2000, it lost Vasotec and Pepcid.
So how did Merck go about replacing these drugs and their diminishing
revenues? It planned on making a splash with a pair of new drugs -
Cancidas (antifungal) and Invanz (antibiotic) - as well as boosting
sale for its COX-2 inhibitor, Vioxx. Merck had reason to be optimistic
- it was in the midst of the most successful period in its history,
with 17 new drugs introduced since 1995.
In addition to Invanz and Cancidas, the company was also hoping to
receive FDA approvals for the following druges:
- Zetia, a cholesterol drug co-developed with Schering-Plough
- Singulair, a treatment for allergic rhinitis.
In order to market these drugs, and enhance the positions of existing
franchises, Merck added more than 1,000 sales reps in 2001, with plans
to add 500 more in 2002.
However, the past year was not kind to Merck:
- The entire COX-2 class of drugs produced lower-than-expected
revenues as questions began to arise about possible cardiovascular
- In January 2002 Merck announced that it will spin off its
Merck-Medco pharmaceutical benefits management (PBM) business which
had clocked revenues of $26.4 billion the last year (while its
Internet division became the fist e-PBM to reach $1.0 billion in
- In May 2002, the company announced that it was withdrawing the NDA
for Arcoxia, its next-generation COX-2 drug. Arcoxia was already
approved in the UK and is prescribed there for a number of
Merck has stuck to its strategy and avoided Big Pharma mergers. Its
main acquisition in 2001 was Rosetta Inpharmatics, an informational
genomics company to enhance both basic discovery and preclinical
1.8 Marketing approaches
Today's complex global health care environment calls for innovative
delivery systems. To meet the challenge, Merck has built a powerful
global marketing organization that is adept at both launching new
products and strongly supporting them after launch. That means keeping
ahead of the competition and constantly adapting to shifting health
care environments around the world without losing focus or lowering
Merck is increasingly using new Internet technology while expanding
its medical education initiatives. It is expanding the potential of
the Internet to facilitate business-to-business and customer service
transactions - and to increase Merck's "connectedness" to physicians,
clients and consumers. One outstanding example on the use of such
technology to aid customers comes from the Merck Vaccine Division,
which has launched several Web sites to disseminate information and
market products to health care providers. The most prominent of these
is www.vaccinesbynet.com. Many U.S. clients already have registered on
the site and a growing number use it to buy vaccines from Merck.
Another important factor contributing to Merck's ongoing success is
Merck-Medco, which manages pharmaceutical benefits for 65 million
people. Merck-Medco leverages information technology to improve
services and efficiency with relevant, personalized tools and
information for our key customers: members, physicians, retail
pharmacists and plan sponsors. It has put in place state-of-the-art
technology to electronically review millions of prescriptions, with
opportunities to improve care and control costs. It uses this
technology to link patients, physicians and pharmacists to improve the
quality of care and reduce overall health costs.
Merck's evidence-based approach to marketing is aimed at forging
strong links between the marketers and scientists. Better
understanding between the two helps during both the development phases
of drugs and their post-launch periods. The purpose of the
post-marketing trials is to establish additional uses for drugs
already on the market. Such trials are underway to broaden markets for
each of our five key drivers.
Merck also began using the direct-to-consumer (DTC) marketing approach
with some of its products. Although not all physicians are in favor
of DTC marketing, Merck has found that if physicians are prepared and
have had an opportunity to establish a confidence in the product
before the DTC advertising occurs, it can prove to be a beneficial
marketing technique in the industry.
In the latest move, Merck has selected Dendrite's
(http://www.dendrite.com) custom-designed (and programmed) PDA-driven
sales force automation application for in-house sales management
Marketing and administrative expenses decreased 1% in total and 4% on
a volume basis in 2002. Marketing and administrative spending reflects
the impact of sales force expansions and launch costs in support of
new product introductions and new indications, as well as savings from
operational-efficiency and work redesign initiatives which reduced the
companys overall cost structure. Marketing and administrative
expenses for 2003 are estimated to grow at a mid-single digit
percentage rate over the full-year 2002 expense. In 2001, marketing
and administrative expenses increased 1% in total and were essentially
level with 2000 on a volume basis, including a one point decrease
attributable to marketing expenses, reflecting the success of
operational efficiency initiatives and increased resource commitment
to Mercks five key growth drivers. Marketing and administrative
expenses as a percentage of sales were 12% in 2002, 13% in 2001 and
15% in 2000. The continuous improvement in the ratios over 2000
primarily reflects the lower growth of marketing and administrative
costs relative to Medco Healths sales growth and the sustained impact
of operational efficiency initiatives.
1.9 Internal communications
1.10 Additional information
Merck is discovering new innovative products and developing new
indications for existing productsthe result of its continuing
commitment to research. To enhance its product portfolio, it continues
to pursue external alliances, from early-stage to late-stage product
opportunities, including joint ventures and targeted acquisitions.
Additionally, achievement of productivity gains has become a permanent
strategy. Productivity initiatives include, at the manufacturing
level, optimizing plant utilization, implementing lowest-cost
processes and improving technology transfer between research and
manufacturing, and throughout the company, reducing the cost of
purchased materials and services, re-engineering core and
administrative processes and streamlining the organization. At the
manufacturing level, the company expects that productivity gains will
continue to substantially offset inflation on product cost in the core
2. Johnson & Johnson
2.1 Corporate profile
Johnson & Johnson is the world's most comprehensive and broadly based
manufacturer of health care products, as well as a provider of related
services. It has three business segments:
- Medical devices and diagnostics
JNJ has approximately 108,300 employees and more than 200 operating
companies in 54 countries around the world, selling products in more
than 175 countries.
2.2 Corporate philosophy
Johnson & Johnson has developed a Credo that is at the foundation of
its corporate philosophy. There is no forml mission statement.
- We believe our first responsibility is to the doctors, nurses and
patients, to mothers and fathers and all others who use our products
and services. In meeting their needs everything we do must be of high
quality. We must constantly strive to reduce our costs in order to
maintain reasonable prices. Customers' orders must be serviced
promptly and accurately. Our suppliers and distributors must have an
opportunity to make a fair profit.
- We are responsible to our employees, the men and women who work with
us throughout the world. Everyone must be considered as an individual.
We must respect their dignity and recognize their merit. They must
have a sense of security in their jobs. Compensation must be fair and
adequate, and working conditions clean, orderly and safe. We must be
mindful of ways to help our employees fulfill their family
responsibilities. Employees must feel free to make suggestions and
complaints. There must be equal opportunity for employment,
development and advancement for those qualified. We must provide
competent management, and their actions must be just and ethical.
- We are responsible to the communities in which we live and work and
to the world community as well. We must be good citizens - support
good works and charities and bear our fair share of taxes. We must
encourage civic improvements and better health and education. We must
maintain in good order the property we are privileged to use,
protecting the environment and natural resources.
- Our final responsibility is to our stockholders. Business must make
a sound profit. We must experiment with new ideas.
Research must be carried on, innovative programs developed and
mistakes paid for. New equipment must be purchased, new facilities
provided and new products launched. Reserves must be created to
provide for adverse times. When we operate according to these
principles, the stockholders should realize a fair return.
2.3 Senior management team
JNJ is organized on the principles of decentralized management. The
Executive Committee of Johnson & Johnson is the principal management
group responsible for the operations of JNJ. In addition, certain
Executive Committee members serve as Worldwide Chairmen of Group
Operating Committees, which are comprised of managers who represent
key operations within the group, as well as management expertise in
other specialized functions. These Committees oversee and coordinate
the activities of domestic and international companies related to each
of the Consumer, Pharmaceutical and Professional segments of business.
Operating management of each company is headed by a Chairman,
President, General Manager or Managing Director who reports directly
to, or through a line executive to, a Group Operating Committee. In
line with this policy of decentralization, each international
subsidiary is, with some exceptions, managed by citizens of the
country where it is located.
2.3.1 Corporate officers
William C. Weldon - chairman, board of directors, and chief executive
officer, chairman executive committee
James T. Lenehan - vice chairman, board of directors, and president
Robert N. Wilson - senior vice chairman, board of directors, vice
chairman executive committee
J. Andrea Alstrup - vice president, advertising
Michael J. Carey - vice president, human resources
Stephen J. Cosgrove - corporate controller
Robert J. Darretta - executive vice president, finance and information
management, and chief financial officer executive committee
Russell C. Deyo - vice president, administration executive committee
Michael J. Dormer - worldwide chairman, medical devices executive
Roger S. Fine - vice president, general counsel executive committee
Colleen A. Goggins - worldwide chairman, consumer & personal care
group executive committee
Thomas M. Gorrie, Ph.D. - vice president, government affairs & policy
JoAnn Heffernan Heisen - vice president, chief information officer
Willard D. Nielsen - pice president, public affairs
John A. Papa - treasurer
Brian D. Perkins - worldwide chairman, consumer pharmaceuticals &
nutritionals group executive committee
Per A. Peterson, M.D., Ph.D. - chairman, research & development,
pharmaceuticals group executive committee
Larry G. Pickering - vice president, corporate development
Christine A. Poon - worldwide chairman, pharmaceuticals group
Raymond W. Ruddon, M.D., Ph.D. - vice president, science and
Michael H. Ullmann - secretary, associate general counsel
2.3.2 Company group chairmen
Robert W. Croce
William D. Dearstyne, Jr.
Carlos A. Gottschalk
Karen A. Licitra
Dennis N. Longstreet
Eric P. Milledge
Patrick D. Mutchler
David Y. Norton
Gerald M. Ostrov
Jose V. Sartarelli, Ph.D.
Joseph C. Scodari
Curt M. Selquist
Pericles P. Stamatiades
Nicholas J. Valeriani
Carol A. Webb
2.4 Top selling drugs
Remicade rheumatoid arthritis
Duragesic chronic pain
Aciphex/Pariet gastrointestinal disorders
2.5 Industry analysis (optional)
2.6 Competition analysis (optional)
In all its product lines, Johnson & Johnson companies compete with
companies both large and small, located in the United States and
abroad.Competition is strong in all lines without regard to the number
and size of the competing companies involved. Competition in research,
involving the development of new products and processes and the
improvement of existing products and processes, is particularly
significant and results from time to time in product and process
obsolescence. The development of new and improved products is
important to Johnson & Johnson's success in all areas of its business.
This competitive environment requires substantial investments in
continuing research and in multiple sales forces. In addition, the
winning and retention of customer acceptance of Johnson & Johnson's
consumer products involve heavy expenditures for advertising,
promotion and selling.
2.7 Challenges (optional)
The rate of growth for sales of PROCRIT and EPREX was slowed in the
latter half of 2002 as a result of new competition for PROCRIT. Also,
the selling, general and administrative expenses have increased
continuously over the last three years. The advertising expenses have
also increased over this period. In times of intense cost pressures,
these expenses are worrisome.
The Company is involved in numerous product liability cases in the
United States, many of which concern adverse reactions to drugs and
medical devices. The damages claimed are substantial, and while the
company is confident of the adequacy of the warnings and instructions
for use which accompany such products, it is not feasible to predict
the ultimate outcome of litigation.
Most of Johnson & Johnson's business is subject to varying degrees of
governmental regulation in the countries in which operations are
conducted, and the general trend is toward regulation of increasing
2.8 Marketing approaches (optional)
2.9 Internal communications (optional)
2.10 Additional information (optional)
3.1 Corporate profile
Pfizer Inc discovers, develops, manufactures, and markets leading
prescription medicines for humans and animals and many of the world's
best-known consumer brands. The company has three business segments:
- Health care
- Animal health
- Consumer health care
Pfizer operates in more than 150 countries with more than 90,000
employees and had revenues of USD 35 billion in 2002.
3.2 Corporate philosophy
We will become the world's most valued company to patients, customers,
colleagues, investors, business partners, and the communities where we
work and live.
We dedicate ourselves to humanity's quest for longer, healthier,
happier lives through innovation in pharmaceutical, consumer, and
animal health products.
3.2.3 Vision and values
To achieve our Purpose and Mission, we affirm our values of Integrity,
Leadership, Innovation, Performance, Teamwork, Customer Focus, Respect
for People, and Community.
- Integrity: we demand of ourselves and others the highest ethical
standards, and our products and processes will be of the highest
- Innovation: innovation is the key to improving health and sustaining
Pfizer's growth and profitability.
- Respect: we recognize that people are the cornerstone of Pfizer's
success, we value our diversity as a source of strength, and we are
proud of Pfizer's history of treating people with respect and dignity.
- Customer focus: we are deeply committed to meeting the needs of our
customers, and we constantly focus on customer satisfaction.
- Teamwork: we know that to be a successful company we must work
together, frequently transcending organizational and geographical
boundaries to meet the changing needs of our customers.
- Leadership: we believe that leaders empower those around them by
sharing knowledge and rewarding outstanding individual effort. Leaders
are those who step forward to achieve difficult goals, envisioning
what needs to happen and motivating others.
- Performance: we strive for continuous improvement in our
performance, measuring results carefully, and ensuring that integrity
and respect for people are never compromised.
- Community: we play an active role in making every country and
community in which we operate a better place to live and work, knowing
that the ongoing vitality of our host nations and local communities
has a direct impact on the long-term health of our business.
3.3 Senior management team
Henry A. McKinnell, Jr. - chairman of the board and chief executive
Peter B. Corr, Ph.D. - senior vice president, science and technology
Chuck Hardwick - senior corporate vice president
Karen Katen - president of the global Pfizer Pharmaceuticals Group,
executive vice president
Jeffrey B. Kindler - senior vice president and general counsel
John W. Mitchell - vice president, Pfizer Inc and president/team
leader, Pfizer global manufacturing
Robert W. Norton - senior vice president, corporate human resources
David L. Shedlarz - executive vice president and chief financial
3.4 Top selling drugs
The following drugs accounted for 85% of total human pharma sales in
Drug Indication $ (bn)
Lipitor cholesterol $7.9
Norvasc antihypertensive $3.8
Zoloft antidepressant $2.7
Neurontin epilepsy $2.2
Viagra erectile dysfunction $1.7
Zithromax antibiotic $1.5
Zyrtec allergy $1.1
Diflucan antifungal $1.1
3.5 Industry analysis
3.6 Competition analysis
Competition is intense in all of Pfizer's businesses and includes many
large and small competitors. The principal means of competition vary
among product categories and business groups. Technological
- Patients ease of use
- Cost effectiveness
are important to success for Pfizer. Its businesses also focus on
unmet medical needs and therapeutic improvements.
In recent years, a comparison of the total cost of medical treatments
using pharmaceuticals versus alternative treatments for the same
condition has become an important basis of competition. MCOs and PBMs
look to cost advantages as well as medical benefits in making their
drug formulary decisions. Merck's pharmaceutical sales and marketing
organization is a valuable competitive asset. Its salespeoples
ability to reach medical professionals with information about products
helps it respond to competitive efforts and launch new products.
In the current environment of competitive pressures on profit margins,
Pfizer is making continuous efforts to control the growth of expenses.
They have kept costs down in areas such as manufacturing, distribution
and sales administration by restructuring and consolidating
facilities. These measures have brought new efficiencies and reduced
or contained operating expenses.
Pfizer does face some uncertainty in its R&D operations, since vice
chairman John F. Niblack, president of PGRD, announced in June 2002
that he will retire on September 1. The company named three senior
executives to oversee its global research, development and technology
alliance efforts as part of a new organizational structure. Dr. Peter
Corr has been named senior vice president of science and technology.
In his new position, he will have overall responsibility for PGRD as
well as the licensing and development and science policy functions.
Pfizer also has its share of legal issues to contend with. In addition
to patent challenges on many of its best-selling drugs (Zoloft,
Celebrex, Neurontin, Diflucan and Glucotrol XL, among others), the
company is also facing a bevy of lawsuits connected to the marketing
of diabetes drug Rezulin. Connected to more than 60 deaths in the
U.S., the drug was pulled off the market in early 2000.
In December 2001, a Texas jury hit the pharma giant with a $43 million
verdict, for a woman who claimed the drug destroyed her liver. In
March 2002, an Oklahoma jury awarded $11.5 million to the family of a
man who took Rezulin and died of liver failure. Pfizer has appealed
both cases. Other suits were settled, and in some cases (Rockville, MD
and Houston, TX), juries found the company not liable for some Rezulin
There are more than 2,300 legal claims currently filed against Pfizer
because of Rezulin. Pfizer has successfully kept the lawsuits in
California and West Virginia from reaching class action status.
Also, in December 2001, Pfizer received an FDA warning letter about
its Terre Haute, IN, manufacturing facility. The site manufactures
several aseptic products, including: Cefobid, Permapen Isojects,
Pfizerpen G and Unasyn. Pfizer had no pending applications for new
products to be manufactured at this facility.
The FDA letter made 31 specific observations at the facility. "Pfizer
is taking this matter very seriously and we are providing a full and
detailed response to all of the issues raised by the FDA," said John
Mitchell, Pfizer vice president and president of Pfizer global
manufacturing. "We believe that we will be able to resolve these
issues expeditiously and that they will not have any impact on current
or anticipated new product filings."
3.8 Marketing approaches
One of Pfizer's biggest strengths is marketing. They do that the best
in the industry and are aligned all the way back to the discovery
process. Pfizer calls this the BAM process -- blockbusters are made,
i.e., they don't discover drugs, they develop them.
Described as a "marketing machine" by Fortune magazine, Pfizer employs
twice as many (20,000) sales representatives as Merck. Pfizer's sales
force is also notoriously aggressive and combative - perhaps because
15 percent of them hail from a military background, according to a
Pfizer aggressively employs direct-to-consumer advertising for its key
product Lipitor. Pfizer's sales campaign in doctors' offices has been
no less aggressive. Pfizer continually trains and tests its
salespeople. A five-week boot camp for recruits includes courses in
anatomy and physiology. Nothing is left to chance. The trainees go
through weeks of simulated sales calls in a mock physician's office,
built like a movie set on one of Pfizer's upstate New York campuses.
On the simulation stage, former sales reps play harried and irritable
doctors. Trainees are timed and judged on their ability to deliver a
pitch for a Pfizer drug.
All this reflects the company's guiding sales principle: It wants
doctors to think of Pfizer sales reps as vital suppliers not only of
drugs but also of new, useful medical information. That reputation
helped make Pfizer's sales reps the most productive in the industry,
with an average of 552 calls per year, vs. 409 for GlaxoSmithKline and
379 for Merck, according to Verispan.
3.9 Internal communications
3.10 Additional information
Cost of sales increased 6% in 2002 and 2% in 2001 while revenues
increased 12% in 2002 and 11% in 2001. The change in both years
reflects favorable business and product mix, the benefit of
integration synergies and improvements in manufacturing efficiencies.
Manufacturing efficiencies stem from greater volume and cost
reductions attributable to procurement initiatives, as well as plant
operating efficiencies. Cost of sales in 2002 was unfavorably impacted
by foreign exchange versus a favorable impact in 2001.
SI&A expenses increased 12% in 2002 and 2% in 2001. These increases
are mainly due to strong marketing and sales support for our broad
portfolio of human pharmaceutical products. During 2002, marketing
expenses included costs associated with the U.S. launch of the
anti-arthritic product Bextra, copromoted with Pharmacia, the U.S.
launch of the anti-fungal agent Vfend, and initial commercial support
of the multiple sclerosis product Rebif, copromoted in the U.S. with
Serono. In Europe, the launch of Spiriva for COPD, copromoted with
Boehringer Ingelheim and the migraine product Relpax also contributed
to the year-over-year increase in marketing expenses.
4. GlaxoSmithKline, plc
4.1 Corporate profile
GlaxoSmithKline (GSK) is a world leading research-based pharmaceutical
company with a powerful combination of skills and resources that
provides a platform for delivering strong growth in today's rapidly
changing healthcare environment. It has manufacturing sites in 38
countries, an employee-strenght of over 100,000 employees, operates in
over 102 countries and sells its products in over 150 countries. It
principally operates in two industry segments:
- Pharmaceuticals (prescription pharmaceuticals and vaccines)
- Consume healthcare (OTC medicine, oral care and nutritional
4.2 Corporate philosophy
GSK's mission is to improve the quality of human life by enabling
people to do more, feel better and live longer
We undertake our quest with the enthusiasm of entrepreneurs, excited
by the constant search for innovation. We value performance achieved
with integrity. We will attain success as a world-class global leader
with each and every one of our people contributing with passion and an
unmatched sense of urgency.
4.2.3 Strategic intent
We want to become the indisputable leader in our industry.
4.3 Senior management team
Dr Jean-Pierre Garnier - chief executive officer
Rupert Bondy - senior vice president and general counsel
Ford Calhoun - chief information officer
John Coombe - chief financial officer
Marc Dunoyer - president pharmaceuticals Japan
Russell Greig - president pharmaceuticals international
Dan Phelan - senior vice president human resources
David Pulman - president global manufacturing & supply
David Stout - president pharmaceutical operations
Chris Viehbacher - president US pharmaceuticals
Andrew Witty - president pharmaceuticals Europe
Tachi Yamada - president research & development
Jennie Younger - senior vice president corporate communications &
Jack Ziegler - president consumer healthcare
Bob Ingram - vice chairman pharmaceuticals
4.4 Top selling drugs
The following is a list of the top selling drugs from the GSK stable
for the year 2002.
Drug Indication $ (bn.)
Seroxat/Paxil CNS $3.1
Seretide/Advair respiratory $2.4
Augmentin antibacterial $1.8
Wellbutrin CNS $1.3
Avandia diabetes $1.2
Imigran/Imitrex CNS $1,2
Flixotide/Flovent respiratory $1,2
Zofran oncology/emesis $1.1
Combivir antiviral $0.882
Flixonase/Flonase respiratory $0.801
4.5 Industry analysis (optional)
4.6 Competition analysis (optional)
4.7 Challenges (optional)
4.8 Marketing approaches (optional)
4.9 Internal communications (optional)
4.10 Additional information (optional)
5. Bristol-Myers Squibb Co.
5.1 Corporate profile
Bristol-Myers Squibb Company, through its divisions and subsidiaries,
is a major producer and distributor of pharmaceuticals and other
healthcare related products and has three reportable segments:
- Other Healthcare.
It has a staff strength of over 44,000 people.
5.2 Corporate philosophy
To extend and enhance human life by providing the highest-quality
pharmaceutical and related health care products
We pledge -- to our patients and customers, to our employees and
partners, to our shareholders and neighbors, and to the world we serve
-- to act on our belief that the priceless ingredient of every product
is the honor and integrity of its maker.
5.3 Senior management team
Peter R. Dolan - chairman and chief executive officer
Lamberto Andreotti - senior vice president and president,
Stephen E. Bear - senior vice president, human resources
Andrew G. Bodnar, M.D. - senior vice president, strategy and medical &
Andrew R. J. Bonfield - senior vice president and chief financial
Wendy L. Dixon, Ph.D. - president, global marketing and chief
Donald J. Hayden, Jr. - executive vice president and president,
Tamar D. Howson - senior vice president, corporate and business
John L. McGoldrick - executive vice president and general counsel
Dean J. Mitchell - president, U.S. primary care
James B. D. Palmer, F.R.C.P. - president, pharmaceutical research
institute and chief scientific officer
Elliott Sigal, M.D., Ph.D. - senior vice president, global clinical
and pharmaceutical development
John L. Skule - senior vice president, corporate and environmental
5.4 Top selling drugs
The following were the major drugs in term of sales in 2002, down from
54% in 2000.
Drug Indication $ (bn)
Pravachol cholesterol $2.2
OTN anti-cancer $1.9
Plavix platelet inhibitor $1.8
Taxol cancer $0.8
Paraplatin ovarian cancer $0.7
Avapro hypertension $0.5
Sustiva HIV/AIDS $0.4
Zerit HIV $0.4
Monopril hypertension $0.4
Coumadin anti-coagulant $0.3
Note: These are the restated figures as supplied to the SEC.
5.5 Industry analysis (optional)
5.6 Competition analysis (optional)
The markets in which Bristol-Myers Squibb competes are generally
broad-based and highly competitive. The principal means of competition
used to market the products of Bristol-Myers Squibb include quality,
service, price, and product performance.
5.7 Challenges (optional)
The Company restated its previously issued financial statements for
the three years ended December 31, 2001, including the corresponding
2001 and 2000 interim periods, and the quarterly periods ended March
31, 2002 and June 30, 2002. The restatement affected periods prior to
Various lawsuits, claims and proceedings are pending against the
Company and certain of its subsidiaries. The most significant of these
are related to the following drugs:
It has also had to face investigations into several securities
- Average wholesale pricing
- Breast implant
The Company experienced a substantial buildup of wholesaler
inventories in its U.S. pharmaceuticals business over several years,
primarily in 2000 and 2001. This buildup was primarily due to sales
incentives offered by the Company to its wholesalers. These incentives
were generally offered towards the end of a quarter in order to
incentivize wholesalers to purchase products in an amount sufficient
to meet the Company's quarterly sales projections established by the
Company's senior management. In April 2002, the Company disclosed this
substantial buildup, and developed and subsequently undertook a plan
to work down in an orderly fashion these wholesaler inventory levels.
Not all the news has been terrible for B-MS. In early 2002, the
company received approval for its once-a-day version of HIV drug
Sustiva and its 80mg version of Pravachol. The latter drug also
benefited strongly from the withdrawal of Bayer's Baycol drug, as
sales grew 20% to $2.2 billion 2001.
5.8 Marketing approaches (optional)
Pharmaceutical products and the products of ConvaTec are promoted on a
national and international basis in medical journals and directly to
the medical profession. The Company is also using direct-to-consumer
advertising for a number of its pharmaceutical products. Most of the
other products of Bristol-Myers Squibb are generally advertised and
promoted on a national and international basis through the use of
television, radio, print media, consumer offers, and window and
in-store displays. Bristol-Myers Squibb's products are principally
sold to the wholesale and retail trade both nationally and
internationally. Certain products are also sold to other drug
manufacturers, hospitals and the medical profession.
5.9 Internal communications (optional)
5.10 Additional information (optional)
Merck's web site:
Johnson & Johnson's site
Pfizer's web site:
Glaxo Smithkline's site:
Bristo-Myers Squibb site:
SEC web site:
Press release announcing Merck's contract to Dendrite
marketing approach of Merck