U.S. pharmaceutical company Pfizer (NYSE:PFE) has said it would like to develop joint ventures with its competitors in order to expand into international markets by offering a broader range of prescription drugs.
The company has already partnered with Johnson & Johnson (NYSE:JNJ) in the development of new Alzheimer’s treatments. The Financial Times said that “the comments mark a fresh sign of willingness by pharmaceutical groups to share costs, risks, and commercial benefits.” There has been a growing pressure in the pharmaceutical industry for companies to cut costs while continuing to develop innovative medicines, which is where partnership with competitors can be mutually beneficial.
Chief Executive Officer of Pfizer Ian Reed announced his intentions to collaborate with other companies at the U.S. Healthcare Conference, citing vaccines, oncology, and neurodegenerative disease as areas in which partnership would be useful.
Pfizer has recently sold some of its noncore assets including its animal health division Zoetis and its nutrition division as the company looks to focus on its core business of creative and innovative prescription medicines. Reed said he’d like the company to concentrate on its two core prescription businesses, the “value” unit of existing off-patent branded drugs, and the “growth” unit of new drug development and experimentation.
Pfizer has also been working to get better scientists on its board of directors, which Reed believes will help the company continue to make a new generation of innovative treatments in the coming years.
Pharmaceutical companies have been under pressure in the U.S. from President Obama’s health care reform law that seeks to lower the cost of drugs and medical care. Companies like Pfizer used to count on drugs sold in the U.S. for the majority of their profits, as their generic rivals typically do better overseas than they do here, but analysts believe that with the passing of the healthcare reform law, pressure on the drug industry to lower prices will continue to grow in the next 3 to 5 years.
It is in this climate that Pfizer believes collaboration with its competitors will be necessary in order to support the development of new prescription drugs.
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