In today’s world where people pop a pill for every kind of ailment affecting them, being a top pharmaceutical company in the world means handling a huge responsibility and remaining innovative always. Currently, Pfizer is officially the biggest company in the pharmaceutical world, staying ahead of other medicine manufacturing firms in meeting the requirements of millions of people in the world. The company has been dealing with the production of medicine and vaccines for almost all the possible medical fields including diabetes, immunology, oncology, and cardiology. Most importantly, however, is the fact that the core brand focus thrives because of the company’s extensive in-house research. This essay will discuss the story of Pfizer Pharmaceutical company including how it was formed, how it started, how it works, its effect on the U.S. economy, and the scandal that have risen in the company.
How it was formed
Pfizer was started in 1849 by two German-Americans; Charles Pfizer and his cousin, Charles Erhart, who brought together their Chemistry and confectionery expertise to start a business. The two began in Brooklyn, New York operating in one building, which served as their office, factory, laboratory, and store. Pfizer’s father provided them with a loan, which they used as capital to start their business (Pfizer, 2015). Santonin was among their first products, which cured intestinal worms – a widespread ailment at the time. The two business men became creative and added a flavor of an almond toffee. The sales of the Santonin were very good, and the two realized instant success.
Pfizer got a breakthrough during the Civil War where it sold painkillers, disinfectants, preservatives, and solutions such as iodine, chloroform, morphine, mercurial, and campor. When the company had expanded enough, the two businessmen moved its headquarters to Manhattan in the year 1868. In 1882, a warehouse was then opened in Chicago to cater for mass production of medicine (Pfizer, 2015).
How it started
The convulsion brought about by the American Civil War in 1862 had as much effects on the pharmaceutical industry as it had on the general American society. What has been described as the first industrial war was marked by the production of drugs as well as the manufacturing of weapons. The Union armies suddenly needed enormous amounts of antiseptics and painkillers, and this provided a great opportunity for Pfizer to expand its drug production, which it did. By 1868, the company experienced a great expansion of its production lines and the doubling of its revenues (Pfizer, 2015).
After the end of the war, the company continued focusing on industrial chemicals like it did on medicines. This led to the production of citric acid required in the emergent soft drinks industry thereby stimulating the expansion of today’s common brands such as Coca Cola, Pepsi, and Dr. Pepper (Pfizer, 2015). This became Pfizer’s backbone for a long period and laid the basis for the company’s continued growth. Moreover, the disruption of tartaric acid supply because of the Civil War in addition to increased tariffs prompted Pfizer to develop its production thus becoming the leading chemical suppliers in the U.S.
How it works
The company goes through several phases in developing and approving new drugs. The first phase is marked by clinical trials, which involve the administration of experimental therapy to humans for the first time. Trials in this phase usually focus on making sure that the therapy is safe for human use, rather than its effectiveness in the treatment of a particular ailment. In phase two of the development and approval of a new drug, the effectiveness of a drug in the treatment of a particular ailment or medical condition is assessed. Data about the experimental drug’s safety, potential risks, and side effects are also gathered in this phase (Pfizer, 2015),.
Phase three involves the testing of the results derived from earlier trials in a much bigger scope of many more individuals and collecting more information on the safety and effectiveness of the experimental drug. This phase generally provides the basis for the new drug’s benefit-risk assessment and much of the key information concerning the analyzed drug is included in the eventual labeling after the approval of the relevant regulatory authorities. Pfizer then files an application with a country’s relevant health regulatory authorities. In the U.S., for instance, the company files a New Drug Application (NDA) with the Food and Drug Administration (FDA). In Europe, Pfizer files a Market Authorization Application (MAA) with the European Agency for the Evaluation of Medicinal Products (EMEA) (Pfizer, 2015). In the application, the company must provide a clear description of the drug’s manufacturing process together with the quality data and results from every pre-clinical and clinical test. The final phase of Pfizer’s development and approval of a drug is the conduction of post-marketing studies after regulatory approval. This stage is critical in giving information about the drug’s ongoing use.
Effects on the U.S. Economy
Being a multinational company and a world leader in pharmaceuticals, Pfizer has a significant effect on the U.S. economy. Since the year 2000, the company embarked on various mega-mergers including the acquisition of Warner-Lambert in the year 2000, Pharmacia & Upjohn two year later, and the recent acquisition of Wyeth in the year 2009. Today, the organization’s sheer size is mind-boggling and has more than 100,000 employees. It is reported that the company pays up to $3.1 billion in corporate tax annually (Pfizer, 2015). So significant has the organization been to the U.S. economy that it affords to use a portion of its profits to influence the political bearing of the U.S. The company is said to have spent about $25 million to become the 6th largest Washington lobbyer in pushing for Obamacare reforms alone. In addition, the organization funds campaigns against counterfeit drugs (Pfizer, 2015)
However, the company has been criticized for its merger with Allergan, which would shift its operations from the U.S. to Ireland, hence saving the company about $1 billion in annual taxes. Critics of this move include Democratic presidential hopefuls Bernie Sanders, Hillary Clinton, and Martin O’Malley.
As mentioned above, the most recent scandal that the company has been involved in is its Pfizer-Allergan merger. The motives behind the merger are seen as saving the money paid in taxes in the U.S. By merging with Allergan, the company is said to save up to a third of its annual taxes. However, Pfizer claims that its motives are simply to dedicate more of its money, time, and resources to providing new treatments to ailments such as Alzheimer’s disease.
In the past, Pfizer has also been involved in fraud. In recent years, the company has agreed to various settlements over illegal marketing charges. For example, Bextra, one of Pfizer’s drugs was involved in a case that cost the organization about $2.3 billion in settling criminal and civil allegations, which was at the time a record for the biggest settlement of fraud in the healthcare industry (Harris, 2009). Other drugs manufactured by Pfizer and which have been involved in charges of illegal marketing include Geodon, Lyrica, Zyvox, Detrol, Nuerontin, and the famous Lipitor.
Pfizer settled a $49 million fine in 2002 on claims that it had been involved in fraud with the Medicaid program by overcharging customers for the Lipitor drug. Other settlements included the 2004 Nuerontiin settlement that cost $430 million and the 2011 Detrol settlement that cost $14.5 million. All these cases of fraud have cast a dark shadow over the organization’s integrity. The company continues to experience legal challenges. In 2012, Pfizer paid $164 million in a settlement of a lawsuit, which claimed that it misled investigators on Celebrex clinical results. A month later, Pfizer also settled a case where it was accused of misleading investigators on the risks of Pristiq and was thus fined $67.5 million (Harris, 2009).
In conclusion, Pfizer is a humongous company with a very rich history. The company has been responsible for the production of known and trusted pharmaceuticals over many years. Nevertheless, Pfizer’s integrity has been compromised by the many cases it is involved in concerning fraud. The company’s recent merger with Allergan has been accused of having ill motives such as evading taxes in the U.S. However, despite litigation that results from some of the company’s drugs, Pfizer has continued its dominance in the global pharmaceutical industry. Although the company’s merger with Allergan is termed as a disgrace in the U.S., the business aspect of the deal may further enhance its influence in the world.
Harris, G. (2009, Sept. 3). Pfizer pays $2.3 billion to settle marketing case. The New York Times. Retrieved from http://www.nytimes.com/2009/09/03/business/03health.html
Pfizer. (2015). Pfizer Inc.: Evolving to meet the needs of a changing society. Retrieved from http://www.pfizer.com/about/history/history.jsp