Pfizer and the Challenges of the Global Pharmaceutical Industry 2019 - A

In 2018, President of the United States, Donald Trump, criticized the company Pfizer Inc. (Pfizer) for increasing drug prices—which had been a strategic move by Pfizer in response to industry-wide challenges. This announcement highlighted the complex dynamics of the pharmaceutical industry and the big challenges that innovative research and development (R&D)–intensive pharmaceutical companies faced. The entire pharmaceutical industry was being challenged by issues such as decreasing global average returns on investment and increased R&D costs. In addition, the company faced increased competition from companies from other industries and from emerging-market companies. Pfizer’s chief executive officer needed to determine whether or not these changes marked a turning point for the whole industry.Learning Objective:The case may be taught in an undergraduate- or graduate-level course on competitive strategy, industrial organization, global strategy, or international management. It helps students improve their ability to analyze and understand industry complexities and the interlinkages to global and regional strategy-making of a multinational corporation. After working through Case A and answering the assignment questions, students will be able to do the following:Apply structural analyses using concepts of industrial organization, competition, segmentation, and power, using Porter’s Five Forces model.Analyze and evaluate industry-specific complexities and limitations, such as patent protection, R&D process/pipeline, product segmentation, customer structure, and local laws.Discuss regional integration and globalization forces theories and apply these to companies’ strategies and decision-making.Identify, analyze, and evaluate relevant data and information.