Dow Jones component Pfizer (PFE) said Wednesday it will reorganize into three new businesses 2019 to contend with “the impact of patent protection losses post-2020.”
But in morning trading on the stock market today, Pfizer stock dipped 0.5%, near 37.30. Shares remained in the red after the pharmaceutical giant said late Tuesday it would back away from planned drug price increases. Meanwhile, shares of other pharmaceutical companies fell a fraction.
Under the restructuring, Pfizer’s Innovative Medicines division will include biosimilars, anti-infection drugs and sterile injectables. Its Established Medicines unit will include off-patent branded and generic drugs, Finally, the company’s Consumer Healthcare branch will hold all over-the-counter medicines.
“This new structure represents a natural evolution of these businesses,” Chief Executive Ian Read said in a prepared statement. Patent protection losses will begin around December in the U.S. with Lyrica, a nerve pain medication.
Pfizer Restructuring In 2019
Effective in 2019, Innovative Medicines will run all the current Innovative Health businesses as well as the new Hospital Medicines business unit. Pfizer will also incorporate its biosimilar portfolio into its Oncology, and Inflammation and Immunology units.
Established Medicines will hold the majority of Pfizer’s off-patent drugs. This includes Lyrica, cholesterol drug Lipitor, high blood pressure drug Norvasc and erectile dysfunction drug Viagra. The business will run globally.
The unit is meant to operate “as a true stand-alone business within Pfizer,” the company said in a news release. It will have its own manufacturing, marketing, regulatory and, with some exceptions, enabling functions.
Consumer Healthcare, on the other hand, differs from Pfizer’s two prescription medicine businesses, Pfizer said. The firm confirmed it’s still mulling strategic alternatives for this unit. It expects to make a decision before the end of the year.
“Trends in consumerism and an increased focus on staying healthy are causing consumers to seek easily accessible health and wellness solutions,” the firm said. “The company believes this business is well positioned to continue its growth.”
Pfizer Defers Price Increases
On Monday, President Donald Trump slammed Pfizer and other pharmaceutical companies in a tweet. He accused them of raising “drug prices for no reason.” This followed Trump’s renewed calls in May to cut drug prices. But analysts saw his proposed blueprint as more rhetoric than reform.
Still, Pfizer said late Tuesday it would defer price increases that were effective earlier this month. This will “give the president an opportunity to work on his blueprint to strengthen the health care system and provide more access to patients,” according to a news release.
“Pfizer shares the president’s concern for patients and commitment to providing affordable access to the medicines they need,” CEO Read said in a written statement.
Late Tuesday, Trump praised Pfizer in a tweet for its decision on “price hikes, so American patients don’t pay more.”