Tyrannosaurus Rx n Sabrina George n Sheliah Vink

Tyrannosaurus Rx n Sabrina George n Sheliah Vink n Katherine King

Company Profile Pfizer/Merck

Pfizer n Research-based n Technologyintensive products n Three business segments

Merck n Global research-driven n Broad range of products n Benefit services

Market Info on Pfizer n Trading at 43 3/16 n Market Capital is $272, 674. 02 million n 59. 7% of shares held by institutions

Market Info on Merck n Trading at 89 15/16 n Market Capital $206, 904. 38 million n 53. 8% of shares held by institutions

Net Income n Pfizern $3, 179 million (1999) n Merckn $5, 891 million (1999)

Pfizer vs. Merck “Two of the world’s drug titans are facing off in a war for dominance -and their strategies couldn’t be more different. In the end, the presidential election may decide who wins. ” Fortune Magazine Lee Clifford

Pfizer Ø American Home Products / Warner Lambert situation Ø Overbid AHP by more than $10 billion

“Partner of Choice” v Pfizer earned this nickname by promoting drugs for smaller companies

“Predator Of Choice” o Pfizer earned this new nickname after the merger with Warner-Lambert

Merck’s Medco Subsidiary • More than 370 million products delivered yearly • On-line pharmacy business

Merck-Medco üContracts from unions, corporations, insurance carriers, and HMO’s üThree $80 million high-tech pharmacies

Medco’s Training o Sensitivity training for service reps includes cotton stuffed in ears, gloves and vaseline on glasses.

Strategies

Pfizer’s Strategy q “Free-spending, free marketer” q Unregulated healthcare environment

Merck’s Strategy § Getting deeper into managed care § Medicare reform § “far-reaching inescapable HMO”

Who Will Dominate?

Pfizer’s Competitive Edge v “Marketing machine” v 20, 000 sales reps v Spends 39% of revenue on sales and marketing

Merck’s Competitive Edge o o o Embracing managed care Concern for uncovered seniors Employee amenities.

Making A Deal With The Devil n Irked independent pharmacists n Limited distribution of Fosamax n An equity stake in CVS Pro. Care n Medco’s Your Plan program

Merck’s View Controlling the means of distribution would be a critical advantage in an environment more hostile to profits.

Pfizer’s View “Pfizer is clearly betting that the medical environment doesn’t change that much-that people will continue to pay up for drugs. ”

Sales Force

Pfizer’s Sales Force o 20, 000 sales reps o Each rep averages 459 visits to doctors o Very aggressive approach

Merck’s Sales Force n 11, 000 sales reps n Salespeople are “collegial, ” “responsible, ” and “less aggressive”

Political Effects

Bush Administration ØPfizer benefits ØMerck suffers

Gore Administration q Merck profits q Pfizer takes a dive

Conclusion

Which one is better? n Based on election n Our vote is for Merck

Thank You! n. Don’t forget to vote