Pfizer and Mylan to Form Global Leader in Affordable Medicines Through Merger of Off-Patent Businesses

On July 29, 2019, VCBeat (WeChat ID: vcbeat) learned from foreign media reports that Pfizer was in negotiations with generic drug giant Mylan to merge their off-patent drug businesses. If successful, the two companies would jointly create a global giant in low-cost pharmaceuticals.

Under the terms of the deal, Mylan shareholders will hold more than 40% of the shares in the new company, with Pfizer shareholders holding the remainder. Pfizer will also receive approximately $12 billion from the transaction, and the merged entity will be headquartered in the United States. This transaction will bring the two pharmaceutical giants together, reshaping the competitive landscape of the global generic and off-patent drug market.

Michael Goettler, Global President of Pfizer Upjohn, will become the CEO of the merged company, while Robert Coury, Chairman of Mylan’s Board of Directors, will serve as Executive Chairman of the Board. Heather Bresch, current CEO of Mylan, will step down, and Rajiv Malik, President of Mylan, will also depart and will not hold a position in the post-merger company.

Pfizer, founded in 1849 with a history spanning over 160 years and headquartered in New York, USA, is currently the world’s largest research-based biopharmaceutical company and a Fortune Global 500 enterprise. In its early days, Pfizer was primarily a chemical company focused on the production of chemical products, with pharmaceuticals, as a category of chemicals, falling within its business scope. The American Civil War, which broke out in 1861, provided Pfizer with an opportunity for growth, as the company supplied large quantities of medicines to the Union Army. As the war progressed, Pfizer became one of the largest chemical manufacturers in the United States.

Pfizer possesses some of the world’s most advanced manufacturing facilities and testing technologies. Its first-class analytical testing methods and quality assurance system ensure that all its products meet or exceed the standards of the Chinese Pharmacopoeia and the United States Pharmacopeia. Furthermore, Pfizer’s products are approved for export to Japan, Australia, the Philippines, Europe, and other regions. Currently, Pfizer’s products marketed in China include Cefobid, Sulperazon, Zithromax, Diflucan, Norvasc, Zoloft, Cardura, Viagra, Celebrex, Lipitor, and others.

Pfizer’s product portfolio spans a broad and highly promising range of therapeutic and health areas, including chemical drugs, biologics, vaccines, and consumer healthcare products, with its research and development and manufacturing capabilities ranking among the most advanced globally. Based on 2018 revenue figures, Pfizer topped the list of global pharmaceutical companies with $53.43 billion in sales.

Mylan, established in 1961 and headquartered in Pennsylvania, USA, is a generic pharmaceutical company. Initially founded by two U.S. Army veterans as a distributor of other products in southern West Virginia, Mylan aimed to help people in rural communities access reliable, high-quality, and affordable medications. Over time, Mylan has grown into one of the world’s largest generic drug manufacturers, employing approximately 35,000 people.

Mylan boasts the largest and most diverse portfolio of biosimilars and insulin analogs in the industry, with its products sold in over 165 countries and regions. Mylan offers a portfolio of more than 7,500 products to the market, including prescription generics, branded generics, biosimilars, and over-the-counter (OTC) medicines. In 2018, Mylan’s global sales revenue reached $11.26 billion, making it the world’s leading generic pharmaceutical company.

Generic drugs are identical to existing approved brand-name drugs in terms of active ingredients, dosage form, safety, strength, route of administration, quality, and performance characteristics. However, manufacturers of brand-name drugs invest substantial capital in research, development, and manufacturing. Generic drug developers are not required to replicate costly clinical trials and rarely engage in product promotion; consequently, the cost of generic drugs is typically significantly lower than that of brand-name drugs. In the United States, generic drugs accounted for 90% of all prescription medications dispensed in 2017, saving the nation’s healthcare system billions of dollars.

(Compiled by Cheng Tao)