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Tyrannosaurus Rx

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  1. Tyrannosaurus Rx • Sabrina George • Sheliah Vink • Katherine King

  2. Company Profile Pfizer/Merck

  3. Pfizer • Research-based • Technology-intensive products • Three business segments

  4. Merck • Global research-driven • Broad range of products • Benefit services

  5. Market Info on Pfizer • Trading at 43 3/16 • Market Capital is $272,674.02 million • 59.7% of shares held by institutions

  6. Market Info on Merck • Trading at 89 15/16 • Market Capital $206,904.38 million • 53.8% of shares held by institutions

  7. Net Income • Pfizer- • $3,179 million (1999) • Merck- • $5,891 million (1999)

  8. 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

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

  10. “Partner of Choice” • Pfizer earned this nickname by promoting drugs for smaller companies

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

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

  13. Merck-Medco • Contracts from unions, corporations, insurance carriers, and HMO’s • Three $80 million high-tech pharmacies

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

  15. Strategies

  16. Pfizer’s Strategy • “Free-spending, free marketer” • Unregulated healthcare environment

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

  18. Who Will Dominate?

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

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

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

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

  23. 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.”

  24. Sales Force

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

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

  27. Political Effects

  28. Bush Administration • Pfizer benefits • Merck suffers

  29. Gore Administration • Merck profits • Pfizer takes a dive

  30. Conclusion

  31. Which one is better? • Based on election • Our vote is for Merck

  32. Thank You! • Don’t forget to vote