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HISTORY, CEO, BACKGROUND

CEO: Ian Read

Develops and produces medicines & vaccines Lipitor Lyrica Celebrex Viagra

Founded in NYC by Charles Pfizer & Charles Erhart as a chemical business which morphed into pharmaceuticals in the 1950’s with the discovery of Terramycin.

BASIC RELATIONSHIP TO CIGNA

Cigna customers purchase their products for their medical needs through Pharmacies/Home Delivery

Cigna negotiated rates for drug prices Catamaran – future

Cigna receives rebates from Pfizer one we “sell” their products to our customers

PFIZER PRODUCT OPERATING SEGMENTS

• Primary Care• Medication prescribed by PCP• (Lipitor, Viagra, Celebrex)

• Specialist Care• Medication Prescribed by Specialty Physicians (Oncologists, etc.)• Therapeutic Drugs (For specific diseases like multiple sclerosis or ALS)• Consumer Healthcare• Over the counter • Advil• Robotussin• Preparation H

• Other non-prescription products (chapstick)• Animal Health • Vaccination, tick collars

DISTRIBUTION CHANNELS

• Pfizer distributes its pharmaceutical products through pharmacies, hospitals and clinics.

• Over The Counter medications and products are sold in drug stores and other retail locations.

CUSTOMER DEMOGRAPHICS

• If you have access to their medication then you probably are a Pfizer customer.

• They make everything from vaccines to arthritis medication to chapstick, nearly impossible to avoid

GEOGRAPHIC LOCATIONS

• Headquartered in New York City

• R&D across numerous states + the UK

• Consumers are worldwide

 

CORE STRATEGIES, VALUE PROPOSITION, RELATIONSHIP TO 5 DRIVERS• Core Strategies: • Innovate and Lead – Improve Pfizer’s ability to innovate in biomedical

R&D and develop a new generation of high-value, highly differentiated medicines and vaccines.

• Maximize Value - Invest and allocate our resources in way that create the greatest long term returns for our shareholders.

Earn Greater Respect – Earn society’s respect by generating breakthrough therapies, improving access, expanding the dialogue on health care and acting as a responsible corporate citizen.                Own our Culture – Build and sustain a culture where colleagues view themselves as owners, generating new ideas, dealing with problems in a straightforward way, investing in open and candid conversations and working as teammates on challenges and opportunities.

• Value Proposition: To be the Premier Innovative Biopharmaceutical Company

RELATIONSHIP TO 5 DRIVERS:

• Cash: Sales rose 9% in emerging markets in 2012. Acquiring companies in major growth markets also brought the company 2.4 billion in Q1FY13

• Profit: Obamacare will result in increased drug purchases. Expansion of the Medical program will also add revenue

• Assets: Pfizer will repurchase $10 Billion worth of stock funded by the sale of Pfizers Nutrition Business to Nestle S.A. for 11.8 Billion.

• Growth: The Affordable Care Act (Obamacare) should result in roughly $115 billion in extra revenue over the next 10 years.

• People: In addition to the Affordable Care Act (Obamacare), it’s expected to have a major impact on the drug industry. In 2014, it’s expected to provide pharmaceutical companies an additional 30 million customers after it becomes mandatory for employers to provide employees with healthcare.

FINANCIAL STATEMENT ANALYSIS

Component Pfizer Cigna SignificanceCash & Cash Equivalents

2.18 B 2.8 B Very similar cash position

Cash Provided by Operations

17.8 B 719 M Cigna without the Reinsurance business sale, would have been around 3 B

Total Revenue 51.6 B 32.4 BIncome before Taxes 15.7 B 2.1 BOperating Profit Margin 30.50% 6.72% Significant difference possibly due to patents, drug

markup, etc.Shareholders' Net Income

22 B 1.55 B

Net Profit Margin 42.70% 4.55%EPS (Diluted) $3.19 $5.18 Return on Equity 28.80% 13.97

%Revenue Growth -5.60% 11.20

%Net Income Growth 51% -

9.10%Pfizer has realized more income from investing/financing activities than from their operations, whereas Cigna has performed better operationally

Earnings per Share Growth

64.40% -7.67%

Pfizer had a large contribution from an acquisition for which they have discontinued operations

PFIZER’S ROLE IN THE HEALTHCARE ENVIRONMENT• Provide access to safe, effective and affordable medicines

• Partner with health service companies (Cigna) 

• Partner with Pharmacy Benefit Managers (Catamaran) 

• Direct influence on the expense of operation

SUMMARY

• Ensure Pfizer is creating the safest – most effective products possible for our customers

• Stay knowledgeable of pharmaceutical costs so we can negotiate fair prices

• Provide Cigna customers with new alternative pharmaceutical drugs for chronic conditions, improving the customers health and well being . This will reduce the number of claims, calls, and improve NPS