Pfizer SWOT and PESTLE Analysis

Strength

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Weakness

1. Negative publicity due to tax scandals: Pfizer had been involved in several scandals, the most recent being the issue of tax inversion to UK, which made the company cancel its ambitious plans to merge with an Irish drug company. The pharmaceutical behemoth Pfizer has also been accused of involvement in a series of paper transactions to create a A$936 million loss in Australia, due to a billion-dollar exercise in tax evasions.

2. Heavily dependent on US markets: According to the annual report of Pfizer, over 50% of its revenues are generated from the USA (53% in 2018, 50% in 2017 and 2016 fiscals), 7% to 8% contributed by Japan and China each and around 35% coming from other countries. With stringent drug regulation policies and changing political landscape, this heavy dependency on American markets can prove to be quite risky wherein Pfizer should look at expanding its footprint and revenue streams from international markets.

3. Drug testing debacles: Pfizer has had several cases of failed or scrapped drug tests, and FDA interventions due to breach of regulations. In a notable incident in 2011, Pfizer had to pay compensation of $175,000 each to parents of four Nigerian children who were meningitis drug trial victims. In 2011, Dimebon drug for Alzheimer's disease failed in a Phase III trial involving patients suffering from mild to moderate symptoms of the disease.

4. Allegations of illegal marketing: Pfizer has been involved in several cases of illegal marketing of drugs for purposes other than the intended purposes. In 2009, Pfizer had to pay an enormous $2.3 billion for illegally marketing its painkiller Bextra. In 2013 Pfizer’s Wyeth unit has to pay $491 million for illegal marketing of the kidney transplant drug Rapamune which was being used in other organ transplants. In Feb, 2019, The U.S pharma giant was caught up in yet another storm of speculations when it proposed to tie up with IMCR (Indian Council of Medical Research) for work on anti-microbial resistance (AMR) due to questions raised over conflict of interest. The whistle blower alleged Pfizer of aggressively peddling drugs and drug consumption that would lead to anti-microbial resistance. On the other hand, tracking drug resistance and reducing its levels can keep patients functioning as customers, boosting sales of these pharmaceuticals. There have been several other instances globally where Pfizer has been charged in illegal marketing cases, damaging its reputation.

5. Failed mergers and acquisitions: Pfizer has had enormous inorganic growth, but not all of the mergers and acquisitions in the past have been profitable for the company. Further the potential changes in the corporate tax structure in the United States have prevented the company from pursuing any major M&A deals. Pfizer’s $160 billion merger with Allergan which was to take place in 2016 was called off due to uncertain implications regarding tax benefits. In 2014, Pfizer rescinded its attempt to buy AstraZeneca for approximately 70 billion pounds ($118 billion) almost at the eleventh hour before the deal closing deadline due to major fears raked up by the UK Government over job security.

Opportunity

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Threat

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Political

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Economic

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Social

1. Increase in social value of health improvements: Pharmaceutical innovation has helped in increased longevity across the globe. Between 1970 and 2000, increased longevity added in the United States added an approximate $3.2 trillion per year to national wealth. Thus with the booming population and growth in income standards of the baby-boomer generation, the social value of improvements in health will continue to rise. Pharmaceutical R&D helps in adding social value and has direct implications for life-expectancy and national wealth. Pfizer actively pursues innovation across pharma segments and also is lobbying for increased patent life so that it can invest further in R&D.

2. Low reputational ranking based on consumer perceptions: Pharmaceutical companies have been involved in controversies in recent times and Pfizer ranks the worst amongst the lot. Issues related to high and rising prices of drugs have plagued the company. The company had also tried to unsuccessfully relocate its tax base out of United States which further damaged its reputation. In a 2016 study by the by the Reputation Institute it had the lowest reputational ranking based on consumer perception on parameters ranging from their products to citizenship.

Technological

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Legal

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Environmental

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