HONG KONG (AP) — U.S. pharmaceutical company Pfizer Inc. is looking to outsource as much as 30 percent of its manufacturing — much of it to Asia — Martin MacKay, head of Pfizer's global research and development, said Friday.
Pfizer, based in New York City, currently outsources about 15 percent of its manufacturing. The company aims to double that figure as part of cost-cutting measures, MacKay said at an investor presentation in Hong Kong.
The development follows Pfizer's announcement at the beginning of the year that it would shut down manufacturing sites in Brooklyn, N.Y., and Omaha, Neb., and sell a third manufacturing site in Feucht, Germany.
These cuts, along with the closings of several research sites, were part of the companywide plan to cut its worldwide work force by 10 percent, or 10,000 jobs, and save US$2 billion.
Pfizer isn't the only pharmaceutical company to announce such a move. AstraZeneca recently said it would start shifting manufacturing operations to Asia.
Like other pharmaceutical companies, Pfizer is facing tepid growth amid competition from generic drug makers and the lack of clear blockbusters in its drug pipeline.
Its top product, Lipitor, a drug that lowers cholesterol, had roughly US$13 billion (euro8.8 billion) in sales last year, but is sales growth has slowed and partly due to the availability of generic versions of other cholesterol drugs. Lipitor will lose U.S. patent protection as early as 2010, exposing it to direct generic competition.
Pfizer also saw a big setback in its pipeline recently when it pulled Exubera, an inhaled-insulin product. Once viewed as a potential blockbuster, Exubera was approved in January but its launch was delayed because of manufacturing problems. Diabetes patients also found the inhaler difficult to use.
Pfizer's decision to drop the product dragged on the company's recent third-quarter results. Quarterly net profit plunged 77 percent to US$761 million (euro516.4 million) because of a pretax charge of US$2.8 billion (euro1.9 billion), or 31 cents a share, related to the company's decision to drop Exubera. The charge included a write-off of assets associated with the product.