Biggest Mergers In Recent Times

In one of the biggest mergers in recent times the world’s largest drug manufacturer, Pfizer, is to swallow its nearest rival, Pharmacia, in a 100-billion dollar deal that will take up to 12 per cent of Australia’s pharmaceutical market.

The new even larger Pfizer is expected to be joined by other mega-drug companies in a rush to merge but not everyone thinks the trend is good for consumers.Simon Santow reports.SIMON SANTOW: Most Australians know Pfizer for the drugs it makes and markets. There’s the anti-impotence pill Viagra and there’s Norvasc for blood pressure. Its new junior partner adds others like the cancer drug Camptosar.In a global deal so secret Pfizer’s acquisition of Pharmacia came about without the Australian operation knowing of the plans.Martyn Goddard, a former consumer representative on the Federal Government’s Pharmaceutical Benefits Advisory Committee says it’s not good news for Australians.MARTYN GODDARD: Already their anti competitive behaviour as far as price is concerned for their drugs is almost complete but their need to compete reduces with each of these big mergers. So if we didn’t have something like the PBS to enforce price discipline, to enforce a kind of competition between them to kind of synthesize what a free market ought to do, then the outcome for Australian consumers and consumers around the world would be very poor.SIMON SANTOW: He says the two merged companies don’t often compete and there’ll be even less competition friendly for consumers in the new pharmaceutical climate.MARTYN GODDARD: I think that even though, they are a very, very aggressive company and I believe you could argue they’re the most aggressive, they’re not Robinson Crusoe. That’s what this industry is like and that’s what this sort of corporate behaviour is a reflection of. This is a very, very tough, I believe nasty, industry. It employs a lot of pleasant, smooth talking, polite marketers, which is the people that consumers and particularly doctors see, but behind that, you really become aware of teeth sometimes.SIMON SANTOW: Alan Evans, CEO of Medicines Australia, says this is the first of what will be similar mergers in the near future as the pressure grows for even more aggressive marketing.ALAN EVANS: I mean, I think this one was a surprise as it was done so quietly but secondly I think the industry understands why it’s happening and I think each of the major companies are looking around and seeing who they can partner with. SIMON SANTOW: But Alan Evans can see some benefits from the merger.ALAN EVANS: It’ll reduce their costs as they settle the merger down. LINDA MOTTRAM: Alan Evans, CEO of Medicines Australia. Simon Santow reporting.(Source:http://www.abc.net.au)