Pfizer 2015 Annual Report Download - page 9

Financial Review
Pfizer Inc. and Subsidiary Companies
8
2015 Financial Report
Our Strategy
We believe that our medicines provide significant value for both healthcare providers and patients, not only from the improved treatment of
diseases but also from a reduction in other healthcare costs, such as emergency room or hospitalization costs, as well as improvements in
health, wellness and productivity. We continue to actively engage in dialogues about the value of our products and how we can best work with
patients, physicians and payers to prevent and treat disease and improve outcomes. We continue to work within the current legal and pricing
structures, as well as continue to review our pricing arrangements and contracting methods with payers, to maximize access to patients and
minimize any adverse impact on our revenues. We remain firmly committed to fulfilling our company’s purpose of innovating to bring therapies
to patients that extend and significantly improve their lives. By doing so, we expect to create value for the patients we serve and for our
shareholders.
Commercial Operations
We manage our commercial operations through two distinct businesses: an Innovative Products business and an Established Products
business. The Innovative Products business is composed of two operating segments, each of which has been led by a single manager in 2015
and 2014––the Global Innovative Pharmaceutical segment (GIP) and the Global Vaccines, Oncology and Consumer Healthcare segment
(VOC). Effective February 8, 2016, the Innovative Products business is led by a single manager. The Established Products business consists
of the Global Established Pharmaceutical segment (GEP), which is also led by a single manager. Each operating segment has responsibility
for its commercial activities and for certain IPR&D projects for new investigational products and additional indications for in-line products that
generally have achieved proof of concept. Each business has a geographic footprint across developed and emerging markets.
Some additional information about each business and operating segment follows:
Innovative Products Business Established Products Business
Global Innovative Pharmaceutical
segment:
GIP focuses on developing and
commercializing novel, value-creating
medicines that significantly improve
patients’ lives. Key therapeutic areas
include inflammation/immunology,
cardiovascular/metabolic, neuroscience/
pain and rare diseases and include
leading brands, such as Xeljanz, Eliquis,
Lyrica (U.S. and Japan), Enbrel (outside
the U.S. and Canada) and Viagra (U.S.
and Canada).
Global Vaccines, Oncology and Consumer
Healthcare segment:
VOC focuses on the development and
commercialization of vaccines and products for
oncology and consumer healthcare. Consumer
Healthcare manufactures and markets several
well known, over-the-counter (OTC) products.
Each of the three businesses in VOC operates
as a separate, global business, with distinct
specialization in terms of the science and
market approach necessary to deliver value to
consumers and patients.
Global Established Pharmaceutical
segment:
GEP includes legacy brands that have
lost or will soon lose market exclusivity in
both developed and emerging markets,
branded generics, generic sterile
injectable products, biosimilars and
infusion systems.
We expect that the GIP and VOC biopharmaceutical portfolios of innovative, largely patent-protected, in-line and newly launched products will
be sustained by ongoing investments to develop promising assets and targeted business development in areas of focus to ensure a pipeline of
highly-differentiated product candidates in areas of unmet medical need. The assets managed by these groups are science-driven, highly
differentiated and generally require a high-level of engagement with healthcare providers and consumers.
GEP is expected to generate strong consistent cash flow by providing patients around the world with access to effective, lower-cost, high-
value treatments. GEP leverages our biologic development, regulatory and manufacturing expertise to seek to advance its biosimilar
development portfolio. Additionally, GEP leverages capabilities in formulation development and manufacturing expertise to help advance its
generic sterile injectables portfolio. In addition, GEP may also engage in targeted business development to further enable its commercial
strategies. GEP has the knowledge and resources within R&D to develop small molecules, including injectables, and biosimilars. On
September 3, 2015, we acquired Hospira, and its commercial operations are now included within GEP. Commencing from the acquisition date,
and in accordance with our domestic and international reporting periods, our consolidated statement of income, primarily GEP’s operating
results, for the year ended December 31, 2015 reflect four months of legacy Hospira U.S. operations and three months of legacy Hospira
international operations. For additional information about the Hospira acquisition, see Notes to Consolidated Financial Statements––Note 2A.
Acquisitions, Licensing Agreements, Collaborative Arrangements, Divestitures, Equity-Method Investments and Cost-Method Investment:
Acquisitions.
For additional information about our operating structure, see Notes to Consolidated Financial Statements––Note 18. Segment, Geographic
and Other Revenue Information: Segment Information.
For additional information about the 2015 performance of each of our operating segments, see the “Analysis of Operating Segment
Information” section of this Financial Review.
Following the closing of the pending combination with Allergan, the Vaccines and Oncology businesses are expected to be combined with the
Global Innovative Pharmaceutical business and we expect to create a new global business, Global Specialty and Consumer Brands, that
includes our Consumer Healthcare business and Allergan’s ophthalmology and aesthetics businesses, as well as Botox Therapeutic and
Cosmetic. Allergan’s Anda distribution capabilities and brands in women’s health and anti-infectives are expected to be combined with the
Global Established Pharmaceutical business.