So what will become of OTC healthcare products?

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Swimom
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Date Joined Apr 2006
Total Posts : 1732
   Posted 3/9/2007 1:23 PM (GMT -7)   
With the recent aquisition of Pfizer Consumer Healthcare by Johnson and Johnson, what do you all think will happen to product costs and  the job industry here in the U.S. ? Many of these products are already being made elsewhere but certainly not all. The new aquisition affects products such as Listerine, Sudafed, Bandaid products and protective undergarments, just to name a few. 
 
Just curious how other feel the market will be affected.
 
Swim
 
 

Tony Crispino
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Date Joined Dec 2006
Total Posts : 8122
   Posted 3/9/2007 3:30 PM (GMT -7)   
Ah. A business discussion here at HealingWell. Thanks Swim, but this may be where I babble.

Pfizer also makes another drug we use here in this forum...Viagra.

I have worked for a major corporation (N.E.C. america, F.o.r.b.e.s. top 50) for 16 years. We sold technology products to the world. My maket is PBX's and related telecommunications products mainly in the Las Vegas area. I was the engineering designer for over 50% of the Las Vegas strip hotels. I also sold the products. What happened here was that six major gaming companies merged in recent years forming three major companies. This consolidation effort only worked for the bottom line of those companies.
> It did not lower hotel rates.
> It did not lower restaurant prices.
What it did was lower the cost of doing business for these "mega" gaming companies. I guess that's good for you if you work there, no wait, if you leave one comapny you have less options in the future. Nope just the execs and investors made out on this mass consolidation. It left my company, a reputed vendor, out in the "cut our profit margins to try to keep business approach". I watched us go from an integral part of the Las Vegas technology scene, to stumbling over decisions and revolving the front door in keystone cop fashion. It wasn't just my company it was our competition as well. We (the vendors) were strapped by larger customers who leveraged their size against our small profit margins. I was able to watch a wirlwind of management decisions that did not address this in a timely manner, and thus N.E.C., nor it's competition are doing particularly well.

I found a counter niche for me that looks very promising, and has low overhead. I will be able to snag a good chunk of business. I left my company in November and I formed a new company, an LLC with my wife as the majority owner. We qualify for the diversity programs at these new companies as we are a small Nevada company that is female majority owned. We are doing quite well in our early stages. Heck of alot better than my early PC news.

OK this is where it gets rough...my opinion.

These investors will make out quite well in this merger. The consumer will not do nearly as well, if well at all. Don't look for a sudden drop in prices on these products. Don't think it will get you a pay raise if you work there, you will for some but not the overwelming majority. For the companies that have a major portion of their business supplying Pfizer, sell your stocks now and buy the stocks of those that sell primarely to J&J, you know that since J&J is the big boy now that their team members will stick with what they have been comfortable with in the past, and they will likely have larger buying power. And one more thing, as a consumer, remember that compitition is the best thing for research and development. Don't be afraid to buy the lessor competing product if it can have a positive effect by keeping J&J honest. I'm all for mergers if they can form a strong competitive scene and attempts to fit the affected communities. That does not happen with any regularity at all.

;-)

You had to get me going, Swim...

Tony

Swimom
Veteran Member


Date Joined Apr 2006
Total Posts : 1732
   Posted 3/9/2007 9:14 PM (GMT -7)   
Pfizer didn't sell it's drug business but, it is closing its research and development center here in Michigan. The massive complex (known as one of Pfizer's last hostile take overs) is an anchor business in Ann Arbor. The loss will surely be felt for a long time in a state with an 11% unemployment rate. High tech jobs are running from this country....sad, very sad. You don't want to know my thought on why the research and development has gone to other countries. One thing for sure...less overhead won't translate into cheaper drug costs here.

By the way, I teach continuing ed to their soon to be unemployed emergency medical response teams. No free Viagra so far! Fail em all!

I wouldn't expect prices to drop at all on healthcare products with this little J&J deal. In fact, we can expect the oposite most likely. Look for hospital costs to jump. So many in house medical supplies are made by either Pfizer or J&J. The competition just got less intimidating. Prices won't inprove...not here.

PS: Congrats and good luck to you and your wife on the new adventure!
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