Although the leading pharmaceutical companies are often termed multinationals, their regional origins are still important.
Several studies have suggested that the idea of a global company that transcends national boundaries is an oversimplification
of how businesses operate because such companies still retain many features of their national origin when expanding internationally.
This effect is observed in the work culture that reflects operational decisions and a perceived preference for home-country
nationals at the top of the organisation. This position is illustrated by GlaxoSmithKline, which originated in the UK. Although
the company generates 96% of its sales elsewhere in the world, its British CEO, Andrew Witty, has reiterated that the company
remains British and that it will maintain its main base in the UK despite the difficult operating environment (1).
Pharmaceutical company rankings
US pharmaceutical companies have tended to be high in the industry sales rankings. Therefore, as 2011 drew to a close, predictions
that US company Pfizer was about to be displaced by French firm Sanofi as the world's leading pharmaceutical company in terms
of sales came as a surprise and drew considerable media attention (2,3). After nine years of staying ahead of its rivals and
being active on the merger and acquisition front, little evidence had indicated that Pfizer would be surpassed.
Evaluate Pharma analysed companies' sales forecasts to 2016 and revealed the likelihood of a general shake-up in the rankings,
with a number of European companies set to perform strongly against their previously dominant US rivals (4). The analysis
suggested that by 2014, Pfizer would be the only remaining US pharmaceutical company in the top five. Pfizer is expected to
slide to third, while Swiss companies Novartis and Roche will take second and fourth places, respectively. Meanwhile, GlaxoSmithKline
will come in fifth, while US company Merck & Co. will slip to sixth, despite its $41-billion (€30.8 billion) acquisition of
Schering-Plough in 2009.
The major factor in Pfizer's commercial dip is considered to be the loss of US-patent protection for its blockbuster cholesterol-lowering
statin Lipitor (atorvastatin), which occurred in November 2011. Launched in 1998, Lipitor reached peak sales of $12.9 billion
(€9.7 billion) in 2006, accounting for 27% of Pfizer's revenue (5). In 2009, Pfizer acquired Wyeth in a $68-billion deal (€51
billion) to offset the impending loss of Lipitor's patent, but the product continued to represent a major source of sales;
in 2010, Lipitor achieved sales of $10.8 billion (€8.1 billion), representing 15.8% of Pfizer's sales (5).
The impending loss of patent protection led to India's Ranbaxy to develop a generic atorvastatin for the US and other markets.
Starting in 2003, the company began launching patent challenges against Lipitor patents in several markets (6). Pfizer resisted
strongly through its own legal counterattacks, but in 2008 it agreed to give Ranbaxy a license to sell atorvastatin in the
US market, which became effective 30 November 2011. In addition, Ranbaxy will have exclusivity for 180 days before other companies
can enter the market (6), while other agreements with Pfizer will also give Ranbaxy a license to sell atorvastatin in Canada,
Belgium, the Netherlands, Germany, Sweden, Italy and Australia (6).
The US is a key market for Ranbaxy, as it represents 70% of Pfizer's Lipitor sales (6). During its 180-day exclusivity period,
Ranbaxy could generate as much as $650 million (€488 million) in sales. Ranbaxy also formed a partnership with Israel's Teva,
which is the world's largest generic manufacturer. Teva has a strong distribution network in the US that should help Ranbaxy
keep ahead of other competition such as Watson Pharmaceuticals, which is also seeking to introduce a generic version of atorvastatin.
Although most attention has focused on Lipitor, Pfizer has several other products that have either recently lost patent protection,
or will do shortly. Between 2010 and 2012, it was estimated that drugs representing 42% of Pfizer's pharmaceutical revenue
were set to lose patent protection, including the antipsychotic Geodon (ziprasidone HCl), erectile-dysfunction drug Viagra
(sildenafil citrate), overactivebladder drug Detrol (tolterodine) and eye-pressure lowering drug Xalatan (latanoprost ophthalmic