Pfizer-Wyeth Merger Rolls Forward; Meetings Casualties Still Uncertain

Pfizer completed its $67 billion acquisition of one-time-competitor Wyeth Pharmaceuticals on October 15, just one in a string of recent mergers and acquisitions in the pharmaceutical industry. (Think Merck’s November 3 merger with Schering-Plough and Genentech’s March 26 deal with Roche.) According to a variety of sources, plans are already in place to merge the companies’ meetings teams, but Pfizer representatives are staying very close-lipped about the process, and so far, there are more questions than answers.

When asked how the two meetings departments would be affected and how procurement and sourcing would be handled in the future, Joan Campion, a spokeswoman for Pfizer, issued the following statement to MeetingsNet: “I can tell you that Pfizer is continuing to evaluate its global workforce, which includes our medical meetings group, to determine how best to support patients and customers, support our businesses, and operate at a cost-competitive level.”

While uncertainty abounds as the two companies determine how to move forward, one thing is certain: layoffs. A condition of the merger requires Pfizer to eliminate nearly 20,000 jobs—a 15 percent reduction in the company’s workforce. The company said the cuts would “span sales, manufacturing, research and development, and administrative organizations,” according to an article in The Wall Street Journal.

Pfizer recently announced it will be closing six of its 20 research and development facilities. The company will also move work from its St. Louis operation, which housed some of its meetings professionals, to other locations, according to the WSJ. In addition, Pfizer said it will cut about 600 of the 1,000 jobs in the St. Louis area. MeetingsNet called meetings professionals at both Pfizer and Wyeth, but those whom we reached declined to comment.

Pfizer also plans to consolidate the functions at Wyeth’s Great Valley, Pa., campus primarily into its Collegeville, Pa., campus (which houses some of the company’s meetings management functions), and as a result, expects to exit the Great Valley campus in mid-2010. However, the decision to keep the Collegeville facility open does not mean that all employees at that location will keep their jobs nor does it mean that all Great Valley employees will lose theirs when that facility shuts down, according to a report in the Philadelphia Inquirer.

Meeting suppliers are also feeling the effects of the Pfizer-Wyeth deal. It’s typical to see meeting volume fall off drastically in the months leading up to the go-live date for a merger; however, meetings will likely return—at least in the short term—now that the merger is official, predicted one industry professional who preferred to speak anonymously. “When two pharma companies merge, they have to do some cross-training on each other’s products. There are realignment meetings and training meetings for the sales force,” he said.

After an initial surge in internal meetings, New York–based hotels that have worked with Wyeth in the past could see a more permanent drop in business. Pfizer has a Learning and Development Center adjacent to the Doral Arrowwood Conference Center in Rye Brook, N.Y., not far from the company’s Manhattan headquarters.

Third-party meetings management companies also often get locked out of future deals following a merger as companies look to consolidate vendors, says Judy Johnson, president and CEO of Rx Worldwide Meetings Inc., a Plano, Texas–based pharmaceutical meetings management company. While she does not work with Pfizer or Wyeth, Johnson says that when pharma companies merge it is common for the meetings team to work with procurement to drastically narrow down the scope of vendors they use.

She saw one pharma company go from 70 outsourced meetings providers down to 10 following a merger, and another company turn over its entire meetings sourcing function to one large vendor—leaving nearly 50 others who previously worked for the company out in the cold.

Most vendors don’t get an indication ahead of time that the consolidation is happening either, says Johnson. “Usually the companies are too busy working on their own policies internally [to inform suppliers of plans].”

Her advice to vendors: Have all your ducks in a row. You will likely get asked to prove your value and make a case for why you should retain the business, she says. When companies reduce their scope of meetings vendors, “the vetting process can take a solid six months,” adds Johnson. It typically involves submitting an online, 100-page request for information document, meeting with the company’s stakeholders in person, and participating in reverse auctions for the business (bidding to see who can produce the meeting at the best rate for the client). “It’s just a really different playing field out there today.”

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