Pfizer's Benefits from Selling Animal Health Business
Written by Alyssa Clark
Pfizer’s Benefits from Selling Animal Health Business
It’s not every day that a company can say that they have beaten or outsmarted Wall Street— but after Pfizer’s second-quarter numbers were tallied, it seems that they have done just that, if not more. The company was able to do so in a way that some may call unorthodox, some may call lucky or some may call just making the right decision at the right time.
A company built upon the world of pharmaceuticals and manufacturing drugs, Pfizer stands as the second-largest drugmaker generating continuous revenue that has caught the attention of some of the most important healthcare companies domestic and abroad. With such big shoes to fill, and so many consumers and patients to serve, it is no wonder why Pfizer’s market seems to be ever-expanding as time continues to tick on.
Ironically, the benefit in the recent second-quarter numbers for Pfizer had nothing to do with drugs or any kind of pharmaceuticals, but it had everything to do with the company deciding to sell their animal health business. Not only did revenue improve with the loss of this part of Pfizer’s empire, but the company ended up quadrupling their revenue— yes, that is a real thing.
More traditional to Pfizer’s motive and business character, the biggest producer for this quarter was their cholesterol fighting drug Lipitor, as it was the seemingly most impressive drug in the U.S. for quite some time. It was the world’s best selling drug for nearly a decade, until losing its exclusivity in the U.S. and parts of Europe last year which led to a quite substantial drop in its value. With its patent expiring, the company expected this kind of decrease in value, and is one of the reasons it decided to sell the animal business, in order to offset the minor loss while simultaneously insuring that there would be no gross financial loss in the end.
The recorded numbers of the drop came to be a once $13 billion drug, now stands as a $484 million drug which translates directly to a whopping 55 percent decrease. How did Pfizer manage to still quadruple their earnings, amiss this kind of let down?
Quick-thinking and keeping their eyes on the future seems to be the answer. By proactively thinking to sell the animal health business, Pfizer knew that the revenue from the sell would be able to counteract the impact of the expiring patents, thus creating a place in the market for them to maintain their face and stature. This New York-based company is expected, and I imagine will, maintain its full-year adjusted earnings outlook of $2.10 and $2.20 per share, with reasearchers averaging the projected amount to rest at about $2.16 per share.
About the Author
Alyssa Clark is the Editor of Healthcare Global
Getting ready for cloud data-driven healthcare
As healthcare continues to recognise the value of data and digital transformation, many organisations are relying on the cloud to make their future-forward and data-centric thinking a reality. In fact, the global healthcare cloud computing market was valued at approximately $18 billion and is expected to generate around $61 billion USD by 2025.
At the forefront of these changes is the rapid adoption of cloud-based, or software-as-a-service (SaaS), applications. These apps can be used to handle patient interactions, track prescriptions, care, billing and more, and the insights derived from this important data can vastly improve operations, procurement and courses of treatment. However, before healthcare organisations can begin to dream about a true data-driven future, they have to deal with a data-driven dilemma: compliance.
Meeting regulation requirements
It’s no secret that healthcare is a highly regulated industry when it comes to data and privacy – and rightfully so. Patient records contain extremely sensitive data that, if changed or erased, could cost someone their life. This is why healthcare systems rely on legacy technologies, like Cerner and Epic EHRs, to manage patient information – the industry knows the vendors put an emphasis on making them as secure as possible.
Yet when SaaS applications are introduced and data starts being moved into them, compliance gets complicated. For example, every time a new application is introduced into an organisation, that organisation must have the vendor complete a BAA (Business Associate Agreement). This agreement essentially puts the responsibility for the safety of patients’ information — maintaining appropriate safeguards and complying with regulations — on the vendor.
However, even with these agreements in place, healthcare systems still are at risk of failing to meet compliance requirements. To comply with HIPAA, U.S. Food and Drug Administration 21 CFR Part 11 and other regulations that stipulate the need to exercise best practices to keep electronic patient data safe, healthcare organisations must maintain comprehensive audit trails – something that gets increasingly difficult when data sits in an application that resides in the vendor’s infrastructure.
Additionally, data often does not stay in the applications – instead healthcare users download, save and copy it into other business intelligence tools, creating data sprawl across the organisation and exposing patient privacy to greater risk.
With so many of these tools that are meant to spur growth and more effective care creating compliance challenges, it begs the question: how can healthcare organisations take advantage of the data they have without risking non-compliance?
Yes, healthcare organisations can adhere to regulations while also getting valuable insights from the wealth of data they have available. However, to help do this, organisations must own their data. This means data must be backed up and stored in an environment that they have control over, rather than in the SaaS vendors’ applications.
Backing up historical SaaS application data directly from an app into an organisation’s own secure cloud infrastructure, such as AWS or Microsoft Azure, makes it easier, and less costly, to maintain a digital chain of custody – or a trail of the different touchpoints of data. This not only increases the visibility and auditability of that data, but organisations can then set appropriate controls around who can access the data.
Likewise, having data from these apps located in one central, easily accessible location can decrease the number of copies floating around an organisation, reducing the surface area of exposure while also making it easier for organisations to securely pull data into business intelligence tools.
When healthcare providers have unfettered access to all their historical data, the possibilities for growth and insights are endless. For example, having ownership and ready access to authorised data can help organisations further implement and support outcome-based care. Insights enabled by this data will help inform diagnoses, prescriptions, treatment plans and more, which benefits not only the patient, but the healthcare ecosystem as a whole.
To keep optimising and improving care, healthcare systems must take advantage of new tools like SaaS applications. By backing up and owning their historical SaaS application data, they can do so while minimising the risk to patient privacy or compliance requirements. Having this ownership and access can propel healthcare organisations to be more data-driven – creating better outcomes for everyone.