CLAIM VS REALITY
IN a letter to MPs, Pfizer yesterday tried to ease fears about UK job losses and smooth its planned takeover of AstraZeneca. JAMES SLACK and PETER CAMPBELL examine the claims ... and the reality.
CLAIM: We will keep our word. The commitments we have made (on jobs and investment) are binding under the UK Takeover Code. REALITY: In correspondence with the Prime Minister, Pfizer reserved the right to ‘ adjust these obligations should circumstances significantly change’. Opponents fear this legalistic language provides room to wriggle out of almost anything. When Pfizer bought Wyeth in 2009, then- chief executive Jeffrey Kindler said the deal was not about cost cutting. Five years later, research and development budgets have been slashed and the combined workforce cut from 129,000 to 77,700. CLAIM: We will locate the European business headquarters and regulatory headquarters in the UK. The new company will be committed to meaningful participation in the UK commercial, economic and social community. REALITY: For corporate giants, regional headquarters are almost irrelevant – and can often be little more than a brass plaque on a wall. Starbucks has just shifted its European headquarters from the Netherlands to the UK but said the number of jobs moving would be negligible. CLAIM: Looming patent expiries and near term revenue losses jeopardise the ability of AstraZeneca to stand alone. REALITY: AstraZeneca’s revenues are rising – not falling. Between January and the end of March the drugs giant posted a 3 per cent rise in sales to £3.8billion. The firm says it has a ‘rapidly progressing pipeline’ including four new drugs – two for cancer and two for breathing disorders – at the late stages of development. It says it is quite capable of remaining independent. CLAIM: AstraZeneca’s R&D and innovation hub in Cambridge will be completed. REALITY: Good, but what happens to Pfizer’s research site in Sandwich which – despite 1,700 job losses in 2011 – continues to employ 600? There are doubts as to whether a merged company would use both sites, potentially delivering the final devastating blow to Sandwich. CLAIM: Twenty per cent of the combined company’s R&D workforce will be based in the UK. REALITY: Superficially attractive, but the key question is 20 per cent of what? Mergers inevitably lead to job losses and budget reductions, as the Wyeth deal proved. This year’s research budget is around half the sum spent individually by the two companies, pre-merger. CLAIM: Investing in the UK is attractive to Pfizer for a variety of reasons including the strong skills base of researchers, clinicians and technicians and the strong track record of innovative research. REALITY: By moving to the UK Pfizer will save itself millions in tax every year – a factor it does not mention. The company’s self-proclaimed ‘strong track record’ would be disputed by the thousands of staff who lost their jobs following Pfizer takeovers of Warner-Lambert (2000), Pharmacia (2003) and Wyeth. Its praise of UK researchers and skills is unlikely to impress the workers made redundant at Sandwich. CLAIM: A combination of Pfizer and AstraZeneca would create a UK-based scientific powerhouse that would deliver great benefits to the UK and to patients and science globally. REALITY: The Wellcome Trust, the UK’s largest medical research charity, says the deal will put jobs in peril and could lead to a substantial reduction in R&D activity. Sir David Barnes, a former chief executive of Astra, predicts Pfizer will ‘act like a praying mantis and suck the lifeblood out of their prey’. Former science minister Lord Sainsbury said the deal would be a ‘devastating blow to our profile in the pharmaceutical area’.