15 May 2014
Pharma giants Pfizer and AstraZeneca (AZ) have been questioned by Parliamentary committees over a proposed bid for a merger.
On 13 and 14 May 2014 the Business, Innovation and Skills Committee and the Science and Technology Committee questioned the two pharmaceutical companies regarding the proposed merger bid.
The aim was to examine the best interests for the UK economy, British workers employed by AZ and pharmaceutical industry research and development. Having offered two bids for AZ, US-headquartered Pfizer has been questioned about its motives and future plans for the merged company and the fate of AZ’s British operations, in particular its R&D capabilities.
Concerns have been raised during this process about the future of jobs and R&D at AZ should the merger go ahead, After initially denying that it will downsize and restructure AZ should the merger go ahead, Pfizer Chief Executive Ian Read finally admitted that some jobs loses and R&D cuts would result.
In 2011 Pfizer announced the closure of the biggest pharmaceutical research facility in the UK based in Sandwich. As a result of heavy criticism the company went back on its decision of total closure and kept on 600 staff, from a total of 2400. However this downsizing of Pfizer’s operations in the UK was cited by those opposed to the merger as an illustration of what the current bid could mean for British employees.
As well as fear of job cuts and reduced R&D, AZ expressed that it is an independently successful and competitive company that does not need to merge to continue and grow. AZ’s Executive Vice President Dr Menelas Pangalos told the Science and Technology Committee that its pipeline was very strong and that a merger would be substantially disrupt this, which could delay important drug production and research.
He added that merging two companies that are both structurally and geographically diverse would in itself be detrimental to the work AZ is doing.
The Science and Technology Committee wrote to the Science Minister David Willetts MP to express its opinion on Pfizer’s proposed takeover of AZ. The letter indicates that further ‘longer-term guarantees need to be obtained before [they] can be confident of Pfizer’s commitment to the UK’ and questions whether Pfizer can be held to account on any commitments.