HQ Team
May 24, 2024: Pfizer Inc., announced a $1.5 billion “multi-year” savings plan to cut costs of goods sold, on top of a similar $4 billion initiative unveiled in October last year, when sales of its Covid-19 vaccine plummeted.
“This cost reduction program will span multiple years and is expected to include operational efficiencies, network structure changes, and product portfolio enhancements,” according to a May 22 Securities and Exchange Commission filing.
“Given the complexity in manufacturing and longer lead times required to make changes, this program will be a multi-phased effort.”
Benefits to start 2025
The first phase of the program is focused on operational efficiencies. It is expected to deliver savings of approximately $1.5 billion by the end of 2027 — some of which may begin to be realised in 2025.
The drugmaker expects to record expenses of around $1.7 billion for the first phase of the program, mostly this year, according to the filing.
In October 2023, Pfizer said it would move to eliminate $3.5 billion in costs by the end of 2024. In December Pfizer announced it had added another $500 million to take the savings plan to $4 billion.
Pfizer’s 2023 cost-cutting campaign came amid a sharp drop in demand for its COVID-19 vaccines and antivirals.
In 2023, Pfizer’s Comirnaty and Paxlovid generated a combined $12.5 billion in global sales — a 78% decline from the previous year.
