Is Pfizer Abandoning NYC?
A recent article in the Wall Street Times rocked the pharmaceutical world by claiming that one of the world’s biggest drug companies, Pfizer, will be leaving its longtime Manhattan headquarters. Headline Only Readers grabbed up this tidbit without reading the rest of the article and claimed the company was leaving the city entirely. Chicken Littles, for the win.
In fact, the article simply stated Pfizer would be moving to a new office building. They’re not even leaving the borough, much less the Big Apple. But there is an interesting tidbit buried in the Official Story. While Pfizer has not found new digs yet – and won’t complete the move until at least 2019 in any case – the company has said it plans to lease rather than buy the real estate in NYC.
Is that move a harbinger of the company’s expectation that things in the U.S. medical market are about to change?
That’s not the reason they’re giving for the move. According to various media reports, Pfizer is moving to “bring our building up to modern standards…” which will “…take a significant investment … but in terms of capital investment, that’s not where we want to focus.”
So the company wants to invest in making its working areas more modern rather than pushing money into brick and mortar infrastructure and real property. Fair enough, but is that all? Not exactly. In an internal memo, Pfizer let the other shoe drop, saying a “substantial majority” of the current NYC employees will stay in Manhattan, while others would be relocated to “locations in the tri-state area.”
Does that mean there could be some changes in the works for Pfizer, as well as some difficult management decisions and rough headlines? It’s possible, and that brings us back to the question about the medical industry. American consumers are becoming more cognizant of what drug makers are making, doing, selling and, most importantly, how they’re profiting. If the ACA has done anything, it has made more people aware of what the drugs they use actually cost.
These costs have created a groundswell of negative PR for pharmaceutical companies like Pfizer. From time to time, this negative feeling boils over or, in some cases, explodes in a volcanic firestorm of rage. This is a dynamic the folks at Pfizer, and other drug makers, cannot afford to ignore any longer. They need to prepare for the change that is coming, and the company that guesses best what that change will look like can set itself up to win in the new status quo that is coming sooner rather than later.
