“We are not convinced that Pfizer’s bid is anything more than an attempt by a US company to reduce its taxes by buying into a UK-owned company.” Unite national officer Linda McCulloch.
“Pfizer has said it is committed to making a long-term investment in the UK through this purchase. Similar assurances were given to other companies acquired by Pfizer in the US and in Sweden. Subsequently, research facilities were shut down and thousands of high-skilled jobs lost.” Chuka Umunna, shadow Business Secretary.
“We see the future of the UK as a knowledge economy, not as a tax haven.” Vince Cable.
Pfizer sold its UK-based research facilities in Sandwich, Kent, in 2011 with the initial loss of 2,400 jobs, many of which were highly skilled. Pfizer has also closed laboratories of US companies that it has acquired. The company’s track record has raised concerns that it may do the same with AstraZeneca’s research facilities – which many regard as a strategic national asset.
The former chief executive of AstraZeneca told the BBC’s business editor Kamal Ahmed he feared Pfizer would “act like a praying mantis and suck the lifeblood out of AstraZeneca.” Sir David Barnes was chief executive of AstraZeneca until 2000 and deputy chairman until 2002.
Sir David said tax was “one of the key drivers ” behind the Pfizer offer for AstraZeneca, rather than a long-term commitment to research and development. He added:
“That is a very narrow basis on which to base such a massive task.”
“The risk is that the past history of Pfizer has shown that they tend to extract destructive synergies, they have done that in the past.”
AstraZeneca is the UK’s second biggest industrial spender on research and development, investing £2.8bn last year. In the UK AstraZeneca has eight sites and approximately 6,700 employees. Pfizer’s bid for AstraZeneca may be as high as £65bn. Dr Mark Downs, chief executive of the Society of Biology, told BBC News that research and development was critical to the UK.
Critics of the takeover proposal have raised further concerns that Pfizer is trying to acquire AstraZeneca as a way of reducing its tax bill in the United States and as a prelude to breaking up its business into three parts.
If successful, the deal would be the biggest ever takeover of a UK firm by a foreign company. Shares in pharmaceutical company AstraZeneca rose by more than 14% almost immediately after US giant Pfizer confirmed its interest in a takeover bid.
The global pharmaceutical company has reported that its first quarter profit and revenue have slipped compared to the prior-year period thanks to continuing hits from drug patent expirations of some of its most valuable drugs. The expiration of drug patents allow Pfizer’s competitors to manufacture generic forms of the name-brand drugs, which would be an excellent way for our NHS to save money.
Perhaps the $100 billion cash-and-stock offer, from a shareholder’s perspective, is also about obtaining AstraZeneca’s growing collection of patent-protected cancer drugs, a guaranteed cash cow.
As an added bonus, Pfizer can fund the takeover with untaxed foreign revenue and structure the deal as a reverse merger, incorporating the combined group in the UK, which further cuts its American tax bill.
Pfizer and other pharmaceutical companies are reliant on patent laws that grant them a time-limited monopoly on their drugs, especially in the US, the world’s largest and most profitable pharmaceutical market. Drugs are much more expensive in the US than in the UK.
The takeover bid doesn’t offer the UK public anything of benefit whatsoever. This has led both Ed Miliband and Vince Cable, in their concern, to call for the reviewing of terms under which the public interest test could be applied, to protect Britain’s scientific research base.
The history of the pharmaceutical industry certainly suggests that big mergers impede the progress towards new drugs, with research productivity falling. Studies of performance after big mergers in the period 1988-2004 found that in the three years following a business combination, there’s a clear decline in productivity as measured by the filing of new patents. Those companies that have undertaken mergers, when compared to peers that haven’t, not only reduce the amount of money they spend on research and development, but produce less innovative intellectual property.
In September 2009, Pfizer pleaded guilty to the illegal marketing of the arthritis drug Bextra for uses unapproved by the US Food and Drug Administration (FDA), and agreed to a $2.3 billion settlement, the largest health care fraud settlement at that time. Pfizer also paid the U.S. government $1.3 billion in criminal fines related to the “off-label” marketing of Bextra, the largest monetary penalty ever rendered for any crime. This was Pfizer’s fourth such settlement with the US Department of Justice in the previous ten years.
Pfizer does not have a good track record of creating employment, either, contrary to what the conservatives have implied. As previously stated, on February 1, 2011, Pfizer announced the closure of the Research and Development centre in Sandwich, Kent, with the initial loss of 2,400 jobs, causing much damage to the local economy. Pfizer sold its research and development facility in Kent to a private consortium in 2012.
Pfizer bought Warner-Lambert in 2000, makers of the anti-cholesterol drug Lipitor, in a deal worth around $111.8 billion, making it the world’s second biggest pharmaceutical firm. Soon after, it was announced that hundreds of workers would lose their jobs, equating to 10% of the combined workforce. Pfizer paid $68bn for Wyeth, the US maker of Effexor, an antidepressant, and Prevnar, a child meningitis vaccine in 2009. The US drug giant then unveiled nearly 13,000 job cuts in the first year after the process and the closure of eight factories. By the end of 2013, 33,500 jobs had been cut.
Osborne and Cameron claim that securing British jobs are the Government’s “sole interest” in supporting Pfizer’s merger bid, but that claim doesn’t stand up to scrutiny. Miliband is quite right to warn that he has “grave reservations” about the deal, based on the evidence that Pfizer has left in their wake.
Martin Gilbert, who heads Aberdeen Asset Management, told BBC Radio 4’s Today programme: “We do have to look at this in UK terms because it is so important for our research and development in the UK, and Pfizer unfortunately has this reputation of being ruthless cost-cutters.”
Ed Miliband accused the government of “cheerleading” for Pfizer and called for an independent assessment of whether a takeover would be in Britain’s national economic interest. In the long term Pfizer have demonstrated that they are heavily orientated toward profitability, and not profitability through new research, but profitability from cost cutting.
Labour introduced a public interest test in 2002 allowing governments to block takeovers on three specific grounds: media plurality, national security or financial stability. Miliband says he wants to widen the test to include strategic importance, to cover areas such as science and technology. Speaking on BBC One’s The Andrew Marr Show, Mr Miliband called for an independent investigation into the takeover, and its likely impact on the “long-term science and industrial base of this country” and vowed to widen the scope of the public interest test allowing governments to block deals, if he becomes prime minister.
So why would the Tories be so intent on cheerleading a “business” move that clearly would not benefit the UK?
Here is an enlightening list of the keen (and already profiting) Conservatives with financial and vested interests in AstraZeneca and Pfizer:
Sir Alan Parker: who has holidayed with Mr Cameron and received a knighthood in the New Year honours list, is spearheading the UK lobbying operation for Pfizer’s controversial £63 billion bid. The lobbyist friend of David Cameron is at the heart of the bid by the American multinational Pfizer to take over British rival AstraZeneca.
Nick de Bois: the majority shareholder in Rapier Design Group, an events management company heavily involved with the private medical and pharmaceutical industries, and whose clients include leading names such as AstraZeneca. The company was established by the Tory MP in 1998. Last year it had a turnover of £13m. Last April, Rapier Design purchased Hampton Medical Conferences to “strengthen the company’s position in the medical sector”. It is involved in running conferences and other events for private-sector clients, and for NHS hospitals.
Dominic Grieve: in 2008. Shares in Reckitt Benckiser, GlaxoSmithKline, Diageo, Astrazeneca, Standard Chartered (Health insurance.)
Damian Collins: between 1999 and 2008 Mr Collins worked for marketing agency M&C Saatchi. M&C Saatchi clients include PPP healthcare, AXA insurance, Astrazeneca, Pfizer and Merck. See Lord Saatchi. In 2008 he joined Lexington Communications as a senior Counsel before leaving to become a MP. Lexington Communications have a healthcare section, which says ‘With the NHS never far from the headlines, our dedicated team of healthcare communications consultants can advise you on how to successfully interact with a diverse range of stakeholders – in Westminster, Whitehall, the reformed NHS, across the patient group community and in the private sector – to help achieve your goals… Help you build relationships with influencers at a national level.’
Liam Fox: former Conservative MP – became shadow health secretary in 1999 – employs Adam Werrity as a paid intern in 2004 – by this time Adam Werrity becomes a director of health consultancy firm ‘UK Health Ltd’ (now dissolved), while Liam Fox was shadow health secretary of which he and Liam Fox were shareholders. Werrity owned 11.5% of UK Health Group and Fox owned 2.3%. In 2005 a researcher based in Mr Fox’s office worked ‘exclusively’ for the now closed Atlantic Bridge ‘charity’, which Liam Fox was the founding member; Mr Werrity became director, and which had links to radical right-wing neocons in the US. The researcher received funding from Pfizer Inc. He claimed ‘she has no function in any health role.’ The researcher was Gabby Bertin, who is now David Cameron’s press secretary. Received £5,000 to run his private office in October 2012 from investment company IPGL limited, who purchased healthcare pharma company Cyprotex.
Frances Maude: was a non-executive director of, is a web management software provider called, Mediasurface, whose product Morello CMS is used by Astrazeneca and the NHS. The company was acquired by content management solutions, Alterian, in 2008.
Priti Patel: worked for drinks company Diageo, before joining Weber Shandwick, becoming a director of public affairs. Weber Shandwick was created and built by Lord Chadlington and has a specialist healthcare focus with companies including Astra Zeneca, Pfizer, and Roche, and also the NHS.
Lord Ashcroft: Chairman of Chime Communications Group, whose companies include Bell Pottinger, and whose lobbying clients include Southern Cross, BT Health and AstraZeneca.
Lord Bell: also Chairman of Chime Communications group, whose companies include Bell Pottinger, and whose lobbying clients include Southern Cross, BT Health and AstraZeneca.
Lord Glendonbrook: has shares in Ansell Ltd NPV (healthcare), Abbott Laboratories, supplies NHS with Lab equipment, reagents. Shares in Astrazeneca biopharaceuticals – The NHS is the primary customer for Astrazeneca medicines in the UK. Shares in GlaxoSmithKline Ord 25p (healthcare), GlaxoSmithKline (healthcare), Johnson & Johnson, which supplies the NHS. Shares in Novartis who threatened to pull out of the UK becaue the NHS safety trial rules. Shares in Novo Nordisk (pharmaceuticals) supplies NHS, shares in Pfizer Inc (pharmaceuticals) supplies NHS. Shares in Serco group, which has multiple contracts with NHS including PFI hospitals. Shares in Siemens AG, which supplies medical equipment to the NHS. Shares in Smith & Nephew, hip-replacement and bandaging group. Unilver plc, whose European venture capital arm Unilever Ventures joined with a company called Vectura to form a pharma arm to their company.
Earl Howe: was a patron of pro-market health think tank 2020health up until the election. The rules allow patronage without the need to register. 2020health have produced multiple publications sponsored by the likes of Pfizer, Tunstall and other healthcare companies. They have a membership list that is hidden. There are currently four patrons of 2020health – who all have healthcare links
Baroness James: has shares in AstraZeneca (pharmaceuticals). The NHS is the primary customer for Astrazeneca medicines in the UK. GlaxoSmithKline plc (healthcare) supplies the NHS. Shares in Reckitt Benckiser Group plc, which produces drugs for the NHS amongst other health institutions.
Lord Lloyd-Webber: has shares in Catlin Group Limited, began writing Healthcare Professional Liability insurance in London in 1994. They offer extensive knowledge of medical, healthcare and pharmaceutical markets. Shares in Smiths Group plc, which produces medical equipment. Shares in AstraZeneca (pharmaceuticals). The NHS is the primary customer for Astrazeneca medicines in the UK
Baroness Noakes: has shares in BT Group (communications), which is one of the largest suppliers of communications to the NHS. BT was involved in the failed NHS computer system overhaul. Shares in Astrazeneca (Pharmaceuticals)
Lord Saatchi: a partner and shares in M&C Saatchi plc – a marketing company. Involved in multiple campaign projects for the government including the Change4Life project aimed at promoting healthier living to tackle obesity. M&C Saatchi also worked for PPP healthcare, AXA insurance. Saatchi have multiple pharmaceutical clients, including; Astrazeneca, Pfizer and Merck.
Baroness Wheatcroft: business Consultant, DLA Piper (legal services) a global law firm providing lobbying services to “clients in the health and social care sectors”. DLA Piper, which advised ministers on the failed £12 billion IT project for the NHS. Member of the Advisory Board, Pelham Bell Pottinger (financial and corporate communications) – Bell Pottinger whose lobbying clients include Southern Cross, BT Health and AstraZeneca.-
Cameron often inadvertently signposts the coming of a diabolical lie with the phrase “let me be clear”, as we know. We also know that so-called anonymisation of data offers no protection at all to identities and personal details. Campaigners described the plan as an”unprecedented threat” to confidentiality, Health Secretary Jeremy Hunt says, rather worryingly, that it will be a boon to research.
It’s common knowledge that many Coalition MPs and Peers are heavily financially invested in pharmaceutical and health care companies. Over 200 parliamentarians have recent past or present financial links with, and vested interests in companies involved in healthcare and all were allowed to vote on the Health and Social Care Bill. The Tories have normalised corruption and made it almost entirely legal. Our democracy and civic life are now profoundly compromised as a result of corporate and financial power colonising the State, and vice versa.
The Health and Social Care Bill, 2012, has a telling insert: The Secretary of State’s duty as to research, which is “In exercising functions in relation to the health service, the Secretary of State must promote – (a) research on matters relevant to the health service, and (b) the use in the health service of evidence obtained from research”.
And also very worryingly: (1) The National Patient Safety Agency is abolished. (2) The National Patient Safety Agency (Establishment and Constitution) Order 2001 (S.I. 2001/1743) is revoked. (3) In section 13 of the NHS Redress Act 2006 (scheme authority’s duties of co-operation), omit subsection (2).
Perhaps this exploitative move comes as no surprise – Jobseekers are being coerced into experimental drug trials dressed up as “job opportunities”
Special thanks to Robert Livingstone for his brilliant memes.
Thanks to Social Investigations for providing the original list of MPs financial links to private healthcare.
Many thanks to my friend Sarah Homer for inspiring this by always asking the right questions.