The proposed merger between Pfizer and Allergan would create a $150 billion global behemoth touching virtually every aspect of modern medicine.
One of the drugs frequently cited in discussions of the merger is Botox, the Allergan product used to reduce wrinkles in our skin. With one billion people over age 60, the market for healthy looking skin is huge and growing – there will be more than two billion of us over 60 by 2050.
Botox is often seen as an affluent luxury, but healthy skin is important to all aging populations. As the World Health Organization noted in its most recent report on aging (pdf here), skin health is an essential part of any serious health strategy as millions of people reach their 80s, 90s and beyond as a matter of course.
The WHO is calling for a shift in health policy, from the 20th century focus on combating disease to one dedicated to achieving functional ability for aging populations. WHO reminds us that in the decade 2020-2030 the world’s population will tip to more old than young, a condition already present in the developed OECD countries. In this new paradigm, fiscal sustainability and economic growth are only possible if we also transform our expectations of aging to embrace engagement, activity, work and contribution.
As the demographics shift, we need a new 21st century approach to aging in such areas as skin, vision, hearing and muscle/bone mass. One way to get there is to treat as friends, partners and collaborators the companies who are at the center of the medical innovation that will fuel the functional ability we seek. The Pfizer-Allergan Deal is happening precisely because there is a good management strategy to return more value to shareholders and in the process enable the resources for R&D that will give us the tools for a healthier and more active longevity.
If moving an official tax address from 42nd Street in Manhattan to Technology Park, Dublin, delivers that opportunity to the tune of tens of billions, why wouldn’t Pfizer’s CEO Ian Read make that decision -- and why wouldn’t we applaud it? How is it any different from the multitude of decisions we observe across industries and sectors where decision are being made that will benefit society, especially critical during this transformational moment characterized and driven by the demographic force of longevity and population aging?
Other companies are climbing aboard. Nestle is expanding its reach in skin health as part of its strategy to meet the needs of an aging population. And Intel is investing in innovative technology to enable telehealth for remote patient monitoring, a benefit to all of us, over and under 60, who will no longer have to travel to doctors’ offices or hospitals for many diagnoses and treatment advice.
What all these companies have in common is their appreciation of the huge consumer need for products and services connected to our aging societies. The value this creates for shareholders comes from such strategic insights applied to the marketplace. We should welcome all of this, whether their company addresses are in New York, Dublin or Timbuktu.