Pfizer sees $1.7B of costs in 2024 from first phase of program

In Q2, Pfizer announced it is launching a multi-year program to reduce its cost of goods sold. The cost reduction program will span multiple years, and is expected to include operational efficiencies, network structure changes, and product portfolio enhancements, the company said today in a regulatory filing. “Given the complexity in manufacturing and longer lead times required to make changes, this program will be a multi-phased effort,” it added. The first phase of the program is focused on operational efficiencies and is expected to deliver savings of approximately $1.5B by the end of 2027, some of which is expected to begin being realized in 2025. The one-time costs to achieve the savings associated with the first phase of the program are expected to be approximately $1.7B and primarily include severance and implementation costs. These costs will be recorded primarily in 2024, with cash outlays expected in 2025 and 2026.