A multibillion-dollar merger between GlaxoSmithKline (GSK) and Pfizer’s consumer unit combined two very large drug and healthcare businesses into one. When the merger was announced in December 2018, the companies said they were projecting combined sales of $12.7 billion a year. The merger unites each of the drug companies’ top-selling consumer products. For Pfizer, that includes products like Centrum and Caltrate, and for GSK, Nicorette and Excedrin.

GSK has its headquarters in Britain and, as part of the merger, they own more than two-thirds of the new company. Pfizer kept the remainder of the shares.

As part of the announcement of the merger, GSK said the company plans to break off into two consumer healthcare businesses and list them in London within three years. When GSK first announced the merger, shares went up more than 7% in London.

Why Did Pfizer Make the Move?

Pfizer had been looking to eliminate its consumer healthcare business, which focuses on manufacturing over-the-counter drugs. Before the GSK merger, Pfizer company representatives weighed either completely selling the business or spinning it off as a separately traded stock. For Pfizer, most of the billions of dollars it makes come from the prescription drugs unit, which sells drugs like Lyrica and Viagra.

For GSK, this was the second major deal announced within a few weeks. The first was the sale of most of its nutrition business in India, and that deal was worth almost $4 billion.

The merger is still pending antitrust approval. If it receives that approval, this deal would result in the creation of the biggest over-the-counter medicine company in the world.

There have been headwinds for the deal, however, with GSK having to address concerns from the European Union regarding antitrust. GSK offered concessions, and soon the EU will issue a decision as to whether they’ll accept this proposal, or open a full-scale investigation.

GlaxoSmithKline Consumer Healthcare Marketing Restructuring

While the initial deal between GlaxoSmithKline and Pfizer was announced at the end of 2018, there were updates to the merger. GSK Consumer Healthcare is working to change and restructure its marketing, media and digital units ahead of the finalizing of the deal with Pfizer, which is expected later this year.

The current head of marketing at GSK Consumer Healthcare, Carlton Lawson, is leaving and being replaced by Tamara Rogers.

Rogers will take over the lead of eight new category heads within the consumer healthcare business. Rogers is also going to take the reins on the media spending for the company, which is estimated to have a value of $1.7 billion.

There will be four new global marketing leaders under the leadership of Rogers. Categories include oral health, cold and flu and allergy, dermatology and wellness and pain relief.

This merger represents a significant shift in the consumer drug production structure. With such a large company controlling a significant portion of the over-the-counter drugs found in most home medicine cabinets, there could be impacts felt by the population of the United States and abroad. There will also be changes in how over-the-counter drugs are marketed as a result of the pending transaction, which could also affect consumers.

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