Pfizer agrees to buy US rival

In a surprising blockbuster merger that would expand the reach of the world’s largest drug company, Pfizer has agreed to buy US rival Pharmacia for almost €60bn.

The deal announced in the US today would create a company that produces many of the common prescription drugs found in medicine cabinets around the world.

It comes as drug companies are under enormous pressure to keep costs low even as they search for new drugs and face competition from cheaper generic versions of their older ones.

Already the world’s biggest drug company before the deal, Pfizer’s products include Viagra (anti-impotence), Lipitor (cholesterol) and Zoloft (depression), while Pharmacia’s major drug is the arthritis medication Celebrex.

Pfizer have a huge plant in Ringaskiddy, Co Cork, and is one of the region's most important employers.

Pharmacia, meanwhile, makes the Regaine hair products and the Nicorette smoking cessation line.

Pfizer’s over-the-counter products include Listerine mouth wash and Rolaids tablets to Halls cough drops and Visine eye drops.

The new company would have combined annual revenue of €46bn and a research-and-development budget of more than €7bn.

‘‘By combining with Pharmacia, we are ensuring that our core capabilities in the discovery, development and commercialization of new medicines are strong around the world,’’ said Pfizer chairman Hank McKinnell.