Viagra Maker Pfizer to Expand Memphis, Tenn., Operation
Laurel Campbell, The Commercial Appeal, Memphis, Tenn.
11/06/98
KRTBN Knight-Ridder Tribune Business News: The Commercial Appeal, Memphis, Tenn
Knight Ridder/Tribune Business News
Nov. 6--Don Witherspoon is proud of his company. But now when he's out in public, he tends to cover up the Pfizer logo on his shirt.
"Wearing it attracts a lot of attention," Witherspoon said.
These days, Pfizer stands for Viagra .
The pharmaceutical company's history dates to 1849, and its drugs treat infections, heart conditions and diabetes.
But none of those prescription drugs made news like Viagra , launched this year as the first pill to treat erectile dysfunction, or impotence.
"We got the visibility, all right," said Witherspoon, director of logistics at Pfizer's Memphis logistics center. "When you're on Jay Leno every night, on the cover of USA Today, and there are ads for 800-numbers to get Viagra . . .
" Viagra is just another health care product we have in our stable," Witherspoon said.
Pfizer's Memphis operations played a vital role in making Viagra the most successful prescription drug ever launched.
Two functions are housed at the soon-to-be-expanded facility in Shelby Oaks Industrial Park -- the national customer service center and the largest of Pfizer's three U.S. distribution centers.
Now construction is under way to expand the distribution center and add office space to house a 50-employee accounting group being transferred from Pfizer headquarters in Manhattan.
"After our startup was successful, other operations started looking at Memphis," said Witherspoon, who opened the logistics center in May 1995.
When the $15 million expansion is finished and staffed in February, Pfizer will employ about 300 people in Memphis.
The Viagra launch, which earned Pfizer the best new product introduction award from the National Wholesale Druggists Association, set a speed record -- 10 days from approval by the Food and Drug Administration to filling orders.
"Three to four weeks was the previous standard," said Oscar Perez, manager of customer service at the Memphis logistics center.
"What was unique about Viagra was consumer demand. Customer service got lots of calls well in advance of the launch," Perez said. "As part of the launch strategy, customers could place planned (advance) orders."
Pfizer's customers are primarily drug wholesalers. Those companies then sell to retail and hospital pharmacies.
One of Pfizer's biggest customers is McKesson Corp., the nation's largest drug wholesaler, which has its regional distribution center in Memphis.
"Every Friday, I get two to three truckloads from Pfizer," said Charles Harbour, McKesson's regional distribution cen ter manager. Those trucks need only to travel south across Memphis to the McKesson warehouse on Crumpler in the Hickory Hill area.
At his center, Harbour gathers products from a number of drug companies and ships orders to 38 smaller McKesson Drug Co. distribution centers. One of them is next door to him on Crumpler.
Those distribution centers fill orders for pharmacies.
McKesson, too, is expanding its 4-year-old Memphis distribution center to handle increased business, including a new customer, Rite Aid.
"McKesson came to Memphis for transportation reasons," Harbour said. "With FedEx here, we can ship out 500 to 600 packages a night and get them to customers the next day."
And now McKesson has helped attract another huge pharmaceutical company to Memphis. Glaxo Wellcome has purchased land in southeast Shelby County for a 120,000-square-foot distribution center.
Pfizer's Memphis logistics center also collects, stores and ships the company's line of animal health drugs and its consumer products, including Barbasol shaving cream, Ben Gay analgesic ointment, Desitin diaper rash cream and Visine eye drops.
Pfizer's orthopedic implants company, Howmedica, also ships from Memphis.
Pfizer plans to sell Howmedica to Stryker Corp., but Witherspoon said no layoffs at the distribution center will result.
Pfizer is the third-largest pharmaceutical company in worldwide sales, behind No. 1 Merck & Co. and Glaxo Wellcome.
In the first nine months of this year, Pfizer earned $2.7 billion, or $2.06 a share, on revenues of $9.7 billion. In 1997, profits totaled $2.2 billion, up 15 percent from the year before. Revenues were $12.5 billion, up nearly 10 percent.
Pfizer shares closed Thursday at $107.371/2, up $1.371/2, on the New York Stock Exchange.
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