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Pfizer (PFE) Forced To Lock Workers Out Of Plant In India

8/5/2014 6:08:21 AM

Pfizer Locks Out Mumbai Workers In Apparent Benefits Dispute Pfizer Locks Out Mumbai Workers In Apparent Benefits Dispute

August 5, 2014
By Mark Terry, Breaking News Staff

Pfizer Ltd, the Indian business unit of U.S. drugmaker Pfizer (PFE), recently announced it had locked out its staff of 212 from its Thane drug factory in Mumbai, India. The company indicates in a statement this is in response to “multiple incidents of indiscipline, threats to our management personnel as well as attempts to disrupt production lines by certain workmen.”

Although details are hard to come by, a member of the Pfizer employees union stated that for the last six years they have been attempting to negotiate salaries and medical coverage. This suggests the disruptions are related to union activities. A Pfizer spokesman, however, stated that the current lockout does not have anything to do with the negotiations, but due to subjudice legal restrictions, cannot comment further.

The lockout notice is a legal provision that gives both sides of the disagreement two weeks to solve the issue. If not resolved in that period, the plant could be shut down or turned over to the courts.

The Thane factory manufactures formulations, i.e., finished forms of drugs. Both company representatives and union representatives indicate that the factory is currently not active, although it’s not clear for how long this has been true. This supports speculation on the part of an unnamed union representative that Pfizer might sell off the factor to so-called “land-sharks,” or real estate companies.
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Pfizer currently only has two factories in India, the Thane plant and another in Goa, which is operated by Wyeth, now part of Pfizer. In 2009 Pfizer acquired Wyeth for $68 billion. Pfizer’s strategy was once to operate a manufacturing plant in every country, although the current strategy is to contract manufacturing through third parties.

Although purely speculation, it’s not unprecedented. In 2004 Pfizer sold its Ankleshwar plant in Gujarat to Anodyne Remedies India, and in 2007 sold its Chandigarh facilities to CSJ Infrastructure.

India is the second-largest supplier of drugs to the U.S., with 70 to 80% of its market made up of generic brands. Its pharmaceutical market is projected to reach between $20 and $24 billion by 2014, according to a McKinsey & Company report. However, the FDA has had problems with safety violations with Indian manufacturing companies, with Indian companies sometimes developing two-tiered systems of controls: One plant to serve the U.S. market, another to supply generic drugs to the U.S. and everywhere else, with different quality controls for each.

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