Is $2.3 billion really a lot of money?
The Obama administration is touting the action taken this week against Pfizer for illegal promotion of several of its drugs. The $2.3 billion sounds like a lot of money to me, and I suspect most people. Is it really a lot of money or just an annoyance to a large company, just another cost of doing business?
Take a look at Pfizer’s Income and Balance Sheets (see their 2008 Financial Reports ) and a very clear picture appears. Pfizer had net incomes of $8.1 billion in 2008 and 2007 and a whopping $19.3 billion in 2006. They also have cash and short term investments (these are your well-known “quick assets” – meaning they are cash or near cash) on their balance sheets of $26 billion at the end of 2008. Now, look again at the $2.3 billion and the number looks quite different. To those who have watched the stream of pharmaceutical company ethical and legal transgressions over the years, this looks like a very manageable cost of doing business.