Pfizer, the U.S.-based pharmaceutical giant, has announced an upward revision of its full-year profit outlook, citing strong progress in its cost-cutting initiatives and ongoing political pressure from U.S. President Donald Trump to reduce drug prices.
On Tuesday, Pfizer increased its guidance for adjusted earnings per share by $0.10, setting a new range of $2.90 to $3.10. This revised forecast takes into account a one-time cost related to its licensing deal with Chinese biotech firm 3SBio, signed earlier this year. Following the announcement, Pfizer shares rose 5.2% on the New York Stock Exchange.
Multi-Billion-Dollar Cost-Saving Plan
The company is currently implementing a multi-year cost-cutting strategy, launched in 2023, with the aim of achieving $7.2 billion in savings by the end of 2027. This focus on cost control has become a key lever for driving profitability, especially as Pfizer transitions from being a top-line growth company to a margin-focused operation.
Daniel Barasa, portfolio manager at Gabelli Funds, commented:
“We expect Pfizer will continue to be a margin story over the next few years. The emphasis on cost management remains central to its performance.”
Pfizer’s long-term prospects are also supported by a strong pipeline of potential blockbuster drugs, notably from its $43 billion acquisition of Seagen in 2023.
Political Pressure on Drug Pricing
Pfizer’s updated guidance also reflects potential financial implications from President Trump’s ongoing efforts to curb U.S. healthcare costs. On July 31, Pfizer was among 17 pharmaceutical companies to receive letters from the President, demanding “binding commitments” to lower drug prices.
As part of its response to political and public pressure, Pfizer announced a partnership with Bristol Myers Squibb in July to begin selling a popular blood-thinner medication directly to U.S. consumers at a 40% discount, starting in September.
The move aligns with Trump’s broader push for direct-to-consumer pricing models aimed at bypassing intermediaries and reducing costs for patients.
While the long-term viability of such initiatives remains uncertain, investment bank TD Cowen noted:
“It’s unclear whether direct purchasing will become a lasting trend or is merely a gesture to demonstrate the industry’s willingness to respond to affordability concerns.”
Investor Sentiment and Market Outlook
Despite the improved profit guidance, Pfizer’s stock remains down 8% year-to-date. The company has faced additional investor scrutiny following a significant investment by activist hedge fund Starboard Value, which acquired a $1 billion stake in October but has since reduced its holdings, according to recent regulatory filings.
In a shifting political and financial environment, Pfizer appears committed to navigating pricing reform, regulatory scrutiny, and investor demands—all while restructuring internally to maintain profitability and long-term growth.
