There's plenty to ponder in the hefty acquisitions two of the world's pharmaceutical giants recently announced. Can Pfizer Inc. CEO Jeffrey Kindler make good on his promise that the $68 billion acquisition of Wyeth will produce an R&D operation that is nimble, productive and better at biotech? Will Merck & Co. CEO Richard Clark find that his plan to buy Schering-Plough Corp. for $41 billion gets tripped up by objections from Johnson & Johnson, Schering's partner on the top-selling arthritis drug Remicade? And Peter Klein wants to know: When 2012 rolls around, will folks in M&A be comparing Dr. Scholl's with Listerine?

Klein, a veteran consumer-products strategist, is aware that consumer health products aren't center stage in these deals -- and that's the point.

Alongside the pharma, biotech and vaccine operations that drove the deals, both targets have attractive consumer brands that will end up as minor parts of the combined companies, which may or may not be best for them.

Wyeth has Advil and ChapStick among others. Schering's brands include Coppertone and Dr. Scholl's, the world leader in footcare. "Dr. Scholl's has great hidden value, strategic and financial," says Klein, who was the strategy and business development chief at Gillette Co. from 2001 to 2005 and is now a consultant.

Hence the comparison with Listerine, which Pfizer got in its 2000 acquisition of Warner Lambert Co. Pfizer's main objective was the half of blockbuster Lipitor that it didn't already own. Listerine seemed a sideshow, so under CEO Hank McKinnell Jr., Pfizer sold it and other brands in 2006 to Johnson & Johnson for $16.6 billion -- nearly 21 times Ebitda. Pfizer looked like a clear winner. Some thought that J&J had overpaid.

But these days the conventional wisdom is that Pfizer blundered in selling Listerine, whereas J&J is smart to be diversified. Now, with the Wyeth deal, Pfizer is getting another crack at consumer products. Will it stay in this time? Kindler hasn't ruled it out, telling investors that he admires J&J's
diversification and decentralization.

Clark, meanwhile, has also said he likes the diversification he's gaining with Merck's first big acquisition. Interestingly, the integration leader on the Schering side is Brent Saunders, head of its consumer businesses.

Could Merck, which has long thought of itself as a science-driven organization, be switching sides in pharma's perennial divide over whether a company that aspires to cure cancer should peddle remedies for foot odor?

The two can be either complementary or contradictory. Consumer products have lower margins and growth, but also a reliable, franchise-like quality because it's so tough to create new ones. Pharmaceuticals have higher margins but less predictability, since inventing new ones is the name of the game.

"The over-the-counter products can round out the portfolio in off years," Klein says, "but they also dilute the profit margins."

What could make the difference is scale. J&J got 25% of its $63.7 billion in 2008 sales from consumer products, along with 40% from pharmaceuticals and 35% from devices. GlaxoSmithKline plc, another pharma giant that has stuck with consumer products, got 16.6% of its $34 billion in 2008 sales from the category.

Pfizer-Wyeth, by contrast, had a combined $70 billion in 2008 sales, compared with $2.7 billion in 2007 sales for Wyeth consumer products. Merck-Schering had a combined $47 billion in sales, compared with Schering's $1.3 billion in 2007 consumer business sales.

No action is likely for a couple of years because of tax considerations, but, eventually, a choice may come: Build the consumer units through acquisitions, or sell to someone with critical mass and a willingness to pay up.

J&J, GSK and Novartis AG will watch closely. Some think J&J could make a deal for Schering's brands to settle a potential dispute over Remicade. Powerhouses such as Procter & Gamble Co. (now building up in OTC health while exiting pharma) and L'Oréal SA (which might love to own Coppertone) will be watching, too.

Klein is eager to see what happens with Dr. Scholl's. In Western Europe and parts of Asia it's owned by SSL International plc, but that still leaves a great franchise.

"It's a great trademark," he says. "High consumer awareness, and it has the aging population working for it. There are a lot of positives."