- The Washington Times - Friday, March 20, 2009

NEW YORK (AP) - With Pfizer Inc. about to acquire rival drugmaker Wyeth and its expertise in making pricey and complex biologic drugs, Pfizer CEO Jeffrey Kindler strongly supports allowing generic versions of them.

“Done right, with regard to the safety of the products, biological follow-ons are a very appropriate thing to do,” he said in an interview Wednesday with The Associated Press. “We support that, especially because we’re now buying a large biotech operation.”

Wyeth’s biologic products include the blockbuster arthritis medicine Enbrel, cancer drug Mylotarg and hemophilia treatments BeneFix and ReFacto. Pfizer has 17 biologic drugs in development but sells only one, Macugen for macular degeneration.

Top drugmakers are piling into this area because biologic drugs, made in living cells, can cost $1,000 and up per month and so far haven’t faced lower-price generic competitors. But legislation was introduced last week to create a pathway for regulators to approve what have been called “biosimilar” drugs, and President Obama has been touting the idea as one way to control health care costs.

Kindler said Pfizer’s increasing expertise in the area “could provide us with an opportunity to make biologic follow-ons” of its own, Wyeth’s and possibly rivals’ biotech drugs.

He also backs government-sponsored research comparing drug effectiveness, unlike many in his industry concerned that could cut into sales.

“I’m certainly for the idea of providing a way to evaluate the comparative effectiveness of different kinds of treatments,” including medicines, hospitalization and lifestyle changes, he said.

Kindler called it “an area with a lot of promise, if it’s done right,” openly, and not “driven entirely by cost considerations but rather by considerations of value.”

His somewhat contrarian views come as the drug industry is in upheaval, forced to slash jobs and other costs as a tidal wave of generic competition to 1990s’ blockbuster pills cuts revenues while research operations aren’t producing nearly enough replacements. Those two trends are behind the recent flurry of mergers including Pfizer’s.

Meanwhile, the Obama administration is promising to revamp the nation’s health care system to help the 48 million Americans without health insurance. Such an overhaul could boost drug sales if millions more people get insured, but could hurt drugmakers if they lose pricing power.

Kindler was the only chief executive from the drug industry at the White House summit on health care reform two weeks ago.

“We have an obligation as an industry to participate (in reform) and try to contribute to the solution of these problems,” said Kindler, who travels frequently and has been discussing reform ideas with patient, doctor, nurse, labor and business groups.

Among other changes, he supports more emphasis on preventive care and expanding government insurance to more people. And Kindler says it makes more sense to support beneficial changes than just to block ones the industry doesn’t like.

As Pfizer and Wyeth prepared to combine late this year, Kindler said his top personal priorities are picking the right leaders and maintaining research productivity, an area where he concedes his company and others have failed during prior mergers. He’s also insistent that as few people as possible work on integration so everyone else can keep the two companies running smoothly.

“Integration planning is going very well,” he said.

To avert the problems of past tieups, he said he plans to make key decisions soon and carry them out right after closing the $68 billion deal, set for late this year. One issue already tackled was replacing short-term financing for part of the deal with long-term bonds, with lower fees and interest rates, sold this week.

Still to be decided: which facilities stay open, which employees will be among the nearly 20,000 slated for layoffs, and which programs and experimental drugs get more resources _ or less.

Martin Mackay, Pfizer’s global head of research and development, is focusing on the last issue, trying to decide how to put together the two companies’ research portfolios. Mackay, who was at Pfizer when it absorbed Warner-Lambert Co. in 2000 and Pharmacia Corp. in 2003, said he’s learned from mistakes made then and now knows “what decisions you need to make in what order.”

More importantly, he said, with those deals “we accepted that we would take productivity hits” in drug development, and that’s what happened.

“This time I’m saying something totally different _ I won’t accept any productivity hits,” Mackay said.

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