Pfizer Inc. (the
, which may be referred to as
) is a
research-based, global pharmaceutical company. We discover, develop,
manufacture and market innovative medicines for humans and animals and many of
the worlds best-known consumer products.
Our home page on the Internet is at www.pfizer.com. You can learn about
us by visiting that site.
Note that throughout this 2000 10-K report, we incorporate by reference
certain information in parts of other documents filed with the Securities and
Exchange Commission (SEC). The SEC allows us to disclose important information
by referring to it in that manner. Please refer to such information.
On June 19, 2000, we completed our merger with Warner-Lambert Company. As
a result of this merger, each share of Warner-Lambert common stock issued and
outstanding, other than shares owned directly or indirectly by Warner-Lambert,
was converted into the right to receive 2.75 shares of Pfizer common stock.
The merger qualified as a tax-free reorganization and was accounted for as
a pooling of interests. We restated all prior period consolidated financial
statements of Pfizer to include the results of operations, financial position
and cash flows of Warner-Lambert as if we had always been merged.
We operate in two business segments:
prescription pharmaceuticals for treating cardiovascular
diseases, infectious diseases, central nervous system disorders,
diabetes, erectile dysfunction, allergies, arthritis and other
products for food animals and companion animals, including
parasiticides, antibiotics, vaccines and other veterinary items;
the manufacture of empty hard-gelatin capsules.
which includes self-medications, shaving
products and fish food and fish care products, as well as
confectionery products consisting of chewing gums, breath mints
and cough tablets.
These businesses derive synergies in certain research and regulatory
matters, but each requires different marketing and distribution strategies and
sales organizations. Comparative segment revenues, profits and related
financial information for 2000, 1999 and 1998 are given in the table entitled
on page 67 of our 2000 Annual Report. Tables captioned
Percentage Change in Revenues
Revenues by Business Segment
on page 31 of
our 2000 Annual Report give segment information over the past three years. The
information from those sections of our Annual Report is considered to be
incorporated in this 2000 Form 10-K report.
Our businesses are heavily regulated in most of the countries where we
operate. In the U.S., the main regulatory authority we deal with is the Food
and Drug Administration (FDA). The FDA regulates the safety and efficacy of
the products we offer, our research quality, our manufacturing processes and
our promotion and advertising. Similar government authorities exist in most
other countries, and in many cases also regulate our prices. See
Regulation and Price Constraints,
Our Pharmaceuticals segment includes our human pharmaceuticals and animal
health businesses, as well as Capsugel, a capsule manufacturing business.
Most of our human pharmaceutical revenues come from products in three
major therapeutic classes: cardiovascular diseases, infectious diseases and
central nervous system disorders. We also have products for the treatment of
diabetes, erectile dysfunction and allergies, as well as a copromoted product
for arthritis. In 2000, human pharmaceutical revenues of approximately $23
billion contributed 76% of our revenues, as compared to 74% in 1999 and 71% in
1998. In 2000, we had eight human pharmaceutical products, including our
with sales to third parties of $1 billion or more
each. The eight products with sales in excess of one billion dollars
Norvasc, Zoloft, Neurontin, Celebrex
representing 74% of human pharmaceutical revenues in 2000, grew at a combined
annual rate of 23%. A table captioned
Revenues Major Human Pharmaceutical
on page 31 of our 2000 Annual Report is incorporated by reference.
Cardiovascular disease products that treat problems affecting the heart
and the blood circulatory system make up our largest therapeutic product line.
our largest- selling product, is for treatment of high lipids
(cholesterol and triglycerides) in the bloodstream. It is the most-prescribed
cholesterol-lowering drug and the second-largest-selling drug in the world. In
2000, we launched
in Japan, our second-largest market.
once-a-day medication for hypertension (high blood pressure) and angina (heart
pain). It is the largest-selling high blood pressure medicine in the world.
Our other cardiovascular products include
is a once-a-day product for hypertension and
angina. Sales of
continued to decrease during 2000 due to the
introduction of new generic competition in 2000.
is used to treat
hypertension and benign prostatic hyperplasia (enlarged prostate gland). Sales
in 2000 were impacted by the expiration of the U.S. patent in
is an angiotensin converting enzyme (ACE)
inhibitor for hypertension and congestive heart failure.
In the infectious disease medicine category, our major products are
is an oral or injectable
antibiotic. During 2000,
was the largest-selling antibiotic in its
class worldwide and third-largest-selling antibiotic overall. In the U.S., it
was the leading brand-name antibiotic. Sales of
increased in 2000
due to the increasing recognition by physicians of the products effectiveness
in treating a broad array of infections. In 2000, we launched
Japan, our second-largest market.
is used to treat various fungal
infections, including vaginal infections and certain infections that afflict
AIDS and cancer patients with weakened immune systems.
is the worlds
largest-selling protease inhibitor, used in combination with other
antiretroviral drugs for treatment of HIV infections. Sales of
declined in 2000 largely due to increasing competition from other AIDS
medicines and the increasing level of manufacturing responsibility for the
product being undertaken by Hoffmann-La Roche, Ltd., for its own markets
outside North America.
In June 1999, the European Unions Committee for Proprietary Medicinal
Products suspended the European Union (EU) licenses of the oral and intravenous
formulations of our antibiotic
for 12 months. The suspension has since
been made permanent. In the rest of the world, including the U.S., the use of
is limited to serious infections in institutionalized patients (see Item
For treatment of central
nervous system disorders, we offer
and copromote the product
is approved for the
treatment of depression, obsessive-compulsive disorder, panic disorder and
post-traumatic stress disorder.
is a leading epilepsy medicine,
approved as an add-on therapy with other anti-epileptic medications to treat
partial seizures. It was broadly approved in Europe during 2000 for the
neuropathic pain. In April 2000, we received a new patent in the
U.S. for unique, stable formulations that contain the required low-lactam level in
, for the treatment of mild-to-moderate Alzheimers disease,
with Eisai Co., Ltd., the company that discovered and developed the compound.
Eisai contracted with us to license and copromote the product in the U.S. and
several other countries.
substantially expanded the prior market for
pharmaceutical treatment of that disease.
In October 1999, we received an approvable letter from the FDA for
a treatment for migraines. We submitted additional data to the FDA in response
to requests in the approvable letter. In the fourth quarter of 2000, the FDA
sent us a new approvable letter, in which we were asked to conduct an
additional, short-term cardiovascular physiology study. We expect to perform
and file this study in 2001.
In February 2001, the FDA approved the oral dosage form of ziprasidone, an
antipsychotic for the treatment of schizophrenia. In March, we received an
approvable letter for an intramuscular (injectable) form of ziprasidone. We
expect to introduce ziprasidone in the U.S. in 20 mg., 40 mg., 60 mg., and 80 mg.
capsules in March 2001. We intend to market both forms of ziprasidone under
the trade name
In 1998, we introduced
, our oral medication for the treatment of
erectile dysfunction. To date, more than 300 million
tablets have been
prescribed for more than 10 million men in more than 100 countries.
Our other major pharmaceutical products include
, for the
treatment of diabetes, and
which is used for the treatment of allergies
and related problems.
is licensed to us by the Belgian company UCB S.A.
for sales in the U.S. and Canada. We copromote
in the U.S. with a
subsidiary of UCB S.A.
In February 1999, we participated in the launch of
Searle & Co., a division of Pharmacia Corporation, the discoverer and developer
is used for the relief of symptoms of adult rheumatoid
arthritis and osteoarthritis. We copromote
with Pharmacia in all
world markets except Japan.
On March 21, 2000, we announced that we were discontinuing the sale of
. Since March 1997, we marketed
in the U.S. with an affiliate
of Sankyo Company, Ltd., from whom we licensed the product for North America
and other areas. After a request from the FDA to consider removing the drug
from the market, we decided to discontinue marketing
(see Item 3,
On February 12, 2001, we announced that we had restricted the use of
for certain patients in clinical trials following discussions with
the FDA after its analysis of previously submitted results from a lifetime
mouse study that showed an increased evidence of a specific tumor type.
is currently in development for the treatment of neuropathic pain,
epilepsy, a variety of anxiety disorders and chronic pain condition. We
continue to work closely with the FDA to resolve this issue. Regulatory
filings for add-on epilepsy therapy and neuropathic pain are anticipated during
Pfizers Animal Health Group discovers, develops, manufactures and sells
products for the prevention and treatment of diseases in livestock, poultry and
companion animals. Among the products we market are parasiticides,
anti-inflammatories, vaccines, antibiotics and related medicines for livestock
and companion animals. Animal Health sales accounted for approximately 4% of
our revenues in 2000, 5% in 1999, and 6% in 1998. Our Animal Health Group
revenues were $1.1 billion in 2000, a decline of 21%. This decline was
attributable to the challenging market conditions in the global animal health
industry this year, competition in the parasiticide market and the
significant initial stocking at the request of veterinarians which impacted
in Europe), our innovative
antiparasitic for cats and dogs.
Over the past few years we have substantially increased our investment in
research for animal health products. We now have over 40 programs advancing at
various stages of development. Emerging products from this investment are
expected to reach the market starting in 2003 and drive long-term growth for
the Animal Health Group.
The $1.3 billion worldwide companion animal parasiticide market consists
of medicines for external parasites, treatments for gastrointestinal worms and
heartworm preventatives. Our product
, a once-a-month,
simple-to-administer, topical liquid, is the first medicine that can protect
against all three problems.
relieves pain and inflammation associated with osteoarthritis, a
condition that afflicts about 15% of all dogs. The new chewable form provides
the pet owner with greater convenience of administration.
Other important Pfizer companion animal products include:
vaccines for canine enteric disease
vaccines for feline leukemia
for Cushings disease and Cognitive Dysfunction Syndrome in dogs
Our Animal Health Group produces leading antiparasitic products, vaccines
and anti-infectives for cattle, swine and poultry. Among these are:
to protect cattle, swine and sheep from internal and external
vaccines to prevent a type of pneumonia and the
related problems of slow weight gains, decreased feed efficiency, and
lack of uniformity in size in swine
, an antibiotic used to treat respiratory and internal
infections in cattle and swine
, an injectable version of the
broad-spectrum antibiotic used for various animal diseases
products to treat internal parasites
vaccine for cattle respiratory disease
We completed the sale of our feed-additives business to Philipp Brothers
Chemicals, Inc. in November 2000.
Capsugel is the worlds largest producer of two-piece capsules used in
manufacturing prescription and over-the-counter pharmaceuticals and nutritional
Consumer Products Segment
With 2000 sales of $2.5 billion, our Consumer Healthcare Division (CHC)
markets many of the worlds best-known consumer health brands. CHCs products
include non-prescription over-the-counter (OTC) medications and compete
primarily in the oral care, upper respiratory care, skin care, digestive health
and eye care categories. Among our better-known brands in the U.S. are:
mouthwash and toothpaste
antihistamine for allergies
treatment for sinus congestion
for prevention and relief of heartburn
for relief of cough, cold and flu
for sinus pain relief
. home pregnancy tests
hydrocortisone skin cream
skin care lotions
ointments for treatment of diaper rash
pre-brushing dental rinse
shave creams and gels
Several product-line extensions building on these brands have been introduced
in recent years. Other products are sold only in selected international
In June 2000, we sold the
line of lice-control products to Bayer
Corporation. In the fourth quarter of 1999, we sold the
Bain de Soleil
product line to Schering-Plough Healthcare Products, Inc.
Sales of CHC accounted for about 8% of our revenues in 2000, 9% in 1999
and 10% in 1998. In 2000, revenues of CHC declined 3% primarily due to the
negative impact of foreign exchange, the divestitures of the
product lines and private label competition for
offset by increased sales of
Our CHC can extend the life of some of our prescription medications by
converting them to OTC medications. For example, an OTC formulation of
is sold in the U.K. as a treatment for vaginal
is sold as an OTC product in Canada under the
. As market conditions permit, and when we have necessary
approval from drug regulatory authorities, we plan to pursue similar launches
for other products.
Our Adams Division markets a broad range of leading confectionery
products. Among our better-known brands are:
Bubbaloo, Bubblicious, Chiclets
Dentyne, Certs, Clorets
breath-freshening gums and mints
Sales of the Adams Division accounted for about 7% of our revenues in each
of 2000 and 1999 and 8% in 1998. In 2000, Adams sales grew 6%, led by strong
particularly in North America.
Our Shaving Products business consists of Schick and Wilkinson Sword
razors and blades and a range of manicure and toiletry products. Our
better-known brands are:
razor products with wire-wrapped blades to prevent nicks and
razor line for women
razors with a rubber handle for increased control
product line with flexible cartridges
razors with a triple blade system
Sales of our shaving products accounted for about 3% of our total revenues
in each of 2000, 1999 and 1998. In 2000, sales of our shaving products
remained unchanged from 1999.
Tetra is the worlds leading provider of products for the ornamental
fish food market, including
fish foods and various fish care
accessories. Tetras sales accounted for about 1% of our revenues in 2000,
1999 and 1998. Tetras sales in 2000 were $202 million, unchanged from 1999.
Research and Product Development
Innovation by our research and development operations is very important to
the success of our businesses. Our goal is to discover, develop and bring to
market innovative products that address major unmet medical needs. This goal
has been supported by our substantial research and development investments. We
spent approximately $4.4 billion in 2000, $4.0 billion in 1999 and $3.3 billion
in 1998 on research and development, and we anticipate investing approximately
$5 billion on research and development in 2001.
We are planning for future growth of our research operations. Current
construction at four of our major research centers will add over three
million square feet of laboratory space.
Other research facilities are also being added or expanded.
We conduct research internally, and also through contracts with third
parties, through collaborations with universities and biotechnology companies
and in cooperation with other pharmaceutical firms. We also seek out
innovative technologies developed by third parties to acquire or incorporate
into our product lines through licensing or other arrangements.
Drug development is time consuming, expensive and unpredictable. On
average, only one out of many thousands of chemical compounds discovered by
researchers proves to be both medically effective and safe enough to become an
approved medicine. The process from discovery to regulatory approval can take
more than ten years. Candidates can fail at any stage of the process, and even
late-stage product candidates could fail to receive regulatory approval.
We feel that our investments in research have been rewarded by the number
of pharmaceutical compounds and new therapies we have in all stages of
development. In recent years, our discovery scientists have delivered dozens
of new chemical compounds to early development. While each new candidate is
far from regulatory approval, new drug candidates are the foundation for future
products. A table and discussion of supplemental filings for existing products
and drug candidates in development are set out under the heading
beginning on page 33 of our 2000 Annual Report. That discussion
is incorporated by reference.
Our research operations add value to our existing products by improving
their effectiveness and by discovering new uses for them. In 2000, for
example, the FDA approved the additional use of
for the treatment of
complex, a condition common in AIDS patients.
Our competitors also devote substantial funds and resources to research
and development. In addition, the consolidation that has occurred in our
industry has created companies with substantial research and development
resources. The extent to which our competitors are successful in their
research could result in erosion of sales and unanticipated product
We have significant operations outside the United States. They are
conducted both through our subsidiaries and through distributors, and involve
the same business segments pharmaceuticals and consumer products as our
Japan is our second-largest single national market, with 7% of our
revenues in 2000, and 6% in each of 1999 and 1998. No single country outside
the U.S. had revenues of more than 10% of our revenues.
For a geographic breakdown of revenues, see the table
page 67 of our 2000 Annual Report. That information is incorporated by
Our international businesses are subject, in varying degrees, to a number
of risks inherent in carrying on business in other countries. These include:
capital and exchange control regulations
expropriation and nationalization
other restrictive government actions
Our international businesses are also subject to government-imposed
constraints, including laws on pricing or reimbursement for use of products.
See the section under the heading
Government Regulation and Price Constraints
for discussion of these matters.
Revenue growth in 2000 was negatively impacted by foreign exchange. In
2000, currency movements relative to the U.S. dollar reduced our reported
revenues in many countries. Depending on the direction of change relative to
the U.S. dollar, foreign currency values can either improve or reduce the
reported dollar value of our net assets and results of operations. In 2000,
changes in foreign exchange rates decreased revenues by $673
million and, based on exchange rates at year-end 2000, it is estimated that foreign exchange would
negatively impact reported revenue
growth in 2001 by approximately $400 million. While we cannot predict
with certainty future changes in foreign exchange rates or the effect they will
have on us, we attempt to mitigate their effects. See Note 6-D to our
Derivative Financial Instruments
, on pages 50 and 51 in
our 2000 Annual Report
That discussion is incorporated by reference.
Related information about valuation and risks associated with such financial
instruments in parts E and F of that same Note is also incorporated by
In our global pharmaceuticals business, we promote our products to health
care providers such as doctors, nurse practitioners, pharmacists, hospitals,
Pharmacy Benefit Managers and Managed Care Organizations (MCOs). We also
market directly to consumers in the United States through direct-to-consumer
print and television advertising. In addition, we sponsor general advertising
to educate the public about our innovative medical research.
Our operations include several pharmaceutical sales organizations. Each
sales organization markets a distinct group of products. We increased our
sales force over the past several years so that our recently introduced
products and late-stage candidates will reach their full potential. Our U.S.
pharmaceutical sales representatives total approximately 7,350. Overseas
operations employ about 14,575 sales representatives. These numbers reflect the
merger of the Pfizer and Warner-Lambert sales forces.
Our prescription pharmaceutical products are sold principally to
wholesalers, but we also sell directly to retailers, hospitals, clinics,
government agencies and other pharmacies.
Through our marketing organizations, we explain the approved uses and
advantages of our products to medical professionals. We work to gain access to
MCO formularies (lists of recommended or approved medicines and other products
compiled by pharmacists and physicians) by demonstrating the qualities and
treatment benefits of our products. We also work with MCOs to assist them with
disease management, patient education and other tools that help their medical
Marketing of prescription pharmaceuticals depends to a degree on complex
decisions about the scope of clinical trials made years before product
approval. All drugs must complete clinical trials required by regulatory
authorities to show they are safe and effective for treating one or more
particular medical problems. A manufacturer may choose, however, to undertake
additional studies to demonstrate additional advantages of a compound,
including comparative clinical trials with competitive products.
Those studies can be costly and can take years to complete and the results
are uncertain. Balancing these considerations makes it difficult to decide
whether and when to undertake such additional studies. But, when they are
successful, such studies can have a major impact on approved marketing claims
Separate sales organizations are used by our Animal Health business to
promote its products. Its advertising and promotion are generally targeted to
health professionals, directly and through medical journals. Animal health and
nutrition products are sold through veterinarians, drug wholesalers,
distributors and retail outlets as well as directly to users. Where appropriate,
these products are also marketed through print and television advertising.
Our Consumer Products businesses primarily use their own representatives
to directly promote their products. We also use print and television consumer
advertising to promote our consumer products. These products are sold through
During 2000, sales to our three largest pharmaceutical and consumer health care products wholesalers were:
McKesson HBOC, Inc. 13% of our revenues;
Cardinal Health, Inc. 11% of our revenues; and
Bergen Brunswig Corporation 9% of our revenues.
Sales to these wholesalers were concentrated in the Pharmaceuticals
segment. Apart from these instances, none of our business segments is
dependent on any one customer or group of related customers.
Patents and Intellectual Property Rights
Our products are sold around the world under brand-name, logo and certain
product design trademarks we consider in the aggregate to be of material
importance. Trademark protection continues in some countries for as long as
the mark is used; in other countries, for as long as it is registered.
Registrations generally are for fixed, but renewable, terms.
We own or license a number of U.S. and foreign patents. These patents
pharmaceutical products and their uses
product manufacturing processes
intermediate chemical compounds used in manufacturing
Patents for individual products extend for varying periods according to
the date of patent filing or grant and the legal term of patents in the various
countries where patent protection is obtained. The actual protection afforded
by a patent, which can vary from country to country, depends upon the type of
patent, the scope of its coverage and the availability of legal remedies in the
In the aggregate, our patent and related rights are of material importance
to our businesses in the United States and most other countries. Based on
current product sales, and considering the vigorous competition with products
sold by others, the patent rights we consider significant in relation to our
business as a whole are those for
. Our basic U.S. patents
Zoloft, Lipitor, Viracept
between 2004 and 2013. The basic U.S. patent relating to
is patented by Pliva, a Croatian pharmaceutical company. The
drug is licensed exclusively to us by Pliva for sales and marketing in major
countries, and we purchase the compound in bulk crude form from Pliva. Plivas
U.S. patent on
expires in 2005.
is patented by the Belgian company, UCB S.A. The drug is licensed
exclusively to us for sales in the U.S. and semi-exclusively with UCB S.A. for
sales in Canada. The U.S. patent on
held by UCB S.A. expires in 2007.
The basic U.S. patents
expired in 1994 and 2000. However, in
April 2000 a broad U.S. patent was granted relating to stable pharmaceutical
containing low levels of lactam impurity. This
patent expires in 2017. Other companies have filed applications with the FDA
seeking approval of such products, which appear to infringe this patent (see
discussion in Item 3,
In addition, other companies have filed applications with the FDA seeking
approval of products, which appear to infringe our patents on
(see discussion in Item 3,
We have other patent rights covering additional products that have smaller
We expect that the patents on some of our newest products and late-stage
product candidates could become significant to our business as a whole in the
The expiration of a product patent normally results in significant
competition from generic products against the covered product and, particularly
in the U.S., can result in a dramatic reduction in sales of the pioneering
some cases, however, we can continue to obtain commercial benefits
product manufacturing trade secrets
patents on uses for products
patents on processes and intermediates for the economical manufacture of the active ingredients
patents for special formulations of the product or delivery mechanisms
conversion of the active ingredient to over-the-counter products
The effect of product patent
expiration also depends upon:
the nature of the market and the position of the product in it
the growth of the market
the complexities and economics of manufacture of the product
the requirements of generic drug laws
One of the main limitations on our operations in some countries outside
the U.S. is the lack of effective intellectual property protection of our
products. Under international agreements in recent years, global protection of
intellectual property rights is improving. The General Agreement on Tariffs
and Trade requires participant countries to amend their intellectual property
laws to provide patent protection for pharmaceutical products by the end of a
ten-year transition period. A number of countries are doing this. We have
experienced significant growth in our businesses in some of those nations and
our continued business expansion in those countries depends to a large degree
on further patent protection improvement.
Competition is intense in all of our businesses, and includes many large
and small competitors.
The principal means of competition varies among product categories and
business groups. Technological innovations affecting:
patients ease of use
are important to success in all of our businesses. Our businesses also focus
on unmet medical needs and therapeutic improvements. Our emphasis on
innovation has led to our multi-billion-dollar research and development
investments over the past decade.
Our pharmaceutical business competes with worldwide research-based drug
companies, many smaller research companies with more limited therapeutic focus,
and generic drug manufacturers. Our pharmaceutical operations are among the
largest in the world.
In recent years, a comparison of the total cost of medical treatments
using pharmaceuticals versus alternative treatments for the same condition has
become an important basis of competition. Managed Care Organizations and
Pharmacy Benefit Managers look to cost advantages as well as medical benefits
in making their drug formulary decisions.
Our pharmaceutical sales and marketing organization is a valuable
competitive asset. Our salespeoples ability to reach medical professionals
with information about our products helps us respond to competitive efforts and
launch new products.
We have a significant presence in the animal health marketplace, but many
other companies offer competitive products. Altogether, there are hundreds of
producers of animal health products throughout the world. The principal
methods of competition vary somewhat depending on the particular product. They
effective promotion to veterinary professionals and consumers
We promote our products directly through our sales representatives as well as
Many other companies, large and small, manufacture and sell one or more
products that are similar to our consumer products. Sources of competitive
advertising and promotion
broad distribution capabilities
Significant expenditures for advertising, promotion and marketing are generally
required to achieve consumer acceptance of consumer products.
In the current environment of competitive pressures on profit margins, we
continue efforts to control the growth of our expenses. We have kept our
costs down in other areas such as manufacturing, distribution and sales
administration by restructuring and consolidating facilities. These measures
have brought us new efficiencies and reduced or contained our operating
Managed Care Organizations
The growth of Managed Care Organizations in the U.S. has been a major
factor in the competitive make-up of the health care marketplace. Over half
the U.S. population now participates in some version of managed care. Because
of the size of the patient population covered by MCOs, marketing of
prescription drugs to them and the Pharmacy Benefit Managers (PBMs) that serve
many of those organizations has become important to our business.
MCOs can include medical insurance companies, medical plan administrators,
health-maintenance organizations, alliances of hospitals and physicians and
other physician organizations. The purchasing power of MCOs has been increasing
in recent years due to their growing numbers of enrolled patients. At the same
time, those organizations have been consolidating into fewer, even larger
entities. This enhances their purchasing strength and importance to us.
A major objective of MCOs is to contain and, where possible, reduce health
care expenditures. They typically use formularies, volume purchases and
long-term contracts to negotiate discounts from pharmaceutical providers. They
use their purchasing power to bargain for lower supplier prices. They also
emphasize primary and preventive care, outpatient treatment, and procedures
performed at doctors offices and clinics. Hospitalization and surgery,
typically the most expensive forms of treatment, are carefully managed.
As discussed above in
, MCOs and PBMs typically develop
formularies to reduce their cost for medications. Formularies can be based on
the prices and therapeutic benefits of the available products. Due to their
lower cost, generic medicines are often favored. The breadth of the products
covered by formularies can vary considerably from one MCO to another, and many
formularies include alternative and competitive products for treatment of
particular medical problems. MCOs use a variety of means to encourage
patients use of products listed on their formularies.
Exclusion of a product from a formulary can lead to its sharply reduced
usage in the MCO patient population. Consequently, pharmaceutical companies
compete aggressively to have their products included. Where possible,
companies compete for inclusion based upon unique features of their products,
such as greater efficacy, better patient ease of use or fewer side effects. A
lower overall cost of therapy is also an important factor. Products that
demonstrate fewer therapeutic advantages must compete for inclusion based
primarily on price.
The growth of MCOs also appears to have led to greater usage of some
drugs. The use of certain drugs can prevent the need for more costly
treatments such as hospitalization,
professional therapy or even surgery.
Because of these advantages, such drugs can become favored first-line
treatments. In addition, the current trend of some patients to opt for managed
care alternatives to Medicare may increase overall pharmaceutical usage among
that segment of the elderly population. Medicare generally does not pay for
medicines, so patients who do not have another source of
prescription drug coverage must bear that cost. MCOs, however, often offer
drug benefits for their participants.
These developments have not only created pressure on prices, but also have
increased sales of products on formularies. We have been generally, although
not universally, successful in having our major products included on MCO
Another way we address the interests of MCOs is by developing disease
management programs. These programs can be attractive to MCOs by improving
patient communications and compliance with dosage directions, which are
important for effective disease treatment. They can help MCOs address various
aspects of disease management, such as prevention, diagnosis and treatment of
certain diseases, including use of pharmaceutical products. This comprehensive
approach can improve the quality of care and lower costly complications of
One of the biggest competitive challenges that we face in the U.S. and
that is growing internationally is from generic pharmaceutical manufacturers.
Upon the expiration of U.S. patent protection on an important product, we can
lose the major portion of U.S. sales of the product within a year. Generic
competitors operate without our large research and development expenses and our
costs of conveying medical information about the product to the medical
community. In addition, the FDA approval process exempts generics from costly
and time-consuming clinical trials to demonstrate their safety and efficacy,
and allows generic manufacturers to rely on the safety and efficacy of the
pioneer product. Generic products need only demonstrate a level of
availability in the bloodstream equivalent to that of the pioneer product.
This means that after we have borne the expenses of discovering, developing and
testing a medicine for safety and efficacy, obtaining regulatory approval and
informing the medical community about its therapeutic benefits, generic
competitors can charge much less for a competing version of our product and
still be profitable.
As noted above, MCOs that focus primarily on the immediate cost of drugs
often favor generics over brand-name drugs. Many governments also encourage the
use of generics as alternatives to brand-name drugs in their health care
programs, including Medicaid in the U.S. Laws in the U.S. generally allow, and
in some cases require, pharmacists to substitute generic drugs that have been
rated under government procedures to be therapeutically equivalent to a
brand-name drug. The substitution must be made unless the prescribing
physician expressly forbids it.
Raw materials essential to our businesses are purchased worldwide in the
ordinary course of business from numerous suppliers. In general, these
materials are available from multiple sources. No serious shortages or delays
were encountered in 2000, and none are expected in 2001.
Government Regulation and Price Constraints
Pharmaceutical companies are subject to heavy regulation by a number of
national, state and local agencies. Of particular importance is the FDA in the
United States. It has jurisdiction over virtually all of our businesses and
administers requirements covering the testing, safety, effectiveness, approval,
manufacturing, labeling and marketing of our pharmaceutical products. In some
cases, FDA requirements and/or reviews have increased the amount of
time and money necessary to develop new products and bring them to market.
The FDA also regulates most of our consumer products and, along with the
U.S. Department of Agriculture and the Environmental Protection Agency, our
animal health products. Some regulatory actions pertaining to our products are
discussed in Item 3,
Since the beginning of 1998, the approval of new drugs across the EU is
possible only using the European Medicines Evaluation Agencys (EMEA) mutual
recognition or central approval processes. The use of either of these
procedures should provide a more rapid and consistent approval across all
fifteen member states than was the case when the approval processes were
operating independently within each member state. Further, on January 1, 2000,
Norway and Iceland became full participants in the EU central approval
processes. In addition, the agreement between the EU and ten Eastern European
states to base their approvals on the centralized EU approval will
significantly speed the regulatory process in those countries. The EMEA does
not have jurisdiction over patient reimbursement or pricing matters in EU
member countries, however. We will continue to deal with individual countries
on such issues.
In recent years, various legislative proposals have been offered in the
U.S. Congress and in some state legislatures that would bring about major
changes in the affected health care systems. Some states have passed such
legislation, and further federal and state proposals are possible. These could
include price or patient reimbursement constraints on medicines and
restrictions on access to certain products. Similar issues exist in many
foreign countries where we do business. We cannot predict the outcome of such
initiatives, but we will work to maintain patient access to our products and to
oppose price constraints.
Also in the U.S., Congressional proposals have called for substantial
changes in the Medicare and Medicaid programs. If such changes are enacted,
they may require significant reductions from currently projected government
expenditures for these programs. Driven by budget concerns, Medicaid managed
care systems have been implemented in several states. If the Medicare and
Medicaid programs implement changes that restrict the access of a significant
population of patients to our innovative medicines, our business could be
materially affected. On the other hand, relatively little pharmaceutical use
is currently covered by Medicare. As noted above, if changes to these programs
shift patients to MCOs that cover pharmaceuticals, or drug coverage for
Medicare beneficiaries is expanded, usage of pharmaceuticals could increase.
Legislation in the U.S. requires us to give rebates to state Medicaid
agencies based on each states reimbursement of pharmaceutical products under
the Medicaid program. We also must give discounts or rebates on purchases or
reimbursements of pharmaceutical products by certain other federal and state
agencies and programs. Also, in late 2000 and early 2001, the states of
Vermont and Maine received Health Care Financing Administration approval of
waivers which would expand Medicaid rebates beyond the current Medicaid
population. These rebates potentially could be viewed as price discounts
without appreciable increases in volume as an offset. See the discussion
regarding rebates on page 32 of our 2000 Annual Report, which discussion is
incorporated by reference.
We encounter similar regulatory and legislative issues in most other
countries. For example, in 2000, Japan announced a price reduction on drugs.
In Europe and some other international markets, the government provides health
care at low direct cost to consumers and regulates pharmaceutical prices or
patient reimbursement levels to control costs for the government-sponsored
health care system.
This international patchwork of price regulation has led to inconsistent
prices and some third-party trade in our products from markets with low prices.
Such trade exploiting
price differences between countries can undermine our
sales in markets with higher prices.
We are also subject to the jurisdiction of various other regulatory and
enforcement departments and agencies, such as the Department of Health and
Human Services, the Federal Trade Commission and the Department of Justice in
the U.S., and are, therefore, subject to possible administrative and legal
proceedings and actions by those organizations (see Item 3,
below). Such actions may
include product recalls, seizures and other civil and criminal sanctions. In
some cases, we have initiated product recalls voluntarily.
It is difficult to predict the future impact of the broad and expanding
legislative and regulatory requirements affecting us.
Environmental Law Compliance
Most of our manufacturing and certain research operations are affected by
federal, state and local environmental laws. We have made, and intend to
continue to make, necessary expenditures for compliance with applicable laws.
We are also cleaning up environmental contamination from past industrial
activity at certain sites (see Item 3,
, below). As a result,
we incurred capital and operational expenditures in 2000 for environmental
protection and clean-up of certain past industrial activity as follows:
environmental-related capital expenditures $71 million
other environmental-related expenses $129 million
While we cannot predict with certainty the future costs of such clean-up
activities, capital expenditures, or operating costs for environmental
compliance, we do not believe they will have a material effect on our capital
expenditures, earnings or competitive position.
Banking and Insurance Subsidiaries
We conduct international banking operations through a subsidiary, Pfizer
International Bank Europe (PIBE), based in Dublin, Ireland. PIBE, incorporated
under the laws of Ireland, operates under a banking license from the Central
Bank of Ireland. It makes loans and accepts deposits in several currencies in
international markets. PIBE is an active Euromarket lender to high quality
corporations and governments through its portfolio of loans and money market
instruments. Loans are made primarily on a short and medium term basis,
typically with floating interest rates.
We also own an insurance operation, The Kodiak Company Limited, which
reinsures certain assets, inland transport and marine cargo of our
international operations. Financial data for these subsidiaries are set out in
Note 5 to our financial statements,
Banking and Insurance Subsidiaries,
49 in our 2000 Annual Report, which is incorporated by reference.
The discussion of tax-related matters (including certain proceedings
involving proposed tax adjustments relating to prior years) in Note 12 to our
Taxes on Income
, on pages 53 and 54 in our 2000 Annual
Report is incorporated by reference.
In our innovation-intensive business, our employees are vital to our
success. We believe we have good relationships with our employees. As of
December 31, 2000, we employed approximately 90,000 people in our operations
throughout the world.
CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS
(Cautionary Statements Under the Private Securities Litigation Reform Act of
Our disclosure and analysis in this report and in our 2000 Annual Report
to Shareholders contain some forward-looking statements. Forward-looking
statements give our current expectations or forecasts of future events. You
can identify these statements by the fact that they do not relate strictly to
historical or current facts. They use words such as anticipate, estimate,
expect, project, intend, plan, believe, and other words and terms of
similar meaning in connection with any discussion of future operating or
financial performance. In particular, these include statements relating to
future actions, prospective products or product approvals, future performance
or results of current and anticipated products, sales efforts, expenses, the
outcome of contingencies such as legal proceedings, anticipated effects of the
merger with Warner-Lambert and financial results. From time to time, we also
may provide oral or written forward-looking statements in other materials we
release to the public.
Any or all of our forward-looking statements in this report, in the 2000
Annual Report and in any other public statements we make
may turn out to be
. They can be affected by inaccurate assumptions we might make or by
known or unknown risks and uncertainties. Many factors mentioned in the
for example, among other factors, government regulations
around the world, generic product competition and the competitive environment
will be important in determining future results. Consequently, no
forward-looking statement can be guaranteed. Actual future results may vary
We undertake no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any further disclosures we make on related
subjects in our 10-Q and 8-K reports to the SEC. Also note that we provide the
following cautionary discussion of risks, uncertainties and possibly inaccurate
assumptions relevant to our businesses. These are factors that we think could
cause our actual results to differ materially from expected and historical
results. Other factors besides those listed here could also adversely affect
the Company. This discussion is provided as permitted by the Private
Securities Litigation Reform Act of 1995.
Balancing current growth and investment for the future remains a major
challenge. Our ongoing investments in new product introductions and research
and development for future products could exceed corresponding sales growth.
This could produce higher costs without a proportional increase in revenues.
In the U.S., many pharmaceutical products are subject to increasing pricing
pressures, which could be significantly impacted by the outcome of the current
national debate over Medicare reform. If the Medicare program provided
outpatient pharmaceutical coverage for its beneficiaries, the federal
government, through its enormous purchasing power under the program, could
demand discounts from pharmaceutical companies that may implicitly create price
controls on prescription drugs. On the other hand, a Medicare drug
reimbursement provision may increase the volume of pharmaceutical drug
purchases, offsetting at least in part these potential price discounts. In
addition, managed care organizations, institutions and other government
agencies continue to seek price discounts. Government efforts to reduce
Medicare and Medicaid expenses are expected to increase the use of managed care
organizations. This may result in managed cares influencing prescription
decisions for a larger segment of the population. International operations are
also subject to price and market regulations. As a result, it is expected that
pressures on pricing and operating results will continue. Additionally, a
number of states have proposed various schemes to control prices for their
seniors drug programs,
including importation from other countries and bulk
purchasing of drugs. Any one of these
could be disruptive to our markets and distribution system.
Thirty-nine percent of our 2000 revenues arose from international operations,
and we expect revenue and net income growth in 2001 to be impacted by changes
in foreign exchange rates. Revenues from Europe comprised approximately 18% of
our revenues in 2000, while revenues from Asia comprised approximately 12%,
including 7% from Japan.
These international-based revenues as well as our substantial
international assets result in our exposure to currency exchange rate changes.
In addition, our interest-bearing investments, loans and borrowings are subject
to interest rate change risk. The risks of such changes and the measures we
have taken to help contain those risks are discussed in the section entitled
Financial Risk Management
on page 39 in our 2000 Annual Report. For additional
details, see Note 6-D to our financial statements,
on pages 50 and 51 in our 2000 Annual Report. Those sections of
the Annual Report are incorporated by reference.
Notwithstanding our efforts to foresee and mitigate the effects of changes
in fiscal circumstances, we cannot predict with certainty all changes in
currency and interest rates, inflation or other related factors affecting our
businesses. These factors could affect future results.
A European currency (euro) was introduced in January 1999 to replace the
separate currencies of twelve (Greece joined the original eleven in early 2001)
individual countries. The major changes during the first two years of the
euros existence have occurred in the banking and financial sectors. An
increasing impact at the commercial and retail level is expected through
December 31, 2002, especially when euro coins and banknotes begin circulation
next year. We are modifying systems and commercial arrangements to deal with
the new currency, including the availability of dual currency processes to
permit transactions to be denominated in legacy currencies, as well as the
euro. The cost of this effort is not expected to have a material effect on our
businesses or results of operations. We continue to evaluate the economic and
operational impact of the euro, including its impact on competition, pricing
and foreign currency exchange risks. While there is no guarantee that all
problems have been foreseen and corrected, the accelerating use of the euro is
not expected to cause any material disruption to our businesses.
International operations could be affected by changes in intellectual
property legal protections and remedies, trade regulations and procedures and
actions affecting approval, production, pricing, reimbursement and marketing of
products, as well as by unstable governments and legal systems,
intergovernmental disputes and possible nationalization.
Cost-containment measures employed by governments that have the effect of
limiting patient access to medicines and related issues described above in
Government Regulation and Price Constraints
affect the growth and profitability
of our operations in some countries. Those factors could affect future
Business combinations among our competitors could affect our competitive
position in the pharmaceutical, consumer products and animal health businesses.
Similarly, combinations among our major customers could increase their
purchasing power in dealing with us. In addition, our merger with
Warner-Lambert could affect our business, finances and capital structure.
While we anticipate earnings and revenues growth, as well as substantial cost
savings and operating efficiencies to be achieved in connection with the merger
with Warner-Lambert, we cannot give any assurance that these results will be
realized in the combined company within the time periods contemplated or even
if they will be fully realized at all.
Generic competition is a major challenge in the U.S. and is growing
internationally. Loss of patent protection typically leads to dramatic loss of
sales in the U.S. market and could affect future results.
Risks and uncertainties particularly apply with respect to product-related
statements. The outcome of the lengthy and complex process of identifying new
compounds and developing new products is inherently uncertain. Prospective
products can fail to receive regulatory approval. There are also many
considerations that can affect marketing of pharmaceutical products around the
world. Regulatory delays, the inability to successfully complete clinical
trials, claims and concerns about safety and efficacy, new discoveries, patents
and products by competitors and related patent disputes and claims about
adverse side effects are a few of the factors that could adversely affect the
realization of research and development and product-related forward-looking
As discussed above in
, decisions about research studies made early
in the development process of a drug candidate can have a substantial impact on
the marketing strategy once the drug receives approval. More detailed studies
may demonstrate additional benefits that can help in the marketing, but they
consume time and resources and can delay submitting the drug candidate for
initial approval. We try to plan clinical trials prudently, but there is no
guarantee that a proper balance of speed and testing will be made in each case.
The quality of our decisions in this area can affect our future results.
Difficulties or delays in product manufacturing or marketing, including, but
not limited to, the inability to build up production capacity commensurate with
demand, or the failure to predict market demand for or to gain market
acceptance of approved products, could affect future results.
We currently have eight products with annual sales to third parties of one
billion dollars or more each. In this group are seven medicines discovered by
Lipitor, Norvasc, Zithromax, Zoloft, Viagra, Neurontin
and our alliance product
. Those products accounted for more than half
of our 2000 revenues. If these or any of our other major products were to
become subject to a problem such as loss of patent protection, unexpected side
effects, regulatory proceedings, publicity affecting doctor or patient
confidence or pressure from competitive products, or if a new, more effective
treatment should be introduced, the impact on our revenues could be
We cannot predict with accuracy the timing or impact of the introduction of
competitive products or their possible future effect on our sales. For
our patented antifungal product, and
antiepileptic medication, each had sales in excess of $1 billion in 2000.
Potential competitive products for
have been filed for
FDA approval, although none of these filings have been approved at this time
(see the discussion in Item 3,
below). This indicates that
the number of medicines that compete with our products may increase, and the
sale of competing product may affect our expected results.
During 1995, the authors of some non-clinical studies questioned the safety
of calcium channel blockers (CCBs). In 1996, an FDA advisory panel found no
data to support challenges to the safety of newer sustained-release and
intrinsically long-acting CCBs (such as
Questions about this class of products continued, however, following the
advisory panel review. Data from subsequent studies and reviews and decisions
by two national regulatory authorities, plus published National Institutes of
Health guidelines, were all supportive of the safety of long-acting CCBs and of
their appropriateness as first-line medications in the treatment of
We continue to believe that the safety and effectiveness of
supported by a large body of data from numerous studies and
the daily clinical experiences of physicians around the world. It is not
possible, however, to predict the impact on our future sales, if any, of
existing or future studies, regulatory agency actions or a continuing debate
Growth in costs and expenses, changes in product mix and the impact of
restructuring and other unusual items that could result from evolving business
strategies, evaluation of asset realization and organizational restructuring
could affect future results. For example, we may be unable to maintain or
further enhance those margin improvements achieved in recent years, which would
affect future results.
On January 1, 2001, we adopted the provisions of the Emerging Issues Task
Force (EITF) Issue No. 00-14,
Accounting for Certain Sales Incentives
Issue No. 00-14 addresses the income statement classification of certain sales
incentives and requires us to reclassify the cost of certain sales incentives
Selling, informational and administrative expenses
amount of sales incentives that require reclassification to revenues is
immaterial to the financial statements on both a consolidated and segment
basis. Accordingly, we do not expect prior period financial statements
presented in the future to be restated to reflect the provisions of EITF No.
On January 1, 2001, we adopted the provisions of Statement of Financial
Accounting Standards (SFAS) No. 138,
Accounting for Certain Derivative
Instruments and Certain Hedging Activities an amendment of SFAS No. 133
Accounting for Derivative Instruments and Hedging Activities.
SFAS No. 138 amends the accounting and reporting standards of SFAS No. 133 for
certain derivative instruments and certain hedging activities. SFAS No. 133
requires a company to recognize all derivative instruments as assets or
liabilities in its balance sheet and measure them at fair value. We do not
expect the adoption of these statements to have a material impact on our
financial position, results of operations or cash flows.
Such new or revised accounting standards and rules are issued from time to
time. Although the standards mentioned above are not expected to have a
material impact on our reported financial results, future standards and rules
could have such an effect.
Changes in the U.S. Tax Code and the tax laws of other countries, as well as
our effective tax rate for the fiscal year, can affect our net earnings.
During 2000, no major U.S. or international tax legislation was enacted which
would materially impact our net earnings. It is not possible, however, to
predict the impact on our future results of any tax legislation enacted in the
Claims have been brought against us and our subsidiaries for various legal,
environmental and tax matters, and additional claims arise from time to time.
In addition, our operations are subject to international, federal, state and
local environmental laws and regulations. It is possible that our cash flows
and results of operations could be affected by the one-time impact of the
resolution of these contingencies. We believe that the ultimate disposition of
current matters, to the extent not previously provided for, will not have a
material impact on our financial condition or cash flows and results of
operations, except where specifically commented upon in the discussion of such
in Item 3 in this report and in Note 12 to our
Taxes on Income
, on pages 53 and 54 in our 2000 Annual
Report, which is incorporated by reference.
ITEM 2. PROPERTIES
Our corporate and divisional headquarters are located at our world
headquarters, which includes several buildings in New York City, and at our
campus in Morris Plains, New Jersey. In the New York world headquarters, we
own two of the buildings, including our main 33-
story office tower, and rent
other nearby space. Our 33-story office tower is located on a site we have
leased under a long-term ground lease. Altogether, our New York headquarters
operations occupy over 1.75 million square feet of owned and leased office
space. On the Morris Plains campus, we own five buildings with total occupied
space of approximately 1.3 million square feet, located on approximately 175
acres. Additional leased space in the
vicinity of the Morris Plains campus totals approximately 0.25 million square
For our pharmaceutical business we own and lease space for sales and
marketing, administrative support and customer service functions around the
Our major research and development operations are located in owned
facilities in Amboise, France; Ann Arbor, Michigan; Freiburg, Germany; Fresnes,
France; Groton, Connecticut; Holland, Michigan; Morris Plains, New Jersey;
Nagoya, Japan; Sandwich, England, U.K. and Mississauga, Ontario, Canada. We
also lease facilities in La Jolla, California, for research and development
operations. The research and development buildings at our Groton facility
currently contain approximately 2.7 million square feet of floor space. The
Company also began construction in 1998 on an additional 780,000 square-foot
facility on a 24-acre site in New London, Connecticut.
Buildings on our 334-acre Sandwich, England campus house research
facilities, our U.K. pharmaceutical sales office and a production plant. The
research and development facilities contain approximately 1.2 million square
feet of floor space. An additional 1.1 million square feet of new research
space is under construction.
At our facility in Nagoya, Japan, approximately 470,000 square feet of
floor space is used for research and development.
At our facility in Holland, Michigan, approximately 140,000 square feet of
floor space is used for research and development.
The Ann Arbor, Michigan and La Jolla, California facilities are dedicated
research and development sites, and contain 1.3 million and 470,000 square feet
of floor space, respectively.
We own other important research facilities in Terre Haute, Indiana and
Cambridge, Massachusetts. A number of smaller research and development
operations around the world focus principally on their local markets. As
discussed above, we have been expanding our research and development facilities
in recent years to meet the challenges of handling growing research activities.
In 2000, over 3.4 million square feet of research facilities was under
construction at our sites in Groton/New London, Ann Arbor, La Jolla and
Our Global Manufacturing Division operates 57 plants that produce products
for our pharmaceutical, consumer products and animal health businesses around
the world. Twenty of these are major facilities. These plants handle one or
more of three types of production processes:
We have three major fermentation plants:
Sandwich, England, U.K.
The Rixensart, Belgium facility is under contract to be sold.
Our major organic synthesis facilities are in seven locations:
Barceloneta, Puerto Rico, U.S.
Groton, Connecticut, U.S.
Holland, Michigan, U.S.
Little Island, Ireland
Sandwich, England, U.K.
In addition, construction is underway on a new organic synthesis site in Tuas,
We have major product production plants at twenty-one sites in eleven
Barceloneta, Puerto Rico, U.S.
Brooklyn, New York, U.S.
Lees Summit, Missouri, U.S.
Lincoln, Nebraska, U.S.
Lititz, Pennsylvania, U.S.
Parsippany, New Jersey, U.S.
Sandwich, England, U.K.
San José Iturbide, Mexico
São Paulo, Brazil
Terre Haute, Indiana, U.S.
Vega Baja, Puerto Rico, U.S.
Our Animal Health Group has its principal executive offices in leased
facilities one block away from the Companys New York world headquarters.
Animal Health owns a building in Exton, Pennsylvania, and leases an additional
office building nearby.
The research for Animal Health products is generally conducted at our
major research and development facilities.
Our Consumer Healthcare Division has its principal executive offices and
research operations in Morris Plains, New Jersey and Parsippany, New
CHCs sales and marketing offices are generally located in
leased space and shared with
local pharmaceutical or other consumer group businesses.
Our Global Manufacturing Division operates our distribution operations in
the U.S., including facilities in Aurora, Colorado; Elk Grove, Illinois; Fort
Worth, Texas; Guilderland Center, New York; Lees Summit, Missouri; Lititz,
Pennsylvania; Marietta, Georgia; Parsippany, New Jersey; Memphis, Tennessee and
Reno, Nevada. We also operate distribution facilities in major markets around
The Adams Division operates 22 plants globally, including 13 major
Manchester, England, U.K.
Nagoya, Japan (Joint Venture, Meito-Adams)
Rockford, Illinois, U.S.
São Paulo, Brazil
The Shaving Products Division operates five manufacturing sites:
Acton, England, U.K.
Milford, Connecticut, U.S.
Distribution of these products is usually arranged through contracted
The Capsugel Division operates nine hard-gelatin capsule manufacturing
Greenwood, South Carolina, U.S.
Rio de Janeiro, Brazil
In addition, the division operates one soft-gelatin capsule manufacturing
facility in Bloermel, France. Distribution of Capsugel products is generally
done through distribution facilities located on or near the plant sites.
Tetra operates three manufacturing sites:
Blacksburg, Virginia, U.S.
Tetra also operates distribution facilities from sites near the Blacksburg
and Melle manufacturing facilities.
In general, our properties are well maintained, adequate and suitable to
their purposes. The growth of our businesses has created space pressures for
certain operations, however. We have responded to such challenges with plans
to provide appropriate facilities as needs are demonstrated. Note 9 to our
Property, Plant and
on page 52 in our 2000 Annual Report, which discloses amounts
invested in land, buildings and equipment, and the discussion of investing
activities under the heading
Summary of Cash Flows
on page 37 of our 2000
Annual Report, which describes our capital expenditures, are incorporated by
reference. See also the discussion under Note 14 entitled
page 56 of our 2000 Annual Report, which is also incorporated by reference.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in a number of claims and litigations, including
product liability claims and litigations considered normal in the nature of its
businesses. These include suits involving various pharmaceutical and hospital
products that allege either reaction to or injury from use of the product. In
addition, from time to time the Company is involved in, or is the subject of,
various governmental or agency inquiries or investigations relating to its
On June 9, 1997, the Company received notice of the filing of an
Abbreviated New Drug Application (ANDA) by Mylan Pharmaceuticals for a
sustained-release nifedipine product asserted to be bioequivalent to
. Mylans notice asserted that the proposed formulation does not infringe
relevant licensed Alza and Bayer patents and thus that approval of their ANDA
should be granted before patent expiration. On July 18, 1997, the Company,
together with Bayer AG and Bayer Corporation, filed a patent-infringement suit
against Mylan Pharmaceuticals Inc. and Mylan Laboratories Inc. in the U.S.
District Court for the Western District of Pennsylvania with respect to Mylans
ANDA. Suit was filed under Bayer AGs U.S. Patent 5,264,446, licensed to the
Company, relating to nifedipine of a specified particle size range. On March
16, 1999, the court granted Mylans motion to file an amended answer and
antitrust counterclaims. On December 17, 1999, Mylan received final approval
from the FDA for its 30 mg. extended-release nifedipine tablet. On February 28,
2000, a settlement agreement was entered into between Mylan and the Company
under which the litigation was terminated and Mylan will market a generic
sustained-release nifedipine product manufactured by the Company under its own
On or about February 23, 1998, Bayer AG received notice that Biovail
Laboratories Incorporated had filed an ANDA for a sustained-release nifedipine
product asserted to be bioequivalent to one dosage strength (60 mg.) of
. The notice was subsequently received by the Company as well. The
notice asserts that the Biovail product does not infringe Bayers U.S. Patent
5,264,446. On March 26, 1998, the Company received notice of the filing of an
ANDA by Biovail Laboratories of a 30 mg. dosage formulation of nifedipine
alleged to be bioequivalent to
. On April 2, 1998, Bayer and Pfizer
filed a patent-infringement action against Biovail, relating to their 60 mg.
nifedipine product, in the U.S. District Court for the District of Puerto Rico.
On May 6, 1998, Bayer and Pfizer filed a second patent infringement action in
Puerto Rico against Biovail under the same patent with respect to Biovails 30
mg. nifedipine product. These actions have been consolidated for discovery and
trial. On April
24, 1998, Biovail Laboratories Inc. brought suit in the U.S.
District Court for the Western District of Pennsylvania against the Company and
Bayer seeking a declaratory judgment of invalidity of and/or non-infringement
of the 5,264,446 nifedipine patent as well as a finding of violation of the
antitrust laws. Biovail has also moved to transfer the patent infringement
actions from Puerto Rico to the Western District of Pennsylvania. Pfizer has
opposed this motion to transfer and on June 19, 1998, moved to dismiss
Biovails declaratory judgment action and antitrust action in the Western
District of Pennsylvania, or in the alternative, to stay the action pending the
outcome of the infringement actions in Puerto Rico. On January 4, 1999, the court in Pennsylvania
granted Pfizers motion for a stay of the antitrust action pending the outcome
of the infringement actions in Puerto Rico. On January 29, 1999, the court in
Puerto Rico denied Biovails motion to transfer the patent infringement actions
from Puerto Rico to the Western District of Pennsylvania. On April 12, 1999,
Biovail filed a motion for summary judgment based in part on the summary
judgment motion granted to Elan in the Bayer v. Elan litigation in the Northern
District of Georgia. Pfizer and Bayers response was filed on April 26, 1999.
On September 20, 1999, the court in Puerto Rico denied Biovails motion for
summary judgment without prejudice to their refiling after completion of
discovery in the
patent-infringement litigation. Fact discovery
has been completed, but expert discovery continues.
During 2000, Teva began commercial sale in the United States of Biovails
60 mg. extended-release nifedipine tablets alleged to be bioequivalent to the
Companys 60 mg.
tablets. On February 16, 2001, Bayer AG, Bayer
Corporation, and Pfizer Inc. sued Biovail Corporation, Biovail Laboratories,
Inc., and Teva Pharmaceuticals USA, Inc., in the U.S. District Court for the
District of Puerto Rico for infringement of Bayers U.S. Patent 5,264,446 by
this actual commercial product.
On April 2, 1998, the Company received notice from Lek U.S.A. Inc. of its
filing of an ANDA for a 60 mg. formulation of nifedipine alleged to be
. On May 14, 1998, Bayer and Pfizer commenced suit
in the U.S. District Court for the District of New Jersey against Lek for
infringement of Bayers U.S. Patent 5,264,446, as well as for infringement of a
second Bayer patent, 4,412,986 relating to combinations of nifedipine with
certain polymeric materials. Plaintiffs amended the complaint on November 10,
1998, limiting the action to infringement of U.S. Patent 4,412,986. On January
19, 1999, Lek filed a motion to dismiss the complaint alleging non-infringement
of U.S. Patent 4,412,986. Pfizer responded to this motion and oral argument was
held in abeyance pending a settlement conference. In September 1999, a
settlement agreement was entered into among the parties staying this litigation
until the expiration of U.S. Patent 4,412,986 on November 2, 2000. This
suit has now been dismissed.
On February 10, 1999, the Company received a notice from Lek U.S.A. of its
filing of an ANDA for a 90 mg. formulation of nifedipine alleged to be
. On March 25, 1999, Bayer and Pfizer commenced
suit in the U.S. District Court for the District of New Jersey against Lek for
infringement of the same two Bayer patents originally asserted against Leks 60
mg. formulation. This case was also the subject of a settlement conference. In
September, 1999, a settlement agreement was entered into among the parties
staying this litigation until the expiration of U.S. Patent 4,412,986 on
November 2, 2000. This suit has now been dismissed.
On November 9, 1998, Pfizer received an ANDA notice letter from Martec
Pharmaceutical, Inc. for generic versions (30 mg., 60 mg., 90 mg.) of
. On or about December 18, 1998, Pfizer received a new ANDA certification
letter stating that the ANDA had actually been filed in the name of Martec
Scientific, Inc. On December 23, 1998, Pfizer brought an action against Martec
Pharmaceutical, Inc. and Martec Scientific, Inc. in the U.S. District Court for
the Western District of Missouri for infringement of Bayers
patent relating to
nifedipine of a specific particle size. On January 26, 1999, a second complaint
was filed against Martec Scientific in the U.S. District Court for the Western
District of Missouri based on Martecs new ANDA certification letter. Martec
filed its response to this complaint on February 26, 1999. These actions were
settled and dismissed on consent on July 6, 2000.
On September 26, 2000, Pfizer received an ANDA notice letter from Andrx
Pharmaceuticals, Inc. for a generic version of 60 mg.
. On November
9 Bayer and Pfizer brought suit against Andrx in the U.S. District Court for
the Southern District of Florida for infringement of Bayers U.S. Patent
5,264,446. On February 12, 2001, the Company
received another ANDA notice letter from Andrx, this time for a generic
version of 30 mg.
. This litigation has now been settled in a
settlement agreement that encompasses both the 60 mg. and 30 mg. Andrx
Pfizer filed suit on July 8, 1997, against the FDA in the U.S. District
Court for the District of Columbia, seeking a declaratory judgment and
injunctive relief enjoining the FDA from processing Mylans ANDA or any other
ANDA submission referencing
that uses a different extended-release
mechanism. Pfizers suit alleges that extended-release mechanisms that are not
identical to the osmotic pump mechanism of
dosage forms requiring the filing and approval of suitability petitions under
the Food Drug and Cosmetics Act before the FDA can accept an ANDA for filing.
Mylan intervened in Pfizers suit. On March 31, 1998, the court granted the
governments motion for summary judgment against the Company. On July 16, 1999,
the D.C. Court of Appeals dismissed the appeal on the ground that since the FDA
had not approved any ANDA referencing
that uses a different
extended-release mechanism than the osmotic pump mechanism of
was premature to maintain this action, stating that Pfizer has the right to
bring such an action if, and when, the FDA approves such an ANDA. Subsequent to
FDAs final approval of Mylans ANDA, on December 18, 1999, Pfizer filed suit
against FDA in the United States District Court for the District of Delaware.
The suit alleges that FDA unlawfully approved Mylans 30 mg. extended release
product because FDA had not granted an ANDA suitability petition reflecting a
difference in dosage form from
. As a result of the settlement
agreement with Mylan, Pfizer and the FDA have agreed to dismiss this suit
On February 22, 2001, Biovail Corporation and Biovail Laboratories, Inc.
filed suit against Pfizer Inc., Mylan Laboratories, Inc., and Mylan
Pharmaceuticals, Inc., in the U.S. District Court for the Eastern District of
Virginia, claiming that the February 2000 settlement agreement between Pfizer
and Mylan relating to a 30 mg. extended-release nifedipine tablet product is in
violation of Section 1 of the Sherman Antitrust Act.
As has been publicly reported, the Federal Trade Commission is conducting
a review of brand-name and generic drug litigations, settlements and
agreements. As part of this overall review, documents in connection with
certain of the litigations set forth above have been provided to the
On December 17, 1999, the Company received notice of the filing of an ANDA
by Zenith Goldline Pharmaceuticals for 50 mg. and 100 mg. tablets of sertraline
hydrochloride alleged to be bioequivalent to
. Zenith has certified to
the FDA that it will not engage in the manufacture, use or sale of sertraline
hydrochloride until the expiration of Pfizers U.S. Patent 4,536,518, which
covers sertraline per se and expires December 30, 2005. Zenith has also alleged
in its certification to the FDA that the manufacture, use and sale of Zeniths
product will not infringe Pfizers U.S. Patent 4,962,128, which covers methods
of treating an anxiety-related disorder or Pfizers U.S. Patent 5,248,699,
which covers a crystalline polymorph of sertraline hydrochloride. These patents
expire in November 2009 and August 2012, respectively. On January 28, 2000, the
Company filed a patent infringement action against Zenith Goldline and its
parent Ivax Corporation in the U.S. District Court for the District of New
Jersey for infringement of the 128 and 699 Patents. Zenith Goldline filed its
answer on March 10, 2000, denying infringement. Discovery is in progress and a
bench trial has been set for June 2001.
On February 1, 2000, the Company received notice of the filing of an ANDA
by Novopharm Limited for 50 mg., 100 mg., 150 mg. and 200 mg. tablets of
fluconazole alleged to be bioequivalent to
. Novopharm has certified to
the FDA its position that the Companys U.S. Patent 4,404,216, which covers
fluconazole, is invalid. This patent expires in
January 2004. On March 10, 2000, the Company filed a patent infringement
action under the 216 Patent against Novopharm in the U.S. District Court for
the Northern District of Illinois. Discovery is ongoing. No trial date has been
In April 1998 Warner-Lambert received an ANDA notice from Purepac
Pharmaceutical Co., relating to 100 mg., 300 mg., and 400 mg. gabapentin
capsules, which certified Purepacs opinion that the proposed Purepac products
do not infringe Warner-Lamberts U.S. Patent 4,894,476 directed to gabapentin
monohydrate and that the 476 Patent is invalid in view of the prior art. In
June 1998 Warner-Lambert filed a lawsuit in the U.S. District Court for the
District of New Jersey against Purepac and Faulding Inc., its parent company,
for infringement of the 476 Patent and U.S. Patent 5,084,479 directed to a
method for treating neurodegenerative diseases with compounds including
gabapentin. The defendants filed a counterclaim for unfair competition under
New Jersey law based upon alleged improper listing of the476 Patent in the FDA
Orange Book and alleged absence of probable cause for
filing suit on the 476
and 479 Patents. In August 1999 the court denied the defendants motion for
summary judgment of non-infringement of the 476 and 479 Patents, and in
December 2000 the court denied the Companys motion for summary judgment
dismissing the defendants counterclaim for unfair completion but bifurcated
this counterclaim from the patent infringement claims for discovery and trial.
Discovery on the patent infringement claims is in progress.
In May 1998 Warner-Lambert received two ANDA notice letters from TorPharm,
Inc., relating to 100 mg., 300 mg., and 400 mg. gabapentin capsules, which
certified TorPharms opinion that the proposed products of its Apotex Corp.
agent do not infringe Warner-Lamberts U.S. Patents 4,894,476 and 5,084,479.
Warner-Lambert filed a lawsuit in the U.S. District Court for the Northern
District of Illinois for infringement of the 476 and 479 Patents. In April
1999 the court denied the defendants motion for summary judgment of
non-infringement of the 479 Patent. Discovery is in progress. On March 2 the
court granted the defendants motion for summary judgment of non-infringement
of the 476 Patent.
In November 1999 Warner-Lambert received an ANDA notice letter from
Faulding Inc., related to 600 mg. and 800 mg. gabapentin tablets, which
certified Fauldings opinion that the proposed products of its Purepac
Pharmaceutical Co. subsidiary do not infringe the 476 Patent and that this
patent is invalid in view of the prior art. In December 1999 Warner-Lambert
filed a lawsuit in the U.S. District Court for the District of New Jersey for
infringement of the 476 and 479 Patents. The defendants filed counterclaims
for unfair competition under New Jersey law and federal antitrust law
violations, and in December 2000 the Court denied the Companys motion to
dismiss these counterclaims. Discovery is in progress.
In November 1999 Apotex Corp. and Apotex Inc. filed suit against
Warner-Lambert in the U.S. District Court for the Northern District of Illinois
alleging federal antitrust violations. Warner-Lambert filed a motion to dismiss
the action which was granted. Apotex subsequently added antitrust counterclaims
the copending gabapentin capsule patent infringement suit in the Northern
District of Illinois. This counterclaim has been stayed pending resolution of
the patent infringement issues.
In February 1999 Geneva Pharmaceuticals, Inc., filed an action in the U.S.
District Court for the Eastern District of Michigan against Warner-Lambert for
a declaratory judgment that its proposed 100 mg., 300 mg. and 400 mg.
gabapentin capsule products do not infringe the 476 Patent directed to
gabapentin monohydrate. This action has been transferred to the U.S. District
Court for the District of New Jersey. Discovery is in progress. The Companys
motion to dismiss this complaint and Genevas motion for summary judgment of
non-infringement are pending.
On April 25, 2000, U.S. Patent 6,054,482, which claims anhydrous
gabapentin formulations containing low levels of lactam and mineral acid, was
issued to Warner-Lamberts Godecke Aktiengesellschaft subsidiary (Godecke). This patent was
listed in the FDAs Orange Book under the
tablet products on the same day. On April 28 Purepac Pharmaceutical Co.
(Purepac) and Faulding Inc. filed suit in the U.S. District Court for the
District of New Jersey against Warner-Lambert and Godecke for a declaratory
judgment that the 482 Patent is invalid and would not be infringed by
Purepacs proposed gabapentin capsule and tablet products. On June 15
Warner-Lambert and Godecke moved to dismiss the complaint, and also filed suit
in the same court against Purepac and Faulding Inc. seeking orders enjoining
them from pursuing their declaratory judgment action and compelling them to
submit appropriate certifications to the FDA regarding the 482 Patent. This
suit also alleges infringement of the 482 Patent. On June 15 Warner-Lambert
received a notice letter from Purepac and Faulding Inc. which certified their
position that the proposed Purepac gabapentin tablet and capsule products do
not infringe the 482 Patent. On July 20, Pfizer, Warner-Lambert, and Godecke
filed another suit in federal court in New Jersey against Purepac and Faulding
Inc. for infringement of the 482 Patent. The defendants answer to this last
suit includes counterclaims for antitrust violations under the Sherman Act and
unfair competition. The three suits were consolidated and the April 28 suit was
dismissed by the court. On November 27 the Company filed a motion to dismiss
the counterclaims in the July 20 suit and on January 16, 2001, the defendants
filed a motion for summary judgment of non-infringement. Discovery is in
On June 15, 2000, Warner-Lambert received a notice letter from TorPharm,
Inc., certifying its opinion that the proposed gabapentin capsule products of
its Apotex Corp. agent do not infringe the 482 Patent. On July 20 Pfizer,
Warner-Lambert, and Godecke filed suit in the U.S. District Court for the
Northern District of Illinois for infringement of the 482 Patent. The
defendants answer includes counterclaims for antitrust violations under the
Sherman Act. On November 6 the Company filed a motion to dismiss these
counterclaims. On March 7 the defendants filed a motion for summary judgment
On July 25, 2000, Warner-Lambert received a notice letter from Teva
Pharmaceuticals USA (Teva), relating to 600 mg. and 800 mg. gabapentin tablets,
which certified Tevas opinion that its proposed products do not infringe the
482 Patent, and on September 7 a similar notice letter relating to 100 mg.,
300 mg., and 400 mg. gabapentin capsules, which also stated Tevas opinion that
the 482 Patent is invalid. On August 24 and September 20, Pfizer,
Warner-Lambert, and Godecke filed two lawsuits, for tablets and capsules
respectively, in the U.S. District Court for the District of New Jersey against
Teva and Teva Pharmaceuticals Industries Ltd. for infringement of the
On October 2, 2000, the Company filed a motion with the Federal Judicial
Panel on Multidistrict Litigation to consolidate all of the above-identified
patent cases involving U.S. Patent 6,054,482 for pretrial proceedings in the
U.S. District Court for the District of New Jersey. Purepac/Faulding Inc. and
Apotex/TorPharm filed oppositions. This motion was granted on February 5.
In November 2000, Warner-Lambert and Godecke received notice letters from
Zenith Goldline Pharmaceuticals, Inc., relating to its proposed 100 mg., 300
mg. and 400 mg. gabapentin capsules, certifying Zeniths opinion that the
Companys 482 Patent is invalid. On December 14, Pfizer Inc., Warner-Lambert
and Godecke filed suit in the U.S. District Court for the District of New
Jersey against Zenith Laboratories, Inc., Zenith Goldline Pharmaceuticals, Inc.
and Ivax Corporation (Zeniths parent company) for infringement of the 482
Patent. In December 2000 Warner-Lambert received a notice letter from Zenith
Goldline Pharmaceuticals, Inc. notifying Warner-Lambert that Zenith had filed
an ANDA on 600 mg. and 800 mg. gabapentin tablets and certifying Zeniths
opinion that the 482 Patent is invalid, and also that the 476 Patent and the
479 Patent are both invalid and would not be infringed by the manufacture, use
or sale of the proposed Zenith tablet product. In January and February the
Company filed suits against Zenith Laboratories, Inc., Zenith Goldline Pharmaceuticals, Inc. and Ivax
Corporation in the U.S. District Court for the District of New Jersey for
infringement of the 482 Patent (January suit) and the 476 and 479 Patents
(February suit). In February 2001, the Company received a comparable notice
letter from Zenith directed to proposed 100 mg., 300 mg. and 400 mg. gabapentin
tablet products. The letter is being evaluated by the Company.
In February 2001, Warner-Lambert received a notice letter from EON Labs
Manufacturing, Inc. relating to its proposed 100 mg., 300 mg. and 400 mg.
gabapentin capsule products, certifying EONs opinion that the Companys 482,
476 and 479 Patents would not be infringed by the manufacture, use or sale of
the proposed EON products. This letter is being evaluated by the Company
On April 11, 2000, the University of Rochester filed a patent infringement
action in the U.S. District Court for the Western District of New York against
the Company, G.D. Searle & Co., Inc., Monsanto Co., and Pharmacia Corp., under
its U.S. Patent 6,048,850, relating to the use of COX-2 inhibiting
compounds. It is alleged that sales of
infringe the broad method of
use claims of this patent. The Company has answered denying infringement.
Discovery is in progress. No trial date has been set.
In January 1999 Warner-Lambert received a letter from Teva Pharmaceuticals
USA informing it that Teva had filed an ANDA on 40 mg. quinapril hydrochloride
tablets allegedly bioequivalent to the Companys
product. This letter
also certified Tevas opinion that the Companys U.S. Patent 4,473,450, which
is directed to stable formulations of ACE inhibitor compounds and expires in
February 2007, is invalid, and further informed us that manufacture, use and
sale of the proposed product would await expiration of the basic product patent
on quinapril hydrochloride (U.S. Patent 4,344,949) in October 2002. In March
Warner-Lambert filed suit against Teva Pharmaceuticals USA in the U.S. District
Court for the District of New Jersey for infringement of the 450 Patent.
Discovery is in progress. No trial date has yet been scheduled.
Two additional ANDA notification letters related to quinapril
hydrochloride tablets were received by the Company in January 2001, one from
Geneva Pharmaceuticals, Inc. and another from Andrx Pharmaceuticals, LLC. These
letters certify opinions that the 450 Patent is invalid and would not be
infringed by the proposed generic products.
Schneider Catheter Litigation
On July 28, 2000, Dr. Tassilo Bonzel filed a suit against the Company and
various currently or formerly affiliated codefendants in Minnesota state court
alleging breach of contract, fraudulent transfer of his license
Schneider (Europe) AG, unjust enrichment, breach of fiduciary duty, tortious
interference with contractual relationship, and civil conspiracy, and seeking a
declaratory judgment that Dr. Bonzel is free to terminate the aforementioned
license agreement. The claims arise from the Companys 1998 sale of the
Schneider companies to Boston Scientific Corporation (BSC), which is named in
Dr. Bonzels complaint as an involuntary plaintiff. On August 28 the Company
and BSC removed the suit to the U.S. District Court for the District of
Minnesota and on August 30 Dr. Bonzel filed a motion to remand it to state
court, which the Company and BSC opposed. This motion to remand was granted on
February 6. Additionally, on September 18 BSC filed a motion with the federal
court in Minnesota to be dismissed from this action as an involuntary
plaintiff. This motion was also granted on February 6. On September 5 BSC
filed an action in the U.S. District Court for the District of Massachusetts
for a declaratory judgment that its license with Dr. Bonzel cannot be revoked
and thus that it would not be infringing Dr. Bonzels patents on rapid exchange
catheters. This Massachusetts action has been dismissed on the basis of lack of
justiciable case or controversy.
Trademark and Unfair Competition
On September 22, 1999, the jury in a trademark-infringement litigation
brought against Pfizer in the U.S. District Court for the Central District of
California by Trovan Ltd. and Electronic Identification Devices, Ltd., relating
to use of the
mark for trovafloxacin issued a verdict in favor of the
plaintiffs with respect to liability, holding that the Company had infringed
Trovan Ltd.s mark and had acted in bad faith. Following a further damage
trial, on October 12, 1999, the jury awarded Trovan Ltd. a total of $143
million in damages, comprising $5 million actual damages, $3 million as a
reasonable royalty and $135 million in punitive damages. The court held a
hearing on December 27, 1999, on whether to award the plaintiffs profits based
on the Companys sales of
and, if so, the amount of same. On February
24, 2000, the court entered judgment on the jury verdict and enjoined the
Companys use of the
mark effective October 16, 2000. The plaintiffs
request to be awarded the Companys profits from
sales and for treble
damages was denied. Following a hearing on March 24, 2000 the court vacated its
previous rulings based on the jury verdicts, including the injunction against
continued use of
and the cancellation of the Companys U.S. trademark
registration, and granted the motion for mistrial. The court also granted the
Companys remittitur motions, eliminating the reasonable royalty award ($3
million) and reducing the maximum damages award from $8 million to $500,000 and
the maximum enhanced award from $135 million to $1.5 million. The plaintiffs
have appealed to the Ninth Circuit Court of Appeals the district courts
refusal to enjoin the Companys continued use of the
Additionally, the district court (at the plaintiffs request) has certified
certain legal issues to the Ninth Circuit for determination before the case is
On October 5, 1998, Schering-Plough, Inc., sought, in the U.S. District
Court for the Southern District of New York, and was denied, a temporary
restraining order and moved for a temporary injunction based on its allegations
that Pfizer breached a 1996 settlement agreement arising from an earlier Lanham
Act suit involving the promotion of
, in competition with Scherings
Claritin. On appeal to the Second Circuit Court of Appeals, the decision
denying Scherings request for a preliminary injunction was vacated and the
case was remanded to the District Court. The Second Circuit found that the
District Court should have made more detailed findings on the reliability of
the surveys used to support the motion. Following a hearing, the District Court
preliminary injunction which prohibits Pfizer from claiming that
is non-sedating or
essentially non-sedating. A trial on a permanent injunction is anticipated in 2002.
Products Liability Litigation
As previously disclosed, a number of lawsuits and claims have been brought
against the Company and Shiley Incorporated, a wholly owned subsidiary,
alleging either personal injury from fracture of 60 degree or 70 degree Shiley
Convexo Concave (C/C) heart valves, or anxiety that properly functioning
implanted valves might fracture in the future, or personal injury from a
prophylactic replacement of a functioning valve.
In an attempt to resolve all claims alleging anxiety that properly functioning
valves might fracture in the future, the Company entered into a settlement
agreement in January 1992 in Bowling v. Shiley, et al., a case brought in the
U.S. District Court for the Southern District of Ohio, that established a
worldwide settlement class of people with C/C heart valves and their spouses,
except those who elected to exclude themselves. The settlement provided for a Consultation Fund of $90 million,
which was fixed by the number of claims filed, from which valve recipients
received payments that are intended to cover their cost of consultation with
cardiologists or other health care providers with respect to their valves. The
settlement agreement established a second fund of at least $75 million to
support C/C valve-related research, including the development of techniques to
identify valve recipients who may have significant risk of fracture, and to
cover the unreimbursed medical expenses that valve recipients may incur for
certain procedures related to the valves. The Companys obligation as to
coverage of these unreimbursed medical expenses is not subject to any dollar
limitation. Following a hearing on the fairness of the settlement, it was
approved by the court on August 19, 1992, and all appeals have been exhausted.
Generally, plaintiffs in heart valve litigations seek money damages. Based on
the experience of the Company in defending these claims to date, including
insurance proceeds and reserves, the Company is of the opinion that such
actions should not have a material adverse effect on the financial position or
results of the Company. Litigation involving insurance coverage for the
Companys heart valve liabilities has been resolved.
, a Warner-Lambert oral therapy for the treatment of type 2
diabetes, was launched in the United States in March 1997 and withdrawn from
the market in March 2000, following reports of liver damage, including liver
failure requiring liver transplants, and death. The package insert
was revised in October 1997 in response to post-marketing reports of adverse
liver events. The revised labeling recommended that physicians monitor liver
enzymes periodically. The labeling subsequently was changed three times to
increase the recommended frequency of liver enzyme monitoring and to add other
information regarding indications and adverse liver events.
s withdrawal from the market, a number of suits and claims
against Warner-Lambert (and in some instances against the Company as well) have
been filed. As of the beginning of January 2001, 46 Federal and 16 state class
action suits have been filed seeking medical monitoring; Federal and state
suits seeking damages or restitution for personal injuries on behalf of about
patients; and claims on behalf of 160
The cases filed in or removed to Federal courts have been consolidated for
certain pretrial purposes in the U.S. District Court for the Southern District
of New York by order of the Judicial Panel on Multi-District Litigation, and
the class actions seeking medical monitoring are being consolidated under a
single class complaint. Most of these cases are in early stages of discovery.
The Company is defending these actions and, considering its insurance and
reserves, is of the opinion that these actions should not have a material
adverse effect on the financial position or results of the Company.
During May and June, 1999, the FDA and the European Unions Committee for
Proprietary Medicinal Products (CPMP) reconsidered the approvals to market
, a broad-spectrum antibiotic, following post-market reports of severe
adverse liver reactions to the drug. On June 9, 1999, the Company announced
that, regarding the marketing of
in the United States, it had agreed to
restrict the indications, limit product distribution, make certain other
labeling changes and communicate revised warnings to health care professionals
in the United States. On July 1, 1999, Pfizer received the opinion of the CPMP
recommending a one-year suspension of the licenses to market
European Union. The CPMP opinion has been finalized in a Final Decision by the
Since June 1999, several suits, in both Federal and state courts, and
claims, on behalf of approximately 30
patients have been received by the
Company alleging liver injuries due to ingestion of
. Approximately half of these matters have been
resolved. There are also three purported state court class actions seeking
damages and injunctive relief on behalf of
patients and their spouses.
The cases are in early stages of discovery.
The Company is defending these actions and, considering its insurance and
reserves, is of the opinion that these actions should not have a material
adverse effect on the financial position or results of the Company.
Through the early 1970s, Pfizer Inc. (Minerals Division) and Quigley
Company, Inc. (Quigley), a wholly owned subsidiary, sold a minimal amount of
one construction product and several refractory products containing some
asbestos. These sales were discontinued thereafter. Although these sales
represented a minor market share, the Company has been named as one of a number
of defendants in numerous lawsuits. These actions, and actions related to the
Companys sale of talc products in the past, claim personal injury resulting
from exposure to asbestos-containing products, and nearly all seek general and
punitive damages. In these actions, the Company or Quigley is typically one of
a number of defendants, and both have been members of the Center for Claims
Resolution (the CCR), a joint defense organization of several defendants that
has been defending these claims. The Company and Quigley have been responsible
for varying percentages of defense and liability payments for all members of
the CCR. With the reformation and/or dissolution of CCR, the Company and
Quigley will defend the litigation separately from other CCR members. A number
of cases alleging property damage from asbestos-containing products installed
in buildings have also been brought against the Company, but most have been
resolved and none are active.
As of December 2000, there were 58,346 personal injury claims pending
against Quigley and 33,165 such claims against the Company (excluding those
that are inactive or have been settled in principle), and 67 talc cases against
The Company believes that its costs incurred in defending and ultimately
disposing of the asbestos personal injury claims, as well as the property
damage and talc claims, will be largely covered by insurance policies issued by
several primary insurance carriers and a number of excess carriers that have
agreed to provide coverage, subject to deductibles, exclusions, retentions and
policy limits. Litigation against excess insurance carriers seeking damages
and/or declaratory relief to secure their coverage obligations has been largely
From 1967 to 1982, a Warner-Lambert subsidiary owned American Optical
Company, which at certain times manufactured a line of personal protective
clothing and respirators for use in general industrial settings. Certain of the
protective clothing items (e.g., certain gloves) contained asbestos. American
Optical discontinued production of protective clothing in 1976, and sold its
protective clothing business in its entirety in 1977. In May 1982,
Warner-Lambert sold American Optical. As part of that sale, the Warner-Lambert
subsidiary agreed to indemnify the purchaser against product liability claims
arising out of alleged use or exposure to American Optical products up to the
date of closing.
As of December 2000, American Optical was named a defendant in lawsuits
involving approximately 41,429 individual plaintiffs. Approximately two-thirds
of these lawsuits involve claims for asbestos-related disease developed as a
result of exposure to asbestos-containing protective clothing allegedly
manufactured by American Optical. The remaining one-third consists of claims
for silica-related disease developed as a result of exposure to silica while
using allegedly defective respirators manufactured by American Optical.
Based on the Companys experience in defending the claims to date and
considering its insurance and reserves, the Company is of the opinion that the
actions should not have a material adverse effect on the financial position or
results of the Company.
In October 1999 the Company was sued in an action seeking unspecified
damages, costs and attorneys fees on behalf of a purported class of people
whose dogs had suffered injury or death after ingesting
antiarthritic medication for older dogs. The suit, which was filed in state
court in South Carolina, is in the early pretrial stages. The Company is
defending this action and is of the opinion that it should not have a material
adverse effect on the financial position or results of the Company.
FDA administrative proceedings relating to
are pending, principally
an industry-wide call for data on all anti-plaque products by the FDA. The
call-for-data notice specified that products that have been marketed for a
material time and to a material extent may remain on the market pending FDA
review of the data, provided the manufacturer has a good faith belief that the
product is generally recognized as safe and effective and is not misbranded.
The Company believes that
satisfied these requirements and prepared a
response to the FDAs request, which was filed on June 17, 1991. This filing,
as well as the filings of other manufacturers, is still under review and is
currently being considered by an FDA Advisory Committee. The Committee has
issued a draft report recommending that plaque removal claims should not be
permitted in the absence of data establishing efficacy against gingivitis. The
process of incorporating the Advisory Committee recommendations into a final
monograph is expected to take several years. If the draft recommendation is
ultimately accepted in the final monograph, although it would have a negative
impact on sales of
, it will not have a material adverse effect on the
sales, financial position or results of the Company.
On January 15, 1997, an action was filed in Circuit Court, Chambers
County, Alabama, purportedly on behalf of a class of consumers, variously
defined by the laws or types of laws governing their rights and encompassing
residents of up to 47 states. The complaint alleges that the Companys claims
were untrue, entitling them to a refund of their purchase price for
purchases since 1988. The court has orally issued an order denying class
Since December 1998, six actions have been filed, in state courts in
Illinois and Louisiana, purportedly on behalf of statewide
or nationwide classes of consumers who allege that Pfizers and/or
Warner-Lamberts and other manufacturers advertising and promotional claims
and other pediculicides were untrue,
entitling them to refunds, other damages and/or injunctive relief. One of the
Texas cases has been voluntarily dismissed, the Louisiana case has been
resolved, and we obtained summary judgment in the California case. Proceedings in the other Texas case and Illinois
cases are still in early stages.
The Company is defending these actions and is of the opinion that they
should not have a material adverse effect on the financial position or results
of the Company.
In December 1999 and January 2000, two suits were filed in California
state courts against the Company and other manufacturers of zinc
oxide-containing powders. The first suit was filed by the Center for
Environmental Health and the second was filed by an individual plaintiff on
behalf of a purported class of purchasers of baby powder products. The suits
generally allege that the label of
powder violates Californias
Proposition 65 by failing to warn of the presence of lead, which is alleged
to be a carcinogen. In January, 2000, the Company received a notice from a
California environmental group alleging that the labeling
ointment and powder also violates Proposition 65 by failing to
warn of the presence of cadmium, which is alleged to be a carcinogen. Several
other manufacturers of zinc oxide-containing topical baby products have
received similar notices. The Company believes that the labeling for
complies with applicable legal requirements.
In June, the Ministry of Justice of the State of Sao Paulo, Brazil,
commenced a civil public action against the Companys Brazilian subsidiary,
Laboratorios Pfizer Ltda. (Pfizer Brazil) asserting that during a period in
1991 Pfizer Brazil withheld sale of the pharmaceutical product
violation of antitrust and consumer protection laws. The action sought the
award of moral, economic and personal damages to individuals and the payment to
a public reserve fund. In February 1996, the trial court issued a decision
holding Pfizer Brazil liable. The trial courts opinion also established the
amount of moral damages for individuals who might make claims later in the
proceeding and set out a formula for calculating the payment into the public
reserve fund which could have resulted in a sum of approximately $88 million.
Pfizer Brazil appealed this decision. In September 1999, the appeals court
issued a ruling upholding the trial courts decision as to liability. However,
the appeals court decision overturned the trial courts decision concerning
damages, ruling that criteria to apply in the calculation of damages, both as
to individuals and as to payment of any amounts to the reserve fund, should be
established only in a later stage of the proceeding. The Company believes that
this action should not have a material adverse effect on the financial position
or results of the Company.
A wholly-owned subsidiary of Warner-Lambert has been named as a defendant
in class actions filed in Puerto Rico Superior Court by current and former
employees from the Vega Baja, Carolina and Fajardo plants, as well as Kelly
Services temporary employees assigned to those plants. The lawsuits seek
monetary relief for alleged violations of local statutes and decrees relating
to meal period payments, minimum wage, overtime and vacation pay. The Company
is defending these actions and is of the opinion that they should not have a
material adverse effect on the financial position or results of the Company.
In 1993, both Pfizer and Warner-Lambert were named, together with numerous
other manufacturers of brand-name prescription drugs and certain companies that
distribute brand-name prescription drugs, in suits in federal and state courts
brought by various groups of retail pharmacy companies, alleging that the
manufacturers violated the Sherman Act by agreeing not to give retailers
certain discounts and that the failure to give such discounts violated the
Robinson Patman Act. A class action was brought on the Sherman Act claim, as
well as additional actions by approximately 3,500 individual retail pharmacies
and a group of chain and supermarket pharmacies (the individual actions) on
both the Sherman Act and Robinson Patman Act claims. A retailer class was
certified in 1994 (the Federal Class Action). In 1996, fifteen manufacturer
defendants, including Pfizer and Warner-Lambert, settled the Federal Class
Action. Pfizers share was $31.25 million and Warner-Lamberts share was $15.1
million. Trial began in September 1998 for the class case against the
non-settlers, and the District Court also permitted the opt-out plaintiffs to
add the wholesalers as named defendants in their cases. The District Court
dismissed the case at the close of the plaintiffs evidence. The plaintiffs
appealed and, on July 13, 1999, the Court of Appeals upheld most of the
dismissal but remanded on one issue, while expressing doubts that the
plaintiffs could prove any damages. The District Court has since opined that
the plaintiffs cannot prove such damages.
Retail pharmacy cases also have been filed in state courts in five states,
and consumer class actions were filed in state courts in fourteen states and
the District of Columbia alleging injury to consumers from the failure to give
discounts to retail pharmacy companies. Most of the consumer class actions have
been settled in principle.
In addition to its settlement of the retailer Federal Class Action (see
above), Pfizer and Warner-Lambert have also settled several major opt-out
retail cases, and along with other manufacturers: (1) have entered into
agreements to settle all outstanding consumer class actions, which settlements
are going through the approval process in the various courts in which the
actions are pending; and (2) have settled the California consumer case.
The Company believes that these brand-name prescription drug antitrust
cases, which generally seek damages and certain injunctive relief should not
have a material adverse effect on the financial position or results of the
The Federal Trade Commission opened an investigation focusing on the
pricing practices at issue in the above pharmacy antitrust litigation. In July
1996, the Commission issued subpoenas for documents to both Pfizer and
Warner-Lambert, among others, to which both responded. A second subpoena was
issued to both companies for documents in May 1997 and both again responded. We
are not aware of any further activity.
Former Food Science Division
In 1999, the Company pleaded guilty to one count of price fixing of sodium
erythorbate from July 1992 until December 1994, and one count of market
allocation of maltols from December 1989 until December 1995, and paid a total
fine of $20 million. The activities at issue involved the Companys former Food
Science Group, a division that manufactured food additives and that the Company
divested in 1996. The Department of Justice has stated that no further
antitrust charges will be brought against the Company relating to the former
Food Science Group, that no antitrust charges will be brought against any
current director, officer or employee of the Company for conduct related to the
products of the former Food Science Group, and that none of the Companys
current directors, officers or employees was aware of any aspect of the
activity that gave rise to the violations. Five purported class action suits
products have been filed against the Company; two in California
State Court, and three in New York Federal Court. The Company does not
believe that this plea and settlement, or civil litigation involving
these products, should have a material adverse effect on the financial position or
results of the Company.
The operations of the Company are subject to federal, state, local and
foreign environmental laws and regulations. Under the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended
(CERCLA or Superfund), the Company has been designated as a potentially
responsible party by the United States Environmental Protection Agency with
respect to certain waste sites with which the Company may have had direct or
indirect involvement. Similar designations have been made by some state
environmental agencies under applicable state Superfund laws. Such designations
are made regardless of the extent of the Companys involvement. The Company
owns or previously owned several sites for which it may be the sole responsible
party. There are also claims that the Company may be a responsible party or
participant with respect to several waste site matters in foreign
jurisdictions. Such claims have been made by the filing of a complaint, the
issuance of an administrative directive or order, or the issuance of a notice
or demand letter. These claims are in various stages of administrative or
judicial proceedings. They include demands for recovery of past governmental
costs and for future investigative or remedial actions. In many cases, the
dollar amount of the claim is not specified. In most cases, claims have been
asserted against a number of other entities for the same recovery or other
relief as was asserted against the Company. The Company is currently
participating in remedial action at a number of sites under federal, state,
local and foreign laws.
To the extent possible with the limited amount of information available at
this time, the Company has evaluated its responsibility for costs and related
liability with respect to the above sites and is of the opinion that the
Companys liability with respect to these sites should not have a material
adverse effect on the financial position or results of the Company. In arriving
at this conclusion, the Company has considered, among other things, the
payments that have been made with respect to the sites in the past; the
factors, such as volume and relative toxicity, ordinarily applied to allocate
defense and remedial costs at such sites; the probable costs to be paid by the
other potentially responsible parties; total projected remedial costs for a
site, if known; existing technology; and the currently enacted laws and
regulations. The Company anticipates that a portion of these costs and related
liability will be covered by available insurance.
FDA Required Post-Marketing Reports
In April 1996, Pfizer received a Warning Letter from the FDA relating to
the timeliness and completeness of required post-marketing reports for
pharmaceutical products. The letter did not raise any safety issue about Pfizer
drugs. The Company has been implementing remedial actions designed to remedy
the issues raised in the letter. During 1997, the Company met with the FDA to
apprise them of the scope and status of these activities. A review of the
Companys new procedures was undertaken by FDA in 1999. The Company and Agency
met to review the findings of this review and agreed that commitments and
remedial measures undertaken by the Company related to the Warning Letter have
been accomplished. The Company agreed to keep the Agency informed of its
activities as it continues to modify its processes and procedures.
Certain employees of Warner-Lambert were served with subpoenas in January
2000, by the U.S. Attorneys office in Boston, Massachusetts, directing them to
provide testimony before a federal grand jury in Boston. The U.S. Attorneys
office is conducting an
inquiry into Warner-Lamberts promotion of
. The Company is cooperating with the inquiry and cannot predict what the outcome
of the investigation will be.
In addition, a former employee of Warner-Lambert has commenced a civil
lawsuit in the U.S. District Court for the District of Massachusetts against
Warner-Lambert, on behalf of the United States, under 31 U.S.C. 3730. The
lawsuit alleges that the company has violated the Federal False Claims Act
based on certain alleged sales and marketing practices concerning its drugs
. The Company is defending this action and is of the
opinion that it should not have a material adverse effect on the financial
position or results of the Company.
In November 1999, following the announcement by Warner-Lambert of its
executions of the American Home Products Corporation (AHP) Merger Agreement,
Pfizer filed suit against Warner-Lambert, its board of directors and AHP,
seeking to invalidate certain provisions in the AHP Merger Agreement and enjoin
their implementation. Pursuant to a settlement agreement executed on February
6, 2000, in connection with the termination of the AHP Merger Agreement and the
execution of the Pfizer Merger Agreement, Warner-Lambert, AHP and Pfizer
entered into settlement agreements with respect to this litigation. Shortly
thereafter the litigation against AHP was dismissed with prejudice and the
litigation between Pfizer and Warner-Lambert was dismissed without prejudice.
Warner-Lambert, its Directors and AHP have been named in approximately 40
lawsuits in Delaware Chancery Court, one lawsuit in Morris County, New Jersey,
and two lawsuits in federal court in New Jersey brought on behalf of purported
classes of Warner-Lamberts shareholders. These lawsuits involve allegations
similar to those contained in Pfizers lawsuit, referred to above, and contain
additional allegations, including that the consideration to be paid to
Warner-Lamberts shareholders in the proposed merger with AHP was inadequate.
The Company is defending these actions and is of the opinion that they should
not have a material adverse effect on the financial position or results of the
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
EXECUTIVE OFFICERS OF THE COMPANY
As of March 8, 2001, the following executive officers of the
Company hold the offices indicated until their successors are chosen and
qualified after the next annual meeting of shareholders.
M. Kenneth Bowler
Vice President Federal Government Relations
Loretta V. Cangialosi
Vice President; Corporate Controller
C. L. Clemente
Executive Vice President, Corporate Affairs; Secretary
and Corporate Counsel; Member of the Pfizer Inc Leadership Team
Peter B. Corr
Senior Vice President; Executive Vice President,
Pfizer Global Research and Development; President,
Gary N. Jortner
Vice President; Senior Vice President, Product
Development Pfizer Pharmaceuticals Group
Karen L. Katen
Senior Vice President; Executive Vice President
Pfizer Pharmaceuticals Group and President U.S.
Pharmaceuticals; Member of the Pfizer Inc Leadership
J. Patrick Kelly
Vice President; Senior Vice President Worldwide
Marketing Pfizer Pharmaceuticals Group
Alan G. Levin
Henry A. McKinnell
Chief Executive Officer and President; President Pfizer
Pharmaceuticals Group; Member of the Pfizer
Inc Leadership Team
Paul S. Miller
Executive Vice President; General Counsel; Member of
the Pfizer Inc Leadership Team
George M. Milne, Jr.
Senior Vice President; Executive Vice President,
Pfizer Global Research and Development; President,
Worldwide Strategic and Operations Management
John F. Niblack
Vice Chairman; President, Pfizer Global Research and
Development; Member of the Pfizer Inc Leadership Team
Robert W. Norton
Senior Vice President, Corporate Human Resources;
Member of the Pfizer Inc Leadership Team
Richard A. Passov
Vice President; Treasurer
David L. Shedlarz
Executive Vice President and Chief Financial Officer;
Member of the Pfizer Inc Leadership Team
Mohand Sidi Said
Vice President; Senior Vice President Pfizer
Pharmaceuticals Group and Area President
Asia/Africa/Latin America/Middle East
William C. Steere, Jr.
Chairman of the Board
Frederick W. Telling
Vice President, Corporate Strategic Planning and Policy
Information concerning Messrs. Steere and Shedlarz, Ms. Katen and Drs.
McKinnell and Niblack is incorporated by reference from the discussion under
Nominees for Directors Whose Terms Expire in 2004
Terms Expire in 2003
Named Executive Officers Who Are Not Directors
proxy statement for the 2001 Annual Meeting of Shareholders.
M. Kenneth Bowler
Dr. Bowler joined us in 1989 and was elected Vice President Federal
Government Relations in 1990. He formerly served as Staff Director for the
House Ways and Means Committee. Dr. Bowler also was on the faculty of the
University of Maryland as an Assistant Professor in the Political Science
Loretta V. Cangialosi
Ms. Cangialosi joined us in 1993 as Assistant Manager, Corporate Ledger in the
Controllers Division. In 1995 she was named Manager, External Financial
Reporting and in 1997 became Director, Accounting Advisory Services. Ms.
Cangialosi was named Senior Director, Corporate Accounting in January 1999, and
in September 1999 was elected our Vice President; Corporate Controller.
C. L. Clemente
Mr. Clemente joined us in the Legal Division in 1964 and has served in a number
of domestic and international positions. In 1992, he was elected Senior Vice
President Corporate Affairs; Secretary and Corporate Counsel. Mr. Clemente
served in that capacity until he was elected our Executive Vice
President Corporate Affairs; Secretary and Corporate Counsel in May 1999. He is a member
of the Pfizer Inc Leadership Team.
Peter B. Corr
Dr. Corr was appointed Senior Vice President, Pfizer Inc., Executive Vice
President, Pfizer Global Research and Development, and President, Worldwide
Development upon the acquisition of Warner-Lambert in June 2000. Previously,
Dr. Corr was Vice President, Warner-Lambert and President,
Warner-Lambert/Parke-Davis Pharmaceutical Research and Development from 1998 to
June 2000. He was Senior Vice President, Discovery Research, Monsanto/Searle
from 1996 to 1998; and Vice President, Discovery Research, Monsanto/Searle from
1994 to 1996.
Gary N. Jortner
Mr. Jortner joined us in 1973 as a Systems Analyst for Pfizer Pharmaceuticals.
He has been one of our Vice Presidents since 1992 and was appointed Group Vice
President, Disease Management U.S. Pharmaceuticals Group in 1994. In 1997,
he became Vice President, Product Development Pfizer Pharmaceuticals Group,
and was promoted to Senior Vice President, Product Development Pfizer
Pharmaceuticals Group in 1998.
J. Patrick Kelly
Mr. Kelly joined us in 1981 as a Marketing Research Associate in the
Pharmaceuticals Division. In 1996, he was elected one of our Vice Presidents
and, in 1997, was named Senior Vice President, Disease Management U.S.
Pharmaceuticals. Later that year he became Vice President Pfizer
Pharmaceuticals Group and Senior Vice President U.S. Pharmaceuticals. In
1998, Mr. Kelly was named Senior Vice President Worldwide Marketing Pfizer
Alan G. Levin
Mr. Levin joined us in 1987 as Senior Operations Auditor for the Controllers
Division. He was elected Treasurer in 1995 and in 1997 was named a Vice
President of the Company with additional oversight responsibilities for the
Corporate Tax Division. In August 2000, Mr. Levin was elected Vice President
Paul S. Miller
Mr. Miller joined the Legal Division in 1971. In 1992, he was elected Senior
Vice President and General Counsel. He has served in his current capacity as
Executive Vice President
and General Counsel since May 1999. He is a member of
the Pfizer Inc Leadership Team.
George M. Milne, Jr.
Dr. Milne joined us in 1970 as a Research Scientist. He was appointed
President of our Central Research Division in 1993. In May 1999 Dr. Milne was
elected a Senior Vice President of the Company and in April 2000 was named
Executive Vice President, Pfizer Global Research and Development and President,
Worldwide Strategic and Operations Management. Dr. Milne is a Director of
Mettler-Toledo Corporation, Inc.
Robert W. Norton
Mr. Norton joined us in 1969 in the Corporate Personnel Division. He has held a
number of international as well as domestic positions in human resources and
from 1985 to 1997 he was our senior International Human Resources Executive.
In 1997, he was appointed Senior Vice President, Employee Resources, Pfizer
Pharmaceuticals Group and elected Senior Vice President, Corporate Human
Resources, in February 2001. He is a member of the Pfizer Inc Leadership
Richard A. Passov
Mr. Passov joined us in 1997 as Assistant Treasurer, Treasury Planning and
became Assistant Treasurer, Affiliate Finance in January 2000. He was elected
Vice President; Treasurer in August 2000. From 1991 to 1997, Mr. Passov worked
for Intel Corporation.
Mohand Sidi Said
Mr. Sidi Said joined us in 1965 as a professional sales representative. During
his career, he has held a variety of management assignments in Algeria,
Morocco, Kenya, Egypt, France, Belgium and the United States. In 1996, he was
elected one of our Vice Presidents and was also named Senior Vice President
Pfizer Pharmaceuticals Group and Area President Asia/Africa/Latin
Frederick W. Telling
Dr. Telling joined Pfizer Pharmaceuticals and Diagnostic Products Group in 1977
and progressed through a number of positions of increasing responsibility
before being named Director of Planning for the Pharmaceuticals Division in
1981. In 1987, he was named Vice President of Planning and Policy for the U.S.
Pharmaceuticals Group. In 1994, Dr. Telling was elected our Vice President,
Corporate Strategic Planning and Policy.