Great Days For Senator Edwards

Eighty two people have died in a Pfizer drug trial. Not only will that provide 82 clients for Edwards's supporters in the trial bar, but it has caused Pfizer to suspend development of a promising new blockbuster drug for cholesterol management.

The announcement raises new questions about one of the pharmaceutical industry's most anticipated new ideas. Several companies have made investments in this area in the hunt for badly needed sales and profit growth.

Just two days earlier, in an upbeat presentation to analysts, Pfizer research chief John LaMattina reiterated the company's backing for the compound. "We believe this is the most important new development in cardiovascular medicine in years," he said.

Senator Edwards swore in 2004 that he would "fight the drug companies." He must be happy to see one of the sector's leaders imperiled. The WSJ News page (paid link sorry) says:

[CEO Jeffrey] Kindler, a lawyer whose nearly five years at Pfizer account for his entire résumé in the pharmaceutical industry, now faces a daunting challenge. He was tapped only this past July over two longtime Pfizer executives to become chief executive officer of the languishing giant. He will have to move even more aggressively to cut costs and restock the company's medicine chest, possibly through acquisitions.

Building the pipeline through M&A instead of R&D is a good move but it will save far fewer lives.

There is no government angle here, I'm not castigating the FDA. I'm just reminding the Pharma-haters of the biggest natural predator to pharmaceutical development: plain old experimental failure. Two days takes a pipeline drug from rescuing your company to a tax write off.

To continue with research we will need to continue to reward those who are successful. Another CEO, Eli Lilly's Sidney Taurel, is interviewed by Rob Pollack of the WSJ Ed Page. His editorial was promoted to the free site yesterday. He says in a single column what I have been beating the drum about since I started blogging: research's access to capital is severely threatened by government policy.

"I've seen the bad effects that government policies of price controls and overregulation can have," Mr. Taurel tells me. "When you look at Europe 30 years ago, that was where most of the innovation in pharmaceuticals used to take place. When I joined the industry, the No. 1 was Roche, and then it was Hoechst and Bayer and all these companies, which today are not as big. What 30 years of price controls have done is more and more of the research has come here. I think only about 25% of the total research in the whole industry is done in Europe."

But this is no reason for complacency, Mr. Taurel stresses. We are at a "crossroads" in the U.S., he says, "between people who want a government-run system and those of who want a free market" in health care.

Read that one coast to coast. Please.

UPDATE: Fixed the first link (ThreeSources apologizes for any inconvenience). Here is a (free) link to a CNBC video.

Pharmaceuticals Posted by jk at December 4, 2006 10:40 AM