Good Counsel - Pharmaceutical Executive

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Good Counsel
Law the Pfizer way: Jeffrey Kindler cracks down on counterfeiters, builds a private police force, and makes nice with OIG. Then he hires a foreign-policy expert.


Pharmaceutical Executive


"Leadership is really much more important than management at this level," Kindler says. "And leadership means trying to communicate a set of values and missions to the organization, and then empowering many talented, skilled people to implement them."

New Strategies

Under Kindler, lawyers seem to stretch for new approaches to problems, and to feel free to enlist outside help from unusual sources. Marc Brotman, a Pfizer lawyer assigned to the Viagra group, thought about the nation's e-mail inboxes filling up with Viagra spam (none of which is sent by Pfizer) and called Microsoft for help. He encountered Aaron Kornblum, an attorney who tracks and sues spammers under the CAN SPAM Act, a federal law that allows Internet service providers to bring civil suits against owners of Web sites that send unsolicited bulk e-mail. Some of the spammers Kornblum was chasing turned out to be sites marketing illegal generic Viagra produced in India and diverted to the United States.

"We could go after them for trademark infringement, for false advertising," Brotman says. "But Microsoft brought the spam action to it, and they were able to identify sites when they set up what are called 'trap accounts,' trap e-mail accounts."

Intellectual Property

One measure of any research-based company's success is how well it protects patents at home. Nicholas Groombridge, a partner at Weil, Gotshal & Manges, LLP in New York, is impressed with Pfizer's record defending patents on Accupril (quinapril), Diflucan (fluconazole), Lipitor, Norvasc (amlodipine), Zoloft (sertraline), and Zithromax (azithromycin). But he points to one serious adverse decision on two Neurontin (gabapentin) patents in August 2005. A New Jersey court ruled that the patents were indeed valid, but also decided that products by a dozen generic companies did not infringe on them, and so declined to enjoin the manufacturers from making the drug. "We expect to be able soon to appeal the summary judgment decisions and, pending the outcome of an appeal, hold a full trial on all the issues," Pfizer said in a statement. "If we prevail at trial, then Pfizer will pursue damages from these companies for their at-risk launches."

Says Groombridge: "It looks to me like they've had a pretty good run, particularly in a climate that was hostile to Big Pharma. I think you could give them a solid B+ [for defending their patents]. When it comes to legal expenses, I'd say they are paying between $100 million and $150 million a year to litigate. It's a lot of money, but the upside is far greater than that."

Innovation

Kindler says Pfizer will fight for any patent in any country, no matter how small the drug and how minor the market. However, his approach to protecting innovation goes beyond protecting intellectual property. He recently reached out to Charlene Barshefsky, now senior international partner at WilmerHale in Washington, DC, who served as US Trade Representative during the Clinton administration, to advise Pfizer on foreign policy matters. In particular, Ambassador Barshefsky looks at practices of economic and foreign governments—including their (lack of) transparency and due process, their systems of reimbursement and access, among others—that are often designed to promote the interests of domestic industry at the expense of innovators from abroad. This not only affects pharmaceuticals, but information technology and other industries as well.

"In some countries in Europe, when you apply for a pricing decision," Barshefsky says, "the government prices a brand new innovative drug at the level of generic drugs, so as not to disadvantage their own domestic manufacturers." Such pricing practices, Barshefsky notes, which are often shrouded from public view, frequently save government payers money in the short run, and discourage market penetration for new drugs. Not only do they keep less efficacious drugs on the shelves when better ones have been developed, the equal prices imply that the older drugs are just as good as the new ones.

"It's free-riding on innovation that someone else had to pay for," Barshefsky contends, being careful not to name specific countries. "There is an attempt by many countries to leapfrog into a leading position, but not on the basis of their own innovative research."


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