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Pfizer cost-saving measures go ahead

Pfizer, the world's largest pharmaceutical company, is to cut 10,000 jobs, as it tries to cut costs by over USD 2 billion annually

Pfizer, the world's largest pharmaceutical company, is to cut 10,000 jobs, as it tries to cut costs by over USD 2 billion (GBP 1 billion/ EUR 1.5 billion) annually.

The cuts come as the company's cholesterol-lowering product Lipitor (atorvastatin) goes off patent in 2010 and the fact that its replacement candidate, torcetrapib, failed clinical trials in 2006.

Three research sites in Michigan and two plants in New York and Nebraska are closing, Pfizer has revealed. The company may also sell another manufacturing site in Germany and close research sites in Japan and France.

Pfizer has announced major cost reductions to combat the loss of approximately USD 14 billion (GBP 7.1 million/ EUR 10.8 million) in revenue in 2007, due to expiring patents on key drugs. Despite the news, Pfizer announced 2006 profits up by more than 50 per cent from 2005 at GBP 9.8 billion.

Workforce reductions normally boost stock prices, yet Pfizer's fell 27 cents, or one per cent, to close at USD 26.95 on the New York Stock Exchange on 22 January 2007.

The latest cuts, which amount to 10 per cent of Pfizer's total global workforce, follow a previously announced plan to cut costs by USD 4 billion (GBP 2 billion/ EUR 3.1 billion) a year by 2008. Pfizer also reiterated that its revenue would be flat in 2007 and 2008.

In other news, AIDS Healthcare Foundation, the US' largest AIDS healthcare, prevention and education provider, is suing Pfizer over its advertising and marketing of the erectile-dysfunction drug, Viagra (sildenafil).

The action, which was filed on behalf of the non-profit AIDS group in Los Angeles, accuses Pfizer of using misleading advertising to encourage the use of Viagra as a "party drug", thus potentially spreading sexually transmitted diseases.

AIDS Healthcare Foundation General Counsel, Tom Myers, said of the lawsuit: "By marketing Viagra to men with 'mild' erectile dysfunction or as a way to 'improve your sex life', as many of the ads state, Pfizer is selling the drug as a way to enhance sexual experience, not as a treatment for an illness. We are urging Pfizer to not only end this dangerous marketing tactic, but also to fund a national educational campaign on the dangers of Viagra and crystal meth in order to mitigate the negative impact their advertising has had and continues to have."

Pfizer strongly denies that it promotes Viagra for recreational use, citing among other reasons, its three-year, USD 6 million (GBP 3.0 million/ EUR 4.6 million) AIDS prevention project started in 2003.

US sales of Viagra reached USD 860 million in 2005.

24th January 2007

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