Pfizer's CEO Presents at Annual Shareholder Meeting Conference (Transcript)

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Pfizer Inc. (PFE)

Annual Shareholder Meeting Conference Call

April 25, 2013 8:30 am ET

Executives

Matthew Lepore - Corporate Secretary

Ian Read - Chairman and Chief Executive Officer

Gary L. Borkowski – Senior Director

Sally Susman - Executive Vice President, Policy, External Affairs and Communications

Michael Ehlers – Head of Research

Analysts

Jeff Stier – The National Center for Public Policy Research

Presentation

Operator

Ladies and gentlemen, please welcome Pfizer’s Corporate Secretary Mat Lepore.

Matthew Lepore

Good morning everyone and welcome. Before I introduce Pfizer’s Chairman and Chief Executive Officer, Ian Read, I would like to give you some information related to today’s meeting. First, let me introduce the Pfizer ambassadors who are here today.

These are Pfizer colleagues from the New York and New Jersey area who are here to help you during the meeting. I’ll ask them to please raise their hand so you know who they are. If you have any needs for questions during the meeting, please call on them. I also note that we have a number of our retired colleagues joining us today. I want to let you know that immediately following the meeting, the senior member of our Human Resources Benefits Team, Steve Finocchio is available to answer any questions you have with regard to retire benefits or other services. Steve, could you please stand briefly so that everyone can see you.

Steve is available to answer your questions immediately following the meeting in the Melbourne room which is on the conference level. We also have the inspectors of election with us today, Jeffrey Cohen and Donna Benn from Computershare, will you please stand so that our audience knows who you are in the back. Thanks.

In order to make sure that we have fair play for all shareholders, it is important that you abide by the rules of our meeting, which are printed on the order of business that was placed on your seat. If you need an order of business, please raise your hand and the ambassadors will distribute them.

Finally, during the meeting, we will provide projected financial and other forward-looking information, which is subject to substantial risks and uncertainties. I refer you to the risk factors section of our latest report on Form 10-K, which is available at the registration desk for our meeting today.

The Form 10-K identifies important factors that could cause the company’s actual results to differ materially from historical and projected results. In addition during this meeting, we will discuss some financial measures that were not prepared in accordance with U.S. generally accepted accounting principles. You can find the reconciliation of those measures to the most directly comparable U.S. generally accepted accounting principles, financial measures in our 2012 financial report, which is in appendix to our 2013 proxy statement and in our Form 10-K. Our 2012 financial report also is available at the registration desk and all of our SEC reports are available on our website www.pfizer.com. Thank you.

Now please join me in welcoming Pfizer’s Chairman of the Board and Chief Executive Officer, Ian Read.

Ian Read

Good morning everyone and welcome to this year’s Annual Meeting. We are here in New Jersey where approximately 3,200 Pfizer colleagues live and where 2,200 Pfizer employees work primarily in our sites in P-Pack, Madison, Bridgewater and Persephone.

I will start by introducing the members of our Board. You will find that their extensive background in our proxy statement. As their names are called, I will ask each of them to stand, face the audience and remain standing until all Board members are introduced. We are very fortunate to have such a distinguished group of directors. They are Dennis Ausiello, Anthony Burns, Don Cornwell, Frances Fergusson, William Gray, Helen Hobbs, Constance Horner, George Lorch, Suzanne Nora Johnson, Steve Sanger, and Marc Tessier-Lavigne, thank you all.

James Kilts could not be with us today due to unexpected family emergency. I would also like to acknowledge that Jake Mascotte who is retiring from the Board is not here today, Jake has served since 2009, joined us from the Wyeth Board on which he served since 1995. We thank him for his valuable contribution to most notably to our Corporate Governance committee, our Regulatory and Compliance Committee and our Science and Technology Committee.

Members of our Executive Leadership Team are here today. Please stand as a Group. Thank you and thank you for your service for Pfizer. I would also ask other Pfizer colleagues whether current or retired to stand and be recognized. Thank you for your continued support.

Okay, hopefully this is the only time; I have to use this in the meeting. So it’s now time to proceed with the business portion of the meeting. We are scheduled to wind by 10 o’ clock and we want to maintain as a formative productive and orderly business meeting marked by fairness to all shareholders. Therefore we will follow the order of business and we will get right to the first item of business, the Declaration of Quorum.

Notice this meeting was given to all shareholders of record as of February 27 and could you give me the numbers please. Shares representing at least 82.8% of the votes in total to be cast at this meeting are present here today even in person or by proxy. This percentage represents a Quorum. We now move to the next order of business items requiring your vote. We have five voting items in all, three that we addressed at every Annual Meeting and two proposals from shareholders.

Each item will be open for questions and discussion. To ensure fair play for all shareholders, it is important that you follow the rules of our meeting in asking a question or making a comment about an item until after they have been introduced. Please focus your questions or comments only on the voting item being discussed.

Please note there will be a general question-and-answer period later in the meeting. Before speaking, please wait for microphone so we can all here you. When recognized, please state your name and confirm that you are either a Pfizer shareholder or acting on the behalf of a specific shareholder before making your comments or making your question.

Also since we have a lot of business to transact today, we will reserve the right to move on to other questions or comments if a question is out of order or has been substantially answered previously. Please limit any comments to 2 minutes unless you are presenting a shareholder proposal, in which case you will have 3 minutes to submit your statement. We will remind all speakers from the floor with a prompt on the screen when your time is up.

In a moment I will officially open the polls. Please note that you can still vote on all the proposals that are included in the proxy statement. If you have not yet received, but would like to do so, if you have not yet voted, but would like to do so, or if you’ve already voted, but would like to change your vote, please fill out the ballots on the opposite site of the order of business. If you don’t have a ballot and would like one, please raise your hand now.

I declare the polls open as of 8:40 am Eastern Time on April 25, 2013. The polls will close today when the last ballots have been delivered to the inspector of elections. Ballots will be collected after all the proposals have been presented and discussed.

We now turn to the first voting item, the election of directors. This year, the Board has nominated 13 individuals to serve one-year terms all ending in our next Annual Meeting. I’ve already introduced them to you. Thank you. Are there any questions or comments concerning any of the nominees that we’ve previously introduced?

Okay. Thank you. We will now move to the next voting item. Item 2 is to ratify the selection of KPMG LLP as the company’s independent registered public accounting firm for 2013. Three representatives of KPMG are here today with us: Larry Bradley, [Judge VII], Eric Holmes and Dennis Waylin. Could you please stand please?

Okay. Thank you. The Audit Committee has done a thorough job of reviewing the performance of KPMG in 2012 and recommend selecting the firm as Pfizer’s independent registered accounting firm for 2013. The Board has ratified the selection and recommends that you vote for this proposal. Is there any discussion on this voting item?

Unidentified Company Representative

Good morning. My name is [Rene Kuyasti]. I’m the Economics professor of the Essex County and Muni County College. I try to know is, how long to be the accounting firm will be providing service with Pfizer, and also what are the expense in charge by the accounting firms or the expense is going to be increasing. Thank you.

Unidentified Company Representative

Thank you. The KPMG has been order this through Peat, Marwick, Mitchell & Co. since 1987 about 26 years in total; first of all, starting off under the name of (inaudible) and then Peat, Marwick, Mitchell & Co. We have the number for total quality.

Unidentified Company Representative

Yes we do like to spend.

Unidentified Company Representative

For 2012 total fees paid to KPMG was about $50 million, about $44 million order fees, about a $1 million order related fees and about $5 million with tax fees. None of those tax fees had anything to do with advisory or consulting services that number was up from the previous year because of work done to the nutritional sale and for the work associated with our animal health business, which is now Zoetis.

Unidentified Company Representative

I believe those numbers are in the property site. Any other questions? Thank you we will move on to the next voting item. The proposal was submitted by Mr. Kenneth Spina. Item number 3 is a board proposal asking our shareholders to cast an advisory vote to approve our compensation of our company’s named executive officers, identified in the summary compensation table in the executive compensation section of the proxy statement. While this advisory vote is non-binding, the Compensation Committee and the entire Board of Directors will review the results of the vote. And consistent with Pfizer’s record of responsiveness, we will consider the feedback of shareholders and take that feedback into account in future determination to relating to our executive compensation program

Accordingly the board recommends though in a favor of the resolution appearing on page 35 with the proxy statement to prove on advisory basis, the compensation of the company’s named executive officer was stated in the proxy statement. Are there any discussions on this voting item?

Okay, thank you. We will move on to the next item. This proposal was submitted by Mr. Kenneth Steiner of Great Neck, New York. It requests that our executive pay committee adopted policy requiring that senior executives retain a significant percentage of shares acquired through equity pay programs until reaching normal retirement age.

Mr. Gary Browse is here representing [Mr. Skinner]. Mr. Browse, if you please move the proposal forward for discussion.

Gary L. Borkowski

Good morning. Thank you very much. It’s pleasure to be here. In the three years I’ve been doing this work, this is the first time I’ve been to a Pfizer Annual Shareholder Meeting. I thank you for your welcome and the hospitality that your corporate secretary has showed me.

I will read the result for this resolution which request that shareholders that our Executive Pay Committee adopt a policy requiring that senior executives retain a significant percentage of shares acquired through equity pay programs until reaching normal retirement age. For the purpose of this policy, normal retirement age shall be defined by the company.

Company’s qualified retirement plan did have the largest number of planned participants; the shareholders recommend that the committee adopt a share retention percentage requirement of 25% of such shares. The unified policy should prohibit hedging transactions for shares subject to this policy which are not sales, but reduce the risk of loss to the executive.

This provision on hedging transaction prevents a loophole which could make the entire proposal largely moved. This policy shall supplement any other shares ownerships requirements that have established for senior executives and should be implemented so as not to violate our company’s exciting contractual obligations for the turns of any compensation or benefit plan currently in effect. We ask you to support that resolution.

Unidentified Company Representative

Thank you, Mr. Browse. The Board of Directors opposes this proposal for the reasons set forth in the proxy statement, primarily that our compensation committee has carefully designed our executive compensation programs and policies including robust stock ownership requirements to align the interest of our senior executives with those with shareholders to encourage a focus on the long term performance of the company. Are there any questions or comments on this proposal?

Thank you. We will move on to the next voting item. This proposal was submitted by the – it’s the shareholder proposal regarding action by written consent. This proposal was submitted by Mr. Ray T. Chevedden of Los Angeles, California. He requests the Board of Directors to take steps to the shareholders to take action by written consent in place of a meeting. Mr. Gary Browse is here representing Mr. Chevedden. Mr. Browse, would you please move the proposal forward for discussion?

Gary L. Borkowski

Thank you, again, good morning. The result of this resolution now shareholders request that our Board of Directors undertake such steps as maybe necessary to prevent written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action of a meeting at which all shareholders entitled to vote thereon were present and voting. This written consent includes all issues that shareholders may propose. This written consent is to be consistent with applicable law and consistent with giving shareholders the fullest power to act by written consent consistent with the applicable laws.

This proposal topic received our 49% support in 2012 and would have probably received a majority of vote depending on only one or two factors had the Directors been neutral on this topic or had our directors been willing to make it is easy to vote for this proposals topic as to vote against it. It would take only one click to vote against this proposal, but 20 clicks to vote in favor with our bias to 2012 Internet Voting System. I ask you to support this resolution.

Ian Read

Thank you, Mr. Browse. The Board of Directors opposes this proposal for the reasons set forth in the proxy statement primarily that. The Board strongly believes that important matters should be the subject to shareholder meetings which provides the opportunity for discussion and interaction amongst the company’s shareholders so that all points of view maybe considered prior to a vote.

The proposal will have critical actions to be approved without the benefit of a meeting and potentially without proper notification to all the shareholders of the company. Are there any questions on this proposal? Thank you. That’s the end of the business section and I think we now move to close the poll, is that correct.

We now will have a general question session at the end. I will hand in the ballots please. So we now move to the final voting and close the poll. If you would like to vote or change of vote please mark your ballot sign it and print your name beneath your signature. Once you voted, please raise your hands that our ambassadors can collect your ballot.

Thank you. I would now declare the calls officially close at 8:51 AM Eastern Daylight Time on April 26. I will now turn to on management report. I’m going to review how the business performed in 2012 and an outstanding year, in which we may have lot of progress against our strategic imperatives and then briefly discuss our focus on 2013.

The four strategic imperatives listed in this slide, provided to focus resulted in 2012 being a milestone year. Where we advanced R&D portfolio we made the right capital allocation decisions that delivered value back to our shareholders, made progress on our ongoing efforts to side is respect and work to create an ownership culture with Invisa. And importantly, we accomplished all of this with high standards of quality, compliance and business ethics. I’ll review some of these achievements against each imperative beginning with the progress we are making and creating a sustainable innovative call.

In 2012, we’ve brought five new therapies to patients in various markets, people were advanced kidney cancer [of] available treatments have not worked now have in lighter. The serious blood cancer and leukemia and we’ve also brought to market Bosulif for the treatment of chronic myelogenous leukemia with rheumatoid arthritis within life can be filled with delivering pains also have a new option in our homegrown Cellgens which was developed in our own growth in labs.

The patients with atrial fibrillation who have higher risks of stroke and systemic embolism there is ELAQUIS developed with our partners Bristol-Myers Squibb and showing our commitment to the area of where diseases we introduced early life so in the United States to treat Gaucher which is a rare genetic disorder.

Behind these approvals we advanced programs in our early and mid-stage pipeline. This slide is a snapshot of our pipeline as of February 28 of this year. It shows that we have a robust portfolio across all stages of development. A field than more noteworthy areas of development include a compound call (inaudible) it is the potential use in certain population who advance breast cancer were survival rates remain low. Recently received the FDA’s breakthrough therapy designation and based on the results we have seen so far we recently began a Phase III trial in the advanced breast cancer.

In neuroscience and pain we’re building on our deep knowledge to explore novel approaches for pain in neurodegenerative diseases. Cardiovascular conditions such as high cholesterol continue to affect the health of many people. We’re developing the compound called RN-316 to help lower the cholesterol; especially those who cannot reach their LDL cholesterol targets will tolerate it.

We’re using our expertise in vaccines to expanding the program to target some of the most deadly infections in adolescents and adults. Adolescents and young adults were working on the vaccine from an injury. And to reduce the risk for some of the most difficult hospital quad infections we’re working on vaccine to stuff hours and see this issue.

We have an ongoing clinical development program for XELJANZ, which was recently approved in the U.S., Japan and Russia for rheumatoid arthritis. We are waiting the recommendation on RA from a European Medicines Agency Committee. Through this program, we are hoping to help people with additional inflammation diseases beyond rheumatoid arthritis such as psoriasis and inflammatory bowel disease. And finally we have about 10 different rare disease program, spanning discovery for clinical development. Among the disease areas, we’re looking to address muscular dystrophy, sickle cell anemia and Cystic Fibrosis.

I’ll turn next to the actions we took to deliver value back to our shareholders during 2012. A few of the highlights include. We achieved solid operational growth in many of our key patent protected inline products including Lyrica, Enbrel, Prevnar 13, Celebrex and Sutent.

We achieved strong operational growth of 12% in emerging markets, driven primarily by strong volume growth in China of 8% in our consumer health business, driven by our acquisition of Ferrosan and Excaliard; sorry it was 8% in the consumer business. Our China business grew in excess of 30%, I believe.

Through ongoing focus to improve our efficiencies and reduce expenses operationally, we save nearly $4 billion in 2012 compared to 2011. During 2011 and 2012, our total return to shareholders this includes both the increase in our stock price and our dividend payments was over 55%, compared to approximately 31% return from the DRG index of the general drug index.

Results for you; our shareholders has been almost $13 billion of dividends being distributed. I would note that if you include the most recent dividend from this year, Pfizer’s dividend has grown by 33% since 2010. I believe we have demonstrated by returning value to our shareholders is our top priority. Dividend payments will continue to be important vehicle and given the financial strength and confidence we have in the business, share repurchases will also remain a strategic option.

We received $11.85 billion from the sale of our nutritional business to Nestle. And earlier this year, we generated approximately $6 billion in proceeds from the IPO and related debt offering of our Animal Health business, [nano] and Zoetis. We are deploying these proceeds in the best interest of shareholders.

Throughout this year, we also supplemented our research efforts and products with bolt-on business development deals. These are acquisitions of collaborative arrangements that will allow us to expand our capabilities. Noteworthy examples are, in November 2012, we acquired NextWave Pharmaceuticals a specialty pharmaceutical company focused on products for the treatment of attention deficit hyperactivity disorder. Through this acquisition, we launched earlier this year Quillivant XR, the first once-daily extended released liquid medicine for ADHD.

In China, we have a Chinese company called Hisun Pharmaceuticals, we launched a joint venture called Hisun-Pfizer Pharmaceuticals Company Limited, to develop, manufacture and commercialize off-patented pharmaceutical products in China and in the global markets. We establish a long-term strategic Mylan to develop and bring to market generic medicines in Japan. And we have an agreement with Astrazeneca for the global over-the-counter rights for Nexium, their well-known heartburn treatment and the acquisition of Alacer, the maker of Emergen-C, which is a nice compliment to our vitamin and supplement portfolio.

Our third imperative is about earning respect from society, consumers, shareholders, healthcare providers, patients, governments and the public in large. We know earnings and keeping their respect requires integrity in how we operate. Integrity and the information we provide in our clinical data packages and how we conduct our operations.

Our highest priority is to ensure useful, transparent and credible health information in medical data. We also remain committed to providing access to our medicines through patient assistance programs. In 2012, our U.S. assistance program, Pfizer Helpful Answers which serves the uninsured and the underinsured helped one million patients receive more than seven million prescriptions. Nobody in the United States who was underinsured or without insurance need go about Pfizer’s products. With Helpful Answers, we will provide these free or almost free of charge.

In 2012, we decided to embark on a new approach to reach members of the public and did that by starting a conversation about ageing, one of the most pressing issues affecting healthcare and quality of life. Through this initiative, which we call, Get Old, we are providing information on how people can live longer, healthier and happier lives.

We also continue to leverage the work we began in 2012 by our Chief Medical Officer, Dr. Freda Lewis-Hall to share health information of consumers throughout participation in broadcast media programs, and I’m sure Freda would stand; you will all recognize Freda from her presence on many of the important health programs on television. Thank you.

Our full comparative is by spreading a culture where colleagues only decisions work collaboratively trust one another, trust enough to speak up and engage in constructed debate and operate with integrity at all times, we call this Onit. In 2012, we made the first try in establishing the Onit culture. This effort, which were continuing this year and beyond will I believe attract and retain the most talented individuals and will provide our company with a sustainable true competitive advantage.

I believe Pfizer is on the right path. We must maintain our momentum by continuing to execute the plans and strategies we’ve laid out. More specifically throughout this year, we will be focused on delivering on the potential within our pipeline. Continuing to demonstrate fiscal discipline on how we use our capital. Continuing our efforts to increase a level of trust with the public and getting sustained traction in transforming our culture.

In summary, in 2012, we made tremendous progress against imperatives that are helping us to fulfill our purpose, which is to bringing innovative therapies to patients that significantly improve their lives and to do it in ways to create value for you, our shareholders. Thank you for your trust and confidence should place us. We will now tell you the preliminary results of the voting. Thank you.

Unidentified Company Representative

Thank you, Ian. The Inspectors’ Report as preliminary and is subject to the inspectors’ final tabulation, which should not significantly change the preliminary results. Final results will appear on our Form 8-K filed with the SEC within four business days of this meeting. The inspectors’ preliminary report shows that shares representing 82.8% of the votes entitled to be cast that this meeting were represented in person or by proxy constituting a quorum.

Inspectors’ preliminary report further shows that each nominee for election as director received favorable vote of at least 95.3% of the votes cash at this meeting. The proposal to ratify the selection of KPMG, LLP to serve as the independent registered public accounting firm for the company for 2003 received a following votes, 98.7% of the votes cast voted for the proposal, 1.3% of the votes cast voted against the proposal.

The advisory vote on executive compensation received the following votes 95.6% of the votes cast voted for the proposal, 4.4% of the votes cast voted against the proposal. The shareholder proposal regarding executive equity retention received the following votes; 28.6% of the votes cast voted for the proposal, 71.4% of the votes cast voted against the proposal.

The shareholder proposal regarding action by written consent received the following votes, 47.6% of the votes cast voted for the proposal, 52.4% of the votes cast voted against the proposal. The result of this preliminary report indicate that the shareholders of the company have elected the nominees for the Board of Directors as named in the proxy statement and have approved the proposal regarding ratification of the selection of our independent registered public accounting firm. In addition the shareholders have approved the compensation of our named executive officers; the shareholder proposals have not been approved. This concludes the Inspectors report.

Ian Read

Thank you, Matt. Having completed the voting items and report on the voting, we now have about 15 minutes to decide for general questions and comments.

Ladies and gentlemen, if you want to ask a question, please raise your hand and wait for microphone and state your name. We will also be taking questions from shareholders in the overflow room. For those attending in the overflow room, if you have a question, please raise your hand and an investor will provide you a comment card. Once completed, they will bring it to the ballroom for you.

Please focus your questions on an issue of general importance to shareholders. If you have a question that may be of interest only to you or only to a small group of shareholders, please see us after the meeting and we will try to answer your questions. Also in the interest of fair play to all shareholders, if a question has already been substantially answered, we will move on to another shareholder question. Start with the first question?

Question-and-Answer Session

(inaudible) I’m interested since we are all growing older; I’m interested in some more specifics about your Get Old program.

Ian Read

Thank you for the question. Sally, would you like to – Sally Susman is in charge, so would you like to give some give some general overview of this? Thank you.

Sally Susman

Thank you very much. Some initial research that we conducted showed that over the last 100 years we have gained 30 years of longevity as a society. And we found that fascinating and an opportunity to connect with different segments of society, young mothers who are carrying for children and elderly, middle age folks who are experiencing more physical issues, the elderly lady dealing with multiple medical conditions and so we’ve created a website www.getold.com where we’re having conversations about the challenges of aging, working to deepen our relationship with various consumer segments and looking to be a part of helping people to age in a healthier and more productive way. I’d be delighted to talk more with you about it after the meeting. Thank you.

Unidentified Company Representative

Thank you, [Sally]. Next question gentlemen there with the hand lifted at the middle, back.

Unidentified Analyst

Good morning, my name is (inaudible) Economics, since U.S. order pipeline and decision what Pfizer recommend, are you people looking into beyond pipeline that never been developed. How should you know that the bacteria and virus, how suspended we generate become stronger resistant to the drugs. Have you been focused in with execution relation creating the viruses that actually using that DNA – finger. What would viruses look like afterwards help you to create a new type of medicine would be prepared in this case?

Unidentified Company Representative

Thank you for your question. Michael, who is Head of our Research, would you perhaps answer that first.

Unidentified Company Representative

Thank you for the question. When it comes to infectious diseases, our main focus are on vaccines. For those vaccines that we are developing and we’ve mentioned many activities and we have also other activities that include viruses, we carefully monitor what strains of this bacteria and viruses are around in various parts of the world. And we do try to anticipate how they may change in years to come and we have tailored our vaccines to provide within our capabilities the broadest protection of current and potentially future emerging threats.

Unidentified Company Representative

Thank you, Michael, I would add that on the Marcus leadership, we’ve signed some 20 agreements with the top research institutions and universities around the United States an attempt to reach outside of our rules and engage in early science with key scientists, which I believe will provide us access to innovative therapies.

Unidentified Company Representative

Good morning, my name is Mike Kerwin; I’m the President of Somerset County Business Partnership. As an organization, that represents the business community in New Jersey. We thank you for Pfizer’s commitment in New Jersey. Can you please share some of the key factors that will encourage Pfizer and other companies to continue in our best in the future here? Thanks.

Ian Read

Thank you for the question. We’re clearly a educated work force which we now in New Jersey. It is very important to have suitable environment. I would say probably the most macro point that will encourage investment in the United States and in New Jersey is one of tax reform, which I know is in front of Congress right now. Thank you for that.

So tax reform on a corporate level requires that U.S. companies are not disadvantaged against our competitors. So as you know, Pfizer’s tax rate stands at about 29%. Most of our competitors who are farm based competitors have tax rates in the low 20s and some in the mid-teens. This means that they are able to outspend us to some of the difference in tax on research or investment in marketing. So I think an essential step to ensure vibrant pharmaceutical industry and investment in states like New Jersey is a reform of the tax code for companies in the United States to move to a territorial system. Thank you for the question.

Jeff Stier – The National Center for Public Policy Research

Good morning. I’m Jeff Stier. I’m Director of the risk analysis division of the National Center for Public Policy Research, a company shareholder. Thank you for taking my question. I’m asking about one in particular the many ways government is increasingly involved in the delivery of healthcare, specifically program called academic detailing.

An academic detailing as we know, the federal government through a new agency for healthcare research and quality arriving from President Obama’s 2009 stimulus has been disbursing millions of dollars in tax payer funds to public relations agencies who send representatives called academic detailers to doctors offices to advise doctor’s as to what drugs they should prescribe and for what purposes.

This is somewhat like when firms like ours and drug detailers to speak with doctors about our products with the very major difference. Our company is strictly regulated by the FDA in terms of what we can and cannot say. The federal government is not only regulated, but if refuses to be transparent about the advice its academic detailers are giving. If the government has a huge complex of interest in that – healthcare cost to be kept as low as possible.

Look, we all want to keep healthcare cost as low as possible, but many classes of drugs among (inaudible), the selection of the appropriate drug among many possibilities requires balancing of the effectiveness and acceptable side effects in each unique patient. Our government funded detailers taking such phenomena into account. So they explain these new launches to doctors?

Look, we just don’t know. What we do know is that the initial academic detainment grants are intended to disseminate the findings of comparative effectiveness research, which evaluates treatment outcomes derived from large population as supposed to patient’s specific data. This approach can be harmful to patients who don’t respond to medicine in the same way as majority of patients.

So my question to you is what is Pfizer’s position on this matter, and if you agree with us, that’s the governments lack of transparency, it potentially dangerous to American patient, to what extend do you expect the pharmaceutical industry Pfizer in particular to urge Congress to fund this academic detailing program, we are at the very least to require it’s demand transparency, so the American people will know exactly what the government is doing here, thank you.

Unidentified Company Representative

Thanks for your question, thank you. I would like to say you expressed very adequately our view, so 100% coincide with yours. We think it’s a waste of public money and certainly we disagree with the fact that the government funded academic details are not banned by the same rules of detailing in the same rules of truthiness that we are.

We have as this both part of the Pharmaceutical and Manufacturers Association of Pfizer individual efforts. We continue to educate Congress on this issue and work with our lives to try and get a reform on this issue, but as you know, it’s really large flow and lot of things were integrated in that lower and there are lot of things need to be reform the net lower and this is just one of them, so thank you for your question.

Unidentified Analyst

(Inaudible) representing the American Academy of Pediatric New Jersey chapter; the Pediatric Council on Research and Education and the statewide New Jersey Immunization Network, thank you for having me here this morning as partner guest. We work with Pfizer closely on those macro issues as well as micro issues, quality in the community and policy in bills et cetera. My question is what does the future look like in terms of your planning for women and for children in terms of keeping everyone healthy.

Unidentified Company Representative

Thank you very much for the question, and for your partnership and support. The Pfizer has a very extensive vaccine program, which we initiated post the integration of Wyeth, so normally we have Prevnar 13 for instance we now have Prevenar 13 for adults where we have FDA approval for that product where we are looking to get broadening of it’s usage from ACIP, and we expect to get that post catheter results, which is a large trail has been running Europe on adult pneumonia.

In our pipeline we have products such as probably for nicotine addiction, which we believe would be extremely useful both to adolescents and to adults. We have vaccine against (inaudible) which is acquired in hospitals, a vaccine against looking for vaccine against inflammation. So we have a very active vaccine research. We would expect to see many of these products advancing into Phase III clinical trials in the second half of this decade and we have initiated a Phase III with meningitis B, which is very important vaccine for adolescents. So thank you for the question and for your partnership. We have any more questions?

Gentlemen and we just to say there is fairness and rotations, we come down to front first. Thank you.

Unidentified Company Representative

Good morning again. I will be brief. I just wanted to point out for 30 years, I’ve worked on the issues of corporate inclusive just spoke on the Board and then in the workforce, and I see that Pfizer has done very well in this area. One area, one goal that I have not been able to see yet, is the placement of an indigenous American Indian on the Board of Directors.

There’s no corporation that has and we have plenty of leaders from the academic and business field who are qualified, who have the experience, but don’t have the opportunities. And a number of our organizations, indigenous organizations, the large ones, have gotten together and created a pool of what we think are good candidates for corporate boards.

I just wanted to make the company aware of that and the shareholders here aware of that that this is one area that we’d like to see some breakthroughs from all of Corporate America. So I just mentioned that to bring you to the attention. Thank you.

Unidentified Company Representative

Well thank you very much. Pfizer is very focused on the issues; we work both at the relation team level on our Board on diversity. It’s important to us, we have a diverse customer base, we sell to, we believe it’s an issue of fairness, as well as good business. And more than happy to receive your list of candidates that you believe are qualified. Thank you for raising that.

Unidentified Company Representative

I’ll comment about one of your medicine Lipitor; I’ve been using Lipitor since 2005 because that was certified. It’s a wonderful drug, I think people say great job, I will recommend to everyone, you’re doing the great job (inaudible) the brand name and generic names in placed.

Unidentified Company Representative

Well, the commercial practices of the company are to ensure that individuals have selection on whether they want to stay with the brand or they want to go with generic and the brand has implicit in it all of the research and all of the work that Pfizer is done and in generic is a result of the lots of patent production, and the consumer has the choice.

Many consumers feel, they want to stay with the branded product with all representatives and all researches done and other consumers want to select generic and when they select a generic, they normally don’t have any ability to decide, which generic they take. And then they are exposed to whatever risks there are taking generic products, but it’s not manufacturing by Pfizer. Any other questions, yeah.

Sorry, if I’ve missed. So back there – on the back, so that gentleman is standing for a long time.

Unidentified Analyst

Good morning. [Ed Desson], I’m a shareholder. You mentioned rare diseases; I suspect those are the same as what they call orphan drugs and these are part of your attempt to help society in general above and beyond economic gains. My question is, are you involved in the so-called central nervous system diseases like (inaudible) research horizon?

Ian Read

We have an active research program in central nervous diseases that Michael will expand on the areas we’re working on. Michael is our Head of Research.

Michael Ehlers

It’s a good question. If we have a significant effort in neuroscience and I wonder more specialized condition we have projects ongoing in Huntington disease. We’re looking at both common dementia diseases, but also some rarer form of dementia, which maybe individuals, in particular genetic previous position.

We also have activities in much more orphan diseases. One of those is called (inaudible) that’s approved in Europe for which you also get neurological symptoms and that can alleviate. So it’s an important area for us from the more common to the more severe and unusual and that includes diseases with genetic defined (inaudible). Thank you for your interest. Any other question?

Unidentified Analyst

My name is Steve (inaudible) and I’ve been as a stockholder for many years. I’m going to emergency physician for 30 years; one of the biggest programs that I face and I currently work in a hospital in fairly affluent area. Is that many patients come in and prescriptions are given and of course it’s not just visor, but many of the drug companies have pharmaceuticals that are not affordable. I heard in the beginning of your speech that there are free or nearly free drugs that are available for people.

In an emergency setting, patients come in often times they don’t have their own physician. We are seeing them on a one-time basis. We’re giving a one-time prescription. What do you recommend, your Board recommend for those patients who truly need medications, or truly have no access to funds in terms of products that you provide that we maybe prescribing from an emergency area. And this is a nationwide issue by the way.

Ian Read

You rise a very good point. I don’t have an immediate solution for you. It’s part of the complexity of our healthcare system. If you a chronic illness as you say and you require access to medicine and you can’t afford it. We can and we do get our medicines to individuals, but individuals are going to the hospital. If we don’t have insurance presumably they are being cared for by the hospital and the hospital should have the medication that’s appropriate and should find ways of getting reimbursement from the government if these individuals are uninsured during Medicaid.

I think we should look at it and see if we can find a solution, I will take under the advice and see if at some way that we can provide the type of products, you don’t have access to in an – for an emergency situation in your hospitals. Thank you for raising it.

Operator

Ladies and gentlemen we have time for one more question.

Unidentified Analyst

Retiree and shareholders according to what has been I’ve seen at least written in the financial process, Pfizer has retained its significant ownership interest in Zoetis and has a lot of speculation about what the intent is in terms of the distribution of the shares is that the intent. Can you shed any lights on what the plans are and what the thinking will be about, what the company will do with those shares to respect to the shareholders?

Unidentified Company Representative

We haven’t made any final decision yet, and this is a very sensitive moment in time because of the different tax laws that applied to how you disclose the companies, we’ve made no final decision, we may do a spin, we may do a split, we may do other types of actions, we may retain the 80%. All I can say at this moment in time is that I believe we’ll take the decisions that are in the best interest of Pfizer shareholders, when we take that decision. Thank you for the question.

Unidentified Company Representative

Are there anymore questions? I want to close it up with this question that people want to ask or haven’t asked. Okay, one more.

Unidentified Analyst

(Inaudible) shareholder record, and I wanted to ask you about how sensitive overall the top-line of the company gets to a low growth or no growth environment in the industrialized countries and specifically if there is any actions you’re taking. So look for growth, whether in different segments such as nutritional or refocusing the company to tackle that growth area what is available?

Unidentified Company Representative

Thank you for the question, well clearly the absence of growth in the developed markets is an issue for pharmaceutical companies that’s number one driver of value for us is top line growth. We are in a period as a company where we’re going for a period of substantial loss of exclusivities (inaudible) last year like $7.6 billion in 2013, 2014 and 2015.

We’ll continue to have loss of exclusivities, which reduce our ability to produce top line growth. So somewhat some of the strategy we bring today is to take our key products like Varicose, Celebrex or [Prevnar] make sure that we position in the best way possible. We communicate with the most effective communication and we get that the most descriptions we can from those products.

The middle to longer term solution clearly is the launch of meaningful innovative products like Eliquis, Xeljanz the five oncology products that we’ve launched. And I’m very hopeful that we can bring adult vaccine, the Prevnar 13 and palbociclib, which is a product for breast cancer. I think we can bring those to market earlier. It will help drive our growth in those markets. The other strategy causes to – is to expand and invest in emerging markets that has grown wealth in a middle-class that’s more capable of buying our products. And as you can see, we are generating growth there some 12% last year. But you get one of the major strategic challenges that pharmaceutical companies have in this moment given the cost containment in Europe and the United States. Thank you.

So with that we’re back to adjourn, both Pfizer colleagues and those – our valued business partners, including the wonderful people of the Hilton Short Hills Hotel to please stand and accept our thanks.

Unidentified Company Representative

It’s been a pleasure to come to Short Hills and this has been a valuable meeting. We appreciate the opportunity of listen and learn from shareholders certainly the issue raised that availability of our medicines and emergency situations is an important one that we’ll look at.

And speaking for all of us on the executive leadership team and the Board, I’m grateful for your continued confidence in Pfizer and for you keen interest in the progress of our company.

With that may I ask for motion to adjourn? Thank you very much. Safe travels.



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