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NEJM Gets At Heart Of Pfizer's/Pharma's Problems

Scientific and medical journals like to keep their distance from the business side of things. That's why I think it's worth noting that a "Perspective" piece--think of it as kind of a newspaper Op-Ed--in "The New England Journal of Medicine" starts by mentioning Pfizer's stock price and its recent proposed acquisition of Wyeth.

The article is written by Dr. Alan Garber, a professor of medicine and economics at Stanford. The piece is titled, "An Uncertain Future for Cardiovascular Drug Development?" and it begins, "The past year has been a challenging one for Pfizer, the world's biggest pharmaceutical company. Its stock price has fallen as it has struggled to boost research productivity, going so far as to cut research jobs along with sales positions and spending $68 billion to purchase Wyeth in a bid to strengthen its product portfolio."

Dr. Garber goes on to talk about PFE last year deciding to get out of the business of developing heart drugs after seeing its hoped-for successor to Lipitor fail a couple of years earlier. So he raises the question, "Did the decision reflect only the strengths and weaknesses of Pfizer's pipeline, or have the commercial prospects soured so much that we can expect an industrywide decline in innovation in cardiovascular drugs?"

Heart disease is still the leading cause of death in the U.S., so Dr. Garber doesn't think demand for heart drugs is gonna go down significantly. However, Credit Suisse pharma analyst Catherine Arnold did, coincidentally, put out a research note to clients today claiming the "Economic downturn appears to be weakening the (cholesterol drug) market." But Dr. Garber does think in this era of drug safety- and cost-consciousness that it could become tougher to bring new heart drugs to market unless they're a super-duper, miracle pill.

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Nonetheless, he writes, "Pfizer's decision was undoubtedly driven by an assessment of its drug development pipeline and may not portend an industrywide shift away from cardiovascular drugs." He cites a stat from PhRMA, the industry's big lobbying group, that more than 300 drugs for heart disease and stroke are currently in various stages of testing. Heart disease, diabetes, cancer and Alzheimer's remain some of the biggest areas of so-called unmet medical need. Translation: fields where drug companies can make a lot of money if they develop good, safe drugs to address them.

And Dr. Garber concludes, "In these uncertain times, Pfizer's decision is a reminder that pharmaceutical innovation is vulnerable to market forces, changes in medical practice, and regulatory requirements." After all, it is a business.

(Dr. Garber is on the Board of Directors at Exelixis, on an advisory board at Express Scripts, and ESRX and Covidien have paid him money to give lectures.)

Questions? Comments? Pharma@cnbc.com and follow me on Twitter at mhuckman