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Pfizer shareholders reject Pawlenty's prescription plea
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Gov. Tim Pawlenty met with seniors from Minnesota and Missouri after the shareholders meeting. (MPR Photo/Tom Scheck)
Minnesota Gov. Tim Pawlenty was unsuccessful in his efforts on Thursday to persuade the shareholders of the world's largest drug company to charge Americans less for prescriptions. Pawlenty attended Pfizer's shareholder meeting in Missouri and spoke in favor of controlling drug costs in the United States. Pawlenty says he'll continue to pursue strategies for lowering the cost of prescription drugs.

Clayton, Mo. — Shareholders reacted coolly to a proposed resolution that would've limited Pfizer's drug price increases to the rate of inflation. Ninety-five percent of the shareholders who voted at the meeting opposed the proposal. Nevertheless, Pawlenty says he'll continue to push Pfizer to change its business practices.

If the company won't lower its prices in the U.S., he wants Americans to be able to import their prescriptions from elsewhere. Pawlenty has championed a state Web site that helps Minnesotans fill prescriptions at two Canadian pharmacies, where government price controls keep costs down. In response, Pfizer has limited sales to wholesalers involved in cross-border sales. Pawlenty says the company's resistance to go along with reimportation could hurt *Pfizer in the long run.

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Image Pfizer CEO Hank McKinnell

"There is a prairie fire across America that has been set on these issues," Pawlenty said. "There aren't enough fingers in the room or on the board of directors' hands to plug all of the holes in the dike. The frustration is springing out in reimportation issues and in other demands, political and governmental and otherwise so we do need to find a solution. And I think we agree on this point, the current pricing issue is unsustainable."

Pawlenty says the two Canadian pharmacies endorsed by the state have warned him that they could run out of Pfizer medicine soon. Pawlenty says they may consider importing drugs from other countries if it's safe and cost effective.

Pfizer CEO Hank McKinnell says his company will never agree to Pawlenty's call for reimportation. He says any potential savings from reimportation would be wiped out by increased security measures to make sure the supply line doesn't become contaminated.

"The biggest problem I have, however, is my promise to any patient who takes a Pfizer medicine, that that Pfizer medicine is a medicine that that person and their doctor expect them to take. it's not fake, it's not been adultarated or an expired medicine that's been put in the system. I need to have the assurance that those products have come from our manufacturing sites," he said.

Pawlenty says he intends to pursue the issue of reimportation at future shareholder meetings. The Minnesota Board of Investment, which oversees state employee pension funds, passed a resolution that calls on Pfizer to change its business practices. It's scheduled to be heard next year.

Pawlenty says he's recruiting other public pension fund managers to jump on board. Vermont's Board of Investment took similar action this week.

Pawlenty's efforts worries some shareholders, who say Pfizer's research and development could suffer. Pfizer has 1,200 employees in the St. Louis area. Dick Fleming, the president of the St. Louis Regional Chamber of Commerce, says any efforts to restrict Pfizer could harm the local economy.

"You have recognized here in our community, opportunities to do the kind of long-term research that you spoke to in your report and the kind of long-term view that that takes in return not only from a financial standpoint but also on its impact on health issues," he said.

In fact, the Missouri Biotech Association sent out a press release encouraging any Minnesota biotech businesses to move to Missouri. The news release said that by challenging Pfizer, Pawlenty shows he doesn't support biotech.

Pawlenty says he supports biotech, just not price gouging by drug companies.

Other shareholders questioned Pfizer's motives. Mary Beth Sweetland, a shareholder from St. Louis, says Pfizer is one of the most profitable companies in the world and should share the wealth.

"I look at these resolutions and think compassion. That's what they're based on. You have to give it away to get it back. Pfizer has so much and the wealth of the company shows that," she said.

Pawlenty and Pfizer shareholders do agree that it's time for the rest of the world to start paying more for drugs. Both say they intend to lobby the Bush administration to negotiate higher drug pricing in future trade agreements. But the two disagree on where the savings should go. Pawlenty says spreading the company's overhead among more consumers should result in lower drug prices in the United States.

Pfizer's McKinnell says the additional revenue should go to research and development. Both say they'll continue to work to make sure their views are considered in Washington.

Steve Schondelmeyer, a director of the University of Minnesota's College of Pharmacy, applauds Pawlenty's efforts but says more needs to be done on the federal level.

"The state has certainly stepped forward and is trying to speak for people in Minnesota who are concerned about drug prices, but for the most part it's an area covered and driven by federal policies and its those policies that they're bucking up against," he says.

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