PFIZER REVERSAL ON CURBING COLD PILLS MAY HELP COMPANY

Just a year ago, Pfizer Inc. was leading the charge against state lawmakers
who want to restrict sales of over-the-counter cold medications that
contain pseudoephedrine (PSE), which can be used to manufacture the illegal
stimulant methamphetamine. Pfizer's Sudafed contains PSE and is one of the
products that some states want kept behind pharmacists' counters and
subject to sales limitations.

Now the drug maker has changed sides, a move that has helped boost the
chances of bills pending in more than two dozen states and a proposed law
in Congress, which is expected to hold hearings on the issue this month.

What caused Pfizer's change of heart? In January, the company rolled out a
reformulated product, Sudafed PE, that contains no pseudoephedrine and thus
can't be used to make meth. That makes it immune from existing or pending
laws, and would give Sudafed PE valuable shelf space to itself. Other drug
makers aren't likely to have substitute products on the market for several
months at least.

The new Sudafed PE contains phenylephrine (PE), an ingredient contained in
several cold formulations Pfizer has sold overseas for years. Pfizer is
reformulating its entire Sudafed line and expects most of the products to
be changed to PE by the end of the year.

For years, lawmakers have been trying to shut down illegal labs in private
homes and apartments that produce meth in quantities for personal use. But
their efforts have been slowed or stymied by drug-industry lobbyists,
who've argued that such laws would unnecessarily burden customers who use
products with PSE as cold medicine, not as an ingredient for meth.

The toughest laws right now -- in Iowa and Oklahoma -- classify PSE as a
controlled substance. That means products containing PSE, including Wyeth's
Dimetapp Extentabs and Johnson & Johnson's Tylenol Cold & Flu must be sold
behind the pharmacist's counter (although a prescription isn't needed).
Buyers are required to sign a registry and the amount they can purchase is
limited -- to between 7.5 and 9 grams. (Nine grams is equivalent to about a
dozen 24-pill packages of Sudafed tablets, for example.) Analysts say the
laws pose a significant threat to sales in the $1.4 billion market for
products containing PSE.

Pfizer is now pushing for more laws like Iowa's, which not only restricts
sales of tablet forms of PSE, which are the easiest to use to make meth,
but also the gel cap and liquid forms, along with combination products that
contain PSE and other ingredients, like Schering-Plough Corp.'s Claritin-D.

Law-enforcement and government officials are pleased that Pfizer has joined
their cause, but they also complain that the company helped to keep
important laws from passing until it could benefit from them. "Pfizer's
strategy in the war on meth seems self-serving, to say the least," says
Will Pinkston, aide to Tennessee Gov. Phil Bredesen, adding that the
company's bottom-line tactic "is striking a sour note with [people] who've
been fighting the battle for years." Tennessee passed a law last month
requiring products made with PSE (except liquid, gel or liquid-filled gel
capsules) be sold only in licensed pharmacies. Buyers also must present
identification to complete a purchase.

"Pfizer last year was probably the largest opponent I had," says Marvin Van
Haaften, director for the governor's Office of Drug Control Policy for the
state of Iowa, which passed the country's toughest meth law in March after
a year-and-a-half battle. "This year, Pfizer became a close friend of mine."

"I'd like to have more enemies like Pfizer," says Scott Rowland, general
counsel of Oklahoma's narcotics bureau, who worked to get the first state
law passed and has since advised other state officials. From March to
December 2004, Oklahoma officials say the state's law has contributed to a
decline in the number of new meth labs -- in that time, meth lab seizures
were reduced by 80%.

In response to criticism that its position is self-serving, Pfizer
spokesman Jay P. Kosminsky says, "We've done the right thing all along."

"As the issue has evolved, our position has evolved," he says, but it has
stayed consistent on two issues: it believes classifying PSE as a
controlled substance is wrong, and any laws restricting products with PSE
should apply to all in the class, including tablets, liquid and gel capsules.

The company has "always been supportive of state efforts," contending that
states need to balance consumer interests with keeping the product out of
criminals' hands, Mr. Kosminsky says.

Pfizer worked for several years to develop a technology that would make it
impossible for meth manufacturers to extract PSE from Sudafed products,
says Mr. Kosminsky. But at the end of 2003, the company abandoned those
attempts and turned to using phenylephrine, which the Food and Drug
Administration says can be marketed in the U.S. without preapproval.

Leiner Health Products Inc. of Carson, Calif., which makes products with
PSE for specific brands, plans to introduce cold medicines with PE in June.
Schering-Plough sells cold medication containing PE and other ingredients
known as "combination products" in Latin America and the Asia-Pacific
region, but hasn't decided whether to do that in the U.S., a spokeswoman
says. Johnson & Johnson says it is exploring reformulation alternatives. A
Wyeth spokesman says, "We would have to see where this all goes before we
decide to reformulate."

Such a window of opportunity could be very profitable for Pfizer. If
Sudafed PE "is the only one on the shelf ... they're going to have a huge
win," says Jonathan Asher, president of Dragon Rouge, a New York brand
consulting firm.

Drug experts say the use of meth -- and the number of labs to produce the
drug -- is rising across the country. In Oklahoma, seizures of meth labs
rose from 125 in 1996 to 1,254 in 2002. During the same period in Iowa,
seizures rose from 31 to 1,009. Children are present in many of these
homegrown labs, law-enforcement officials say. Officials in Iowa says
nearly 1,000 children have been removed from such homes since 2002.

The labs are also becoming a public-health and law-enforcement crisis,
experts say. While most large-scale labs that produce the drug are in
Mexico and California, most of the smaller labs are based in homes and
apartments -- where mishaps cause explosions and the release of toxic
materials. State hazardous waste-cleanup crews must respond to these
scenes, and the bill is footed by taxpayers.