He notes that the pendulum of opinion swings back and forth on the value of diversification: “For years we were criticised; in today’s environment we’re praised.” And he cites conversations with Pfizer’s CEO about the 2006 sale of Pfizer’s consumer health business to J&J for $16.6 billion.

“Jeff [Kindler] has told me numerous times his regrets” about the sale, Weldon told the FT. (Pfizer cut the deal before Kindler took over as CEO, by the way.) Pfizer got back into the consumer health business this year when it bought Wyeth, which owns Advil, ChapStick and a few other brands you’ve heard of.

We checked in with Pfizer to see what the company had to say about the Weldon quote in the FT. Kindler has said many times that he is focused on the future, not on the past, a Pfizer spokesman told us.

Photo: Associated Press

A Bloomberg News story out this morning takes a stab at answering the question, and comes up with a list that includes a few solidly profitable drug makers that have market caps between $1 billion and $3 billion and relatively low debt burdens.

• Endo Pharmaceuticals, which sells pain drugs, was cited as a possible target by a Credit Suisse analyst, Bloomberg notes. The company generated $339 million in free cash flow last year. It had $371 million in debt as of the quarter ended Sept. 30 and has a market cap of $2.6 billion.
• King Pharmaceuticals sells generic drugs and recently had a branded, tamper-resistant narcotic approved by the FDA. The company has a market cap of $2.9 billion. It generated $433.9 million last year in free cash flow and had $400 million in debt as of the quarter ended Sept. 30, Bloomberg says.
• Ratiopharm, the family-owned generic drug maker is collecting bids right now — and as we noted recently, there have been reports that several private equity shops are interested, including KKR, TPG, Permira and Goldman Sachs’s private-equity arm.

Image: iStockphoto

A few of the senators who voted Saturday to begin debate on the bill rushed out to the Sunday news shows to say they wouldn’t vote for final passage of the bill in its current form, and they singled out the public option as a sticking point.

Meanwhile, the WSJ reports, Delaware Dem. Tom Carper is working on a possible compromise that sounds something like the “trigger” mechanism Olympia Snowe was pushing a while back, and that could win the support of the centrists. Here’s the idea: States where insurance is deemed unaffordable for average families would have the option of offering an insurance plan that would be set up by the federal government and overseen by a nonprofit board.

Snowe, a Maine Republican, voted in committee for the Senate Finance bill — which had no public option at all — then voted against bringing the current bill (which has a public option but allows states to opt out of offering it) to the floor. But, the New York Times notes, she has suggested she is still open to negotiating compromises for the final bill.

The CBO, as you may recall, recently estimated that the public option as described in the current senate bill, would enroll only 3 million to 4 million people.

Correction: An earlier version of this post incorrectly said Sen. Carper represents Maryland. He represents Delaware.

• Mega-mergers by Pfizer, Merck and others is providing “increased scale and a somewhat better balance” between the companies’ expiring patents and their product pipelines, Moody’s says. The “unprecdented” M&A binge is expected to slow but activity is likely to continue with smaller, bolt-on deals.
• Vaccines and treatments for H1N1 flu are “providing a nice boost to earnings in 2009 and also possibly in early 2010” for players that include GlaxoSmithKline, Roche and Novartis. But Moody’s adds the swine-flu business is unpredictable and the upside may prove temporary.
• Generic makers are an industry bright spot and should remain one of health care’s most recession-resistant sectors, Moody’s says. Teva, Mylan and Watson in particular are benefiting from acquisitions. We hardly need to note that the same blockbusters going off patent to the joy of generic makers spell tears for branded makers.
• Pharma companies look like they have dodged the worst-case scenarios under the U.S. health-care overhaul. While the costs to the industry are still being sorted out, “we currently do not believe reform measures will be extremely onerous for the industry,” Moody’s says.

Put it all together and the rating company says the overall outlook for the industry’s credit fundamentals is negative over the next 12-18 months. Of course, Moody’s in the past few years has been anything but cheery on various segments of the health-care world, as can be seen here, here and here.

Image: iStockphoto

Four patients in the past six weeks had Tamiflu-resistant flu at Duke University Hospital. In at least two of the cases, patients contracted the resistant bug before they had been treated with Tamiflu, a Duke infection-control doctor told the Health Blog. All of the patients were on a cancer ward, and had suppressed immune systems.

Norway reported finding a mutated strain of H1N1 in three patients, two of whom had died from the disease. The mutation might make the more likely to move deep into the airways and cause more serious disease, but the mutation is unlikely to alter the effectiveness of drugs or vaccines. A CDC official said that the mutation has been seen in some cases elsewhere in the world, and in some cases has been associated with more mild disease.

In the U.S., key measures of the pandemic’s intensity declined in the week that ended on Nov. 14, the CDC said. For the third straight week, fewer people went to the doctor to be treated for influenza-like illness. Influenza hospitalization rates and the proportion of deaths attributed to flu and pneumonia also declined. Still, rates are far higher than they would normally be at this time of year. And officials said rates could rise again after the holidays, the time of year when seasonal flu usually kicks in.

China’s Ministry of Health said local officials who conceal cases of H1N1 could be subject to punishment, the WSJ reports. The statement came after a doctor — known for speaking out in 2003 against official reports that understated the extent of the SARS epidemic — questioned the number of H1N1 deaths reported so far in China.

Image of H1N1 by C. Goldsmith via CDC

New agreements between Pfizer and Aurobindo of India could be coming in the next month or two, Dow Jones Newswires reports this morning, citing execs from both companies who say something’s in the works. The companies already have a deal that allows Pfizer to sell dozens of generic drugs in both developed and emerging markets.

Pfizer plans to set up a division to sell generic drugs in Japan, according to news reports this week. The unit will initially sell Pfizer’s own off-patent drugs, but will also apply for licenses to sell generic versions of drugs developed by other companies, MarketWatch says.

Building global generics businesses is a popular move among big companies these days, as everybody tries to figure out how to grow in the post-blockbuster era. Sanofi-Aventis recently bought several generics companies scattered around the world. GlaxoSmithKline made a deal with a South African company last year to sell off-patent drugs in the developing world.

Photo: Associated Press

Most of the award — $244 million — was punitive damages. The balance was compensatory damages for the woman, who has emphysema, the Associated Press reports. She’s 61; she started smoking in 1968 and stopped in 1993.

Her lawyers argued that the company knew cigarette smoking was addictive and harmful, but concealed that information.

The cigarette lawsuits in Florida have been going on more or less forever; this 2007 WSJ story explains much of the legal history.

Philip Morris USA, which is owned by Altria, said it would appeal, the Sun-Sentinel reports. “From the beginning, this case was marked by a fundamentally unfair and unconstitutional trial plan that allowed the jury to rely on findings by a prior jury that have no connection to the plaintiff,” an Altria official said in a statement.

Photo by GypsyRock via Flickr

The guidelines note that pap smears can lead to procedures that may increase the risk of premature delivery if a woman gets pregnant later in life. And, they note, cervical cancer is extremely rare in adolescents. So they advise waiting until age 21 to begin screening; earlier guidelines had recommended starting at 21 or three years after the start of sexual intercourse, whichever was earlier.

Women in their 20s should be screened every other year, instead of every year, the guidelines say. Cervical cancer tends to be slow-growing, and the group says studies have suggested that annual pap smears “offer little advantage” over screening every two or three years.

The guidelines are from the American College of Obstetricians and Gynecologists, a professional society that’s not connected to the government. And the group says it’s just a coincidence that their guidelines are coming out a few days after the mammography guidelines.

Meanwhile, the authors of those mammography guidelines tried to calm things down a bit yesterday. “The task force is not against women having mammograms in their 40s,” one of the authors of the guidelines told the WSJ. Women in that age group should consult with their doctors and decide for themselves whether to be screened, she said.

The group’s original recommendation says roughly the same thing, but in more technical terms. “The decision to start regular, biennial screening mammography before the age of 50 years should be an individual one and take into account patient context, including the patient’s values regarding specific benefits and harms,” the guidelines say.

Image: iStockphoto

Allergan, which sells Botox, took a civil rights angle: The tax “discriminates against women,” the company said in a statement. Some 86% of cosmetic surgery patients are working women ages 35-50, with an average annual income of $55,000 per year, according to Allergan.

“What’s next? Are we going to tax people who color their hair?” the CEO of Medicis, a drug company that sells fillers, told Dow Jones Newswires.

The American Academy of Cosmetic Surgery, which is fighting the provision, says “a large portion of those being taxed would be the baby-boomer generation. And as this age group continues to age, the more interest will be generated in cosmetic procedures.”

A spokesman for the 2,500-member group said they were surprised to see the provision in the Senate bill this week, because it had already surfaced and sank in July. The tax is not in the House bill.

The tax is on elective procedures, and would not apply to any procedure to correct birth defects or issues arising from disease, accidents or trauma. The CBO says it would raise about $5 billion over the next decade.

If the bill were to become law (unlikely), it would get rid of the existing payment formula, which calls for cuts of more than 20% to Medicare’s payment rates for doctors. Blocking the cuts, set to take effect next year, would add more than $200 billion to the deficit over the next 10 years, according to the CBO.

The AMA and other doctors’ groups praised the House for passing the bill. But the Senate has already considered a similar bill and it didn’t go anywhere, because of the high cost.

When the Senate bill failed, Harry Reid said the Senate would go to a “one-year fix.” That’s the move Congress had made multiple times in recent years — blocking looming pay cuts to doctors, without changing the underlying formula that keeps calling for the cuts.

Image iStockphoto