An article in today's New York Times (Seeking Profit for Taxpayers in Potential of New Drug) requires additional commentary to accurately portray the history of Pfizer's R&D program for Xeljanz; our collaboration with NIH on the JAK3 pathway; the return on federal investment in basic research; and the affordability and accessibility of Xeljanz.

Over the course of 20 years, Pfizer invested more than $1 billion into the discovery, development and commercialization of Xeljanz. The association between NIH and Pfizer on the JAK3 pathway should be clearly and precisely explained.

• Pfizer applied knowledge gained from the publicly available, basic research results of an outstanding NIH researcher to help advance an existing R&D program on immunosuppressants.
• Pfizer entered into a CRADA with NIH in 1996 to explore a separate basic biology question, unrelated to the Xeljanz R&D program. The research conducted under the CRADA did not lead to any treatment-related discoveries and did not contribute in any way to the Xeljanz R&D program.
• Pfizer contributed its own expertise and resources for the CRADA, as well as funding part of NIH's research effort.

Furthermore, the article does not fully explain the real return to taxpayers on federally funded basic research.

• Federal investment in basic research can help reduce the risks associated with early-stage scientific inquiry, which can generate new insights into disease biology.
• These findings can stimulate private sector innovators to assume all the risk and investment to validate those insights and convert new understanding of disease biology into an actual treatment for patients — a vast endeavor that succeeds only occasionally.
• When taxpayer-funded research helps stimulate efforts like the Xeljanz R&D program, there is a substantial return on investment. If a company chooses to initiate a high-risk $1B investment on the back of a new insight into disease biology, as we did, that is a significant return to the American public.
• When a new medicine like Xeljanz results, it's a return that delivers an innovative medicine yielding human, societal and economic benefits, continued investment in a biopharma R&D capability, and continued, robust corporate tax revenue to the government, as well as employment of a highly skilled work force.
• It furthermore yields a new, downstream era of value when the innovation moves beyond its period of exclusivity and generic versions become available for use by generations of Americans.

In summary, when public sector research activity stimulates the private sector to innovate to deliver key advances, significant returns accrue. The current economic model for collaboration and innovation sustains this vital biomedical research "ecosystem." We must continue to support a strong NIH, a strong R&D capability in the biopharma sector, and policies that drive collaboration and innovation.

Following a robust Xeljanz R&D effort, we have delivered a major innovation to the market at a cost that is 13.9 percent less than the current leading therapies in the category. Patients' out-of-pocket costs will vary depending on what insurance coverage they have. Pfizer provides help for eligible patients through a co-pay support program. We also offer programs for patients with financial needs who qualify (http://www.xeljanz.com/xelsource).

Background Timeline:

Over the course of 20 years Pfizer invested more than $1 billion into the discovery, development and commercialization of Xeljanz. This extensive effort included screening hundreds of thousands of our compounds in our proprietary file to identify a lead molecule, preparing more than 1,000 variations of our original lead molecule in order to come up with one investigational compound, and over the course of a decade, conducting one of the largest clinical trial programs in rheumatoid arthritis at the time, encompassing more than 5,000 patients in over 550 locations in more than 40 countries in order to evaluate the safety and efficacy of the Xeljanz compound.

1. Pfizer believes it first became aware of the JAK pathways at a scientific conference in 1993 in which John O'Shea, MD, presented experimental findings about the JAK3 enzyme. Dr. O'Shea's findings were also published in 1994. This research was in the public domain, and thus widely accessible.
2. At that time, Pfizer was exploring potential immunosuppressant agents in the field of transplantation. Thus, between 1993 and 1996, Pfizer began exploratory biology that ultimately led to the discovery of the Xeljanz^® molecule (tofacitinib).
3. On a parallel path, Pfizer entered a CRADA with NIH to better understand the interaction between JAK3 and cytokine receptors, specifically one receptor (IL-2). Although this line of exploration occurred simultaneously with Pfizer's efforts to discover Xeljanz, it concerned a different theory for treating inflammation. Pfizer provided the majority of the funding for the research.
   • The NIH work was led by Dr. O'Shea, an outstanding scientist who led a team that cloned JAK3.
   • The research that he and his team performed under the CRADA advanced scientific knowledge regarding the role of cytokine signaling in inflammation pathways. However, it did not lead to discovery of the Pfizer compound which resulted in Xeljanz.
4. To our knowledge, the CRADA did not yield any compounds or patentable intellectual property. Under the terms of the CRADA, the NIH was entitled to — and did — make publicly available the results of the research supported by Pfizer, including ten publications. In this way, the CRADA benefited the entire research community and the public at large.
5. Beginning in 1996, Pfizer scientists screened thousands of compounds in a proprietary compound file against the JAK3 enzyme. This led to identification of Pfizer's lead compound. Between 1997 and 2000, Pfizer made synthetic analogs of this lead molecule.
   • In 2000, Pfizer obtained a non-exclusive license from the NIH for certain patents relating to the JAK-3 protein to be used for research purposes. John O'Shea was one of the inventors. Pfizer paid the NIH for the license, and has been one of approximately ten companies to do so. Pfizer independently developed a screening assay to identify a lead compound and subsequently optimized that lead through continued screening efforts. This work drew on a broad knowledge set and is one of a multitude of steps that make the invention of a molecule possible.
6. In all, Pfizer prepared more than 1,000 variations (or synthetic analogs) of the original lead, eventually generating an investigational compound, which is known as tofacitinib. Pfizer filed for a patent covering tofacitinib in December 2000, and it was issued in September 2003.
7. Pfizer then spent more than a decade conducting one of the largest clinical trial programs in RA at that time to evaluate the safety and efficacy of Xeljanz. In doing so, Pfizer took on the great risk and expense associated with development of this compound.
8. Today, as a result of Pfizer's efforts, Xeljanz is approved in the U.S., bringing medical benefit and value to patients and our health care system.