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Executive Summary

WYETH-AYERST PRESIDENT HASSAN's PROMOTION TO AHP GROUP VP of the company's global pharmaceutical business moves him into a newly created post with oversight for all AHP pharmaceutical divisions and worldwide research. The promotion of Fred Hassan, announced March 1, is part of American Home Products' global effort to streamline business and increase competitiveness, the company said. "Fred Hassan's mandate is to continue positioning AHP to benefit from the rapid changes affecting the pharmaceutical industry brought on by health care debate in America and cost containment in the U.S. and Europe," AHP CEO John Stafford commented. While the challenge facing the industry is great, Stafford noted, "there is no one better qualified than [Hassan] to guide this vital area." He added that Hassan "possesses the foresight and managerial skills so essential for maximizing the opportunities created by the evolution of our industry." Hassan, 47, joined Wyeth-Ayerst as president in February 1989 following 16 years at Sandoz, where he was CEO. His appointment continues the trend toward top executives at U.S. drug firms having extensive international experience. Hassan was born in Pakistan and educated at the University of London. He earned an MBA from Harvard. Under Hassan, Wyeth-Ayerst moved to number one in dispensed prescription volume in the U.S. A recent ad run by the company in pharmacy journals highlights Wyeth-Ayerst's surpassing Bristol- Myers Squibb, Glaxo and Merck with over 87 mil. scripts dispensed from August 1991 to August 1992. Wyeth-Ayerst has continued to increase investments in R&D while "its average price per prescription has remained at or below the industry average," the company said, specifically noting its Premarin conjugated estrogens product. Wyeth-Ayerst's pricing practices have been criticized in Congress because of the Government Accounting Office's finding that large price differentials exist in the company's drug pricing for certain products between the U.S. and Canadian markets ("The Pink Sheet" Oct. 26, 1992, p. 3). Political trouble spots aside, Wyeth-Ayerst continues to ride the success of Premarin, which has sales that have increased by almost 50% annually over the last two years. The product has not faced generic competition in the U.S. since 1991 and also has generated sales increases internationally and from education efforts about the health benefits for postmenopausal women of using conjugated estrogens. However, generic firms are reformulating their products to mimic Premarin's rate of absorption and conducting new blood level studies, so the company's de facto freedom from generic competition may soon end. Within a year of joining Wyeth-Ayerst, Hassan oversaw the assimilation of A.H. Robins when the troubled firm was acquired by AHP. Robins' generics subsidiary Elkins-Sinn, which is overseen by Wyeth-Ayerst, has recently been cited for manufacturing deficiencies by FDA. In warning letters sent to the company in July 1992 and January of this year, FDA said it had found lack of assurance of sterility and inadequate validation procedures in Elkins-Sinn's production of injectable diazepam and tobramycin ("The Pink Sheet" Feb. 15, T&G-4). Wyeth-Ayerst Exec-VP Robert Essner, 45, succeeds Hassan as president of the AHP subsidiary. Essner also joined Wyeth-Ayerst in 1989 from Sandoz where he served as chief operating officer. After two years as senior VP- sales and marketing, Essner was promoted to exec VP in charge of Wyeth-Ayerst's commercial operations. Essner will report to Hassan, as will Wyeth-Ayerst International President David Olivier and Wyeth-Ayerst Research President Robert Levy. Hassan will continue to report to AHP President Bernard Canavan.

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