This is a partial transcript from "Your World with Neil Cavuto," April 5, 2004, that was edited for clarity.
Watch "Your World w/Cavuto" weekdays at 4 p.m. and 1 a.m. ET.
NEIL CAVUTO, HOST: Three stocks on the Dow (search) are gone with the wind as the Big Board does some spring-cleaning. Stocks headed out this week are AT&T, International Paper and Eastman Kodak. Stocks stepping in? AIG, Verizon Communications and Pfizer.
Joining me now is Hank McKinnell, he is the chairman and CEO of Pfizer. Hank, good to have you back. Thanks.
HANK MCKINNELL, CEO, PFIZER (PFE): Hello, Neil, good to be with you.
CAVUTO: Congratulations on this. Obviously the folks at Dow Jones saw something in you. How do you feel about that?
MCKINNELL: Well, we’re very pleased by the recognition. Pfizer, as you know, was founded in Brooklyn, New York 155 years ago. The quintessential American company. We went public in 1942. Since then we split the stock 3,888 times and during the last 10 years shareholder return, the increase in the share price plus the dividend, is up over 700 percent.
CAVUTO: You know, there is also the curse of the club to think about, any time a new entrant joins the Dow that stock has a tough go of it. Sometimes for years. Are you worried that the roll you have been on stopped right here?
MCKINNELL: Not at all. We have 20 new drugs in our pipeline we expect to introduce by the end of 2006. We do have a couple of big drugs going off patent during the following period, but in that pipeline products and registration recently approved are drugs for heart disease, for cancer, for depression, and that’s an amazing list.
CAVUTO: Hank, if you don’t mind indulging a question I have for you from your purchase, head of the Business Roundtable, how do you see the economy now as interest rates have been backing up, and things seem to be picking up?
MCKINNELL: Well, we do a survey of the 150 CEOs of the Business Roundtable every quarter. The last number showed expectations for strong economic growth, for improvement in capital spending, and for the first time we saw plans to increase hiring, not decrease hiring. Which is expected. Hiring always follows an economic recovery. And just as we had a somewhat modest recession, we are seeing a somewhat modest pickup in job creation, but that should improve over the quarters ahead.
CAVUTO: But I’m wondering if, given the fact that both the Democratic and the Republican presidential candidate is looking at trying to rein in drug prices, albeit with different tactics, are you concerned that this boomerangs on you?
MCKINNELL: Well, we certainly understand there’s too many people in America that need help affording access to the prescription medicines they need. The answer is the Medicare prescription drug benefit, which will be in place by ‘06. The discount cards will be available in two months, and they’re going to surprise people with how attractive they are. Then we need to turn to the uninsured, particularly the low-income uninsured. There is a great opportunity for government to help in a very meaningful way here.
CAVUTO: The president has been saying it -- and he said it again today -- that the tax cuts that he orchestrated in three waves over his presidency are what is contributing to this turnaround now. Do you buy that?
MCKINNELL: Oh, absolutely. We have had very stimulative monetary policy and fiscal policy, both government spending and tax reductions, clearly underlie the recovery that is under way. It is very difficult to tax your way to sustainable economic growth. The tax cuts that are in place are a major factor in the recovery we are seeing.
CAVUTO: What if we have more Fallujahs, Hank? What if we have more violence in Iraq and it throws into question the government changeover, June 30? How much does that weigh on corporate America?
MCKINNELL: Well, clearly increasing problems in the Middle East, increasing insecurity and particularly threats to our homeland security would hurt both investor confidence and business confidence. But I have great faith in those wonderful men and women serving in the Middle East in our armed forces.
CAVUTO: All right, Hank McKinnell, Pfizer chairman and CEO, out of the Business Roundtable. Always a pleasure, congratulations again on being in the Dow.
MCKINNELL: Thank you, Neil.
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