discussion in the “Product Developments” section of this Financial Review.

Merger-Related In-Process Research and

Development Charges

The estimated value of merger-related IPR&D is expensed at the acquisition date. In 2005, we expensed $1.7 billion of IPR&D, primarily related to our acquisition of Vicuron on September 14, 2005 ($1.4 billion) and our acquisition of Idun on April 12, 2005 ($250 million). In 2004, we expensed $1.1 billion of IPR&D, primarily related to our acquisition of Esperion ($920 million). In 2003, we expensed $5.1 billion of IPR&D related to our acquisition of Pharmacia.

Merger-Related Costs

We incurred the following merger-related costs, primarily in connection with our acquisition of Pharmacia which was completed on April 16, 2003:

Integration costs represent external, incremental costs directly related to an acquisition, including expenditures for consulting and systems integration.

In connection with the acquisition of Pharmacia, Pfizer management approved plans to restructure and integrate the operations of both legacy Pfizer and legacy Pharmacia to combine operations, eliminate duplicative facilities and reduce costs. As of December 31, 2005, the restructuring of our operations as a result of our acquisition of Pharmacia is substantially complete. Restructuring charges included severance, costs of vacating duplicative facilities, contract termination and other exit costs. Total merger-related expenditures (income statement and balance sheet) incurred during 2002-2005 to achieve these synergies were $5.4 billion, on a pre-tax basis.

The restructuring of our operations resulting from our merger with Warner-Lambert was substantially complete as of December 31, 2003. Accordingly, we did not incur significant integration or restructuring charges in 2005 and 2004 directly related to our merger with Warner-Lambert.

Cost synergies from the Pharmacia acquisition were $4.2 billion in 2005, $3.6 billion in 2004 and $1.3 billion in 2003. Synergies come from a broad range of sources, including a streamlined organization, reduced operating expenses, and procurement savings.

Restructuring Costs Associated with Legacy

Pharmacia — Capitalized

We recorded, through April 15, 2004, restructuring costs associated primarily with employee terminations and exiting certain activities of legacy Pharmacia. These costs were recognized as liabilities assumed in the purchase business combination. Accordingly, these costs were considered part of the purchase price of Pharmacia and have been recorded as an increase to goodwill (see Notes to Consolidated Financial Statements—Note 2A, Acquisitions: Pharmacia Corporation). At December 31, 2005, liabilities for restructuring costs incurred but not paid totaled $132 million and are included in Other current liabilities. Restructuring charges after April 15, 2004 associated with legacy Pharmacia are charged to the results of operations. Changes to previous estimates of restructuring charges that were included as part of the purchase price allocation of Pharmacia are recorded as a reduction of goodwill or as an expense to operations, as appropriate.

The majority of the restructuring costs