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  VERTEX
  PHARMACEUTICALS INCORPORATED

  130 WAVERLY STREET ·
  CAMBRIDGE, MA 02139-4242

  TEL.
  617.444.6100 ·
  FAX 617.444.6483

  http://www.vrtx.com

  August 31, 2009

Delivered via EDGAR

Securities
and Exchange Commission
 Division of Corporation Finance

100
First Street, N.E.

Mail
Stop 4720

Washington,
DC 20549

  Attn:

  Jim B. Rosenberg, Senior Assistant Chief Accountant

  Kei Ino, Staff Accountant

  Mark Brunhofer, Senior Staff Accountant

  Mike Rosenthall, Staff Attorney

  Jennifer Riegel, Staff Attorney

  Re:

  Vertex Pharmaceuticals Incorporated

  Form 10-K for the Period Ended December 31, 2008

  Form 10-Q for the Quarterly Period Ended
  March 31, 2009

  Definitive Proxy Statement on Schedule 14A filed
  April 8, 2009

  File No. 000-19319

Ladies
and Gentlemen:

The
purpose of this letter is to respond to the comments from the staff (the “Staff”)
of the Securities and Exchange Commission (the “SEC”) to Vertex
Pharmaceuticals Incorporated (the “Company”) set forth in the Staff’s
letter to Joshua Boger dated July 8, 2009 (the “Comment Letter”)
regarding the Company’s filings with the SEC referenced above. The comments
from the Comment Letter are reproduced below together with the Company’s
responses to those comments.

Form 10-K for the Period Ended December 31, 2008

Item 1. Business

Intellectual Property, page 15

Comment 1

We
note that you disclose that you have the rights to a number of U.S. and foreign
patents covering your potential drug targets, compounds you are developing to
modulate those targets, methods of making or using those compounds and
proprietary elements of your drug discovery platform.  Please expand your disclosure here to include
the number of patents related to each material potential drug target, compound,
method and/or proprietary element and the expiration dates for those patents.

Response 1

The
Company proposes to expand its disclosure regarding its intellectual property
in future periodic filings (commencing with its Annual Report on Form 10-K
for the year ending December 31, 2009) to provide additional information
in both narrative and tabular form regarding the patents and pending patent
applications that claim the composition-of-matter of its Phase 2 and Phase 3
drug candidates.  The expanded disclosure
would include (i) whether or not the patents have been granted in the
United States and the European Union, and (ii) expiration dates for the
issued patents and anticipated expiration dates for claims that are the subject
of patent applications.

As
part of its patent strategy, the Company seeks to augment its intellectual
property estate by filing patent applications covering pharmaceutical
compositions, related solid forms, formulations, dosing regimens, methods of
use and manufacturing methods for each of its drug candidates, as appropriate,
and as a result the Company currently has more than 800 patents and patent
applications in the Company’s intellectual property portfolio for the United
States alone.  However,
composition-of-matter claims are generally the most significant patent claims
for that segment of the pharmaceutical industry that focuses, like the Company,
on small molecule drug candidates that are new chemical compounds, and the
Company currently has patents or patent applications with composition-of-matter
claims for each of its more advanced clinical drug candidates.  Therefore, the Company believes that a focus
on composition-of-matter claims covering the Company’s more advanced clinical
drug candidates will provide the most meaningful disclosure to investors while avoiding
the investor confusion that could be engendered through disclosure regarding
the Company’s numerous secondary patents/patent applications.

The
Company expects that the expanded disclosure, to be updated as circumstances
dictate, would be substantially as follows:

We hold issued
patents and pending patent applications in the United States, and in foreign
countries we deem appropriate, claiming intellectual property developed as part
of each of our significant research and development programs, but we cannot be
certain that issued patents will be enforceable or provide adequate protection
or that pending patent applications will result in issued patents. While we
have numerous issued patents and pending patent applications in our patent
portfolio, we believe that the patents and patent applications in the United
States and European Union that claim the composition-of-matter of our drug
candidates that have progressed at least into Phase 2 clinical trials are the
most important to our business.  The following
table sets forth the status of the primary patents and patent applications in
the United States and the European Union covering the composition-of-matter of
these drug candidates:

  Drug Candidate

  Status of U.S. Patent

  (Anticipated Expiration,

  Subject to Potential Extensions)

  Status of European Union Patent

  (Anticipated Expiration,

  Subject to Potential Extensions)

  Telaprevir

  Application Pending
  (2021)

  Granted (2021)

  VX-770

  Granted (2025)

  Application Pending
  (2025)

  VX-809

  Application Pending
  (2026)

  Application Pending
  (2026)

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Management’s Discussion and Analysis of Financial
Conditions and Results of Operations

Critical Accounting Policies and Estimates, page 55

Comment 2

In
your discussion regarding the recognition of revenue associated with up-front
license fees, you indicate that your estimates regarding the period of
performance have changed in the past and may change in the future and that any
change could result in substantial changes to the period over which up-front
license fee revenues are recognized.
Please revise your disclosure to specifically discuss the magnitude of
your historical changes in estimate and the resulting financial statement
impact as well as the impact of reasonably likely changes in your current
period estimate.

Response 2

In
the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30,
2009 (the “Second Quarter 10-Q”), the Company supplemented its
discussion of its critical accounting policies and estimates with respect to
up-front license fees as follows (with the supplemental language emphasized,
from pages 37 and 38 of the Second Quarter 10-Q):

“We recognize revenues
from nonrefundable, up-front license fees related to collaboration agreements,
including the $165.0 million we received from Janssen in 2006, on a
straight-line basis over the contracted or estimated period of performance. The
period of performance over which the revenues are recognized is typically the
period over which the research and/or development is expected to occur. As a
result, we often are required to make estimates regarding drug development and
commercialization timelines for compounds being developed pursuant to a
collaboration agreement. Because the drug development process is lengthy and
our collaboration agreements typically cover activities over several years,
this approach often has resulted in the deferral of significant amounts of
revenue into future periods. In addition, we periodically evaluate our estimates
in light of changes and anticipated changes in the development plans for our
drug candidates and because of the many risks and uncertainties associated with
the development of drug candidates, our estimates regarding the period of
performance have changed in the past and may change in the future. Our
estimates regarding the period of performance under the Janssen collaboration
agreement were adjusted in 2007 as a result of changes in the global
development plan for telaprevir. This adjustment was made on a prospective
basis beginning in the period in which the change was identified and resulted
in a decrease in the amount of revenues we were recognizing from the Janssen
collaboration by $2.6 million per fiscal quarter after the adjustment.
Any future adjustment in our estimates of the period of performance under our
collaborations could result in substantial changes to the period over which the
revenues from an up-front license fee related to each such collaboration are
recognized. If we adjusted our estimates as of July 1, 2009 to increase
the period of performance under the Janssen agreement by one year, it would
result in a decrease in the amount of deferred revenues we recognize from our
Janssen collaboration of approximately $1.1 million per fiscal quarter
beginning in the third quarter of 2009.”

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Results  of
Operations

Research and Development Expenses, page 61

Comment 3

We
acknowledge your July 30, 2004 response to comment 1 of our June 28,
2004 letter in which you indicated that you did not track research and
development expenses by project.  Please
tell us whether you have since modified your systems to track these expenses by
project.  If so, please revise your
disclosure to add discussion of these expenses by project.  If not, please specifically disclose that
fact, explain why you do not maintain and evaluate research and development
costs by project and provide other quantitative or qualitative disclosure that
indicates the amount of the company’s resources being used on each project.

Response 3

Since
the Company’s prior response to the Staff dated July 30, 2004, the Company
has not modified its systems to track expenses for individual drug
candidates.  Specifically, the Company
does not assign to individual drug candidates internal costs such as salary and
benefits, stock-based compensation expense, laboratory supplies and
infrastructure costs, because employees within the Company’s research and
development programs typically are deployed across multiple research and
development programs and the Company manages its research and development
groups on a consolidated basis. While the Company does track external costs by
individual drug program, such as the costs of services provided to the Company
by clinical research organizations and costs of other outsourced research
activities, the Company’s internal costs are usually significantly greater than
these external costs, and disclosure of only external costs would provide an
incomplete and potentially misleading picture of the research and development
costs on a drug candidate basis.  In the
Second Quarter 10-Q, the Company supplemented its disclosure regarding research
and development expenses to explain why it does not track expenses for individual
drug candidates, as follows (page 41 of the Second Quarter 10-Q):

“Our research and development expenses
include internal and external costs incurred for our drug candidates, including
telaprevir and VX-770. We do not assign to individual drug candidates our
internal costs such as salary and benefits, stock-based compensation expense,
laboratory supplies and infrastructure costs because the employees within our
research and development groups are typically deployed across multiple research
and development programs. These internal costs are significantly greater than
our external costs, such as the costs of services provided to us by clinical
research organizations and other outsourced research, which we do allocate by
individual drug program.”

The
Company believes that it is the overall expansion of its research and
development expenses in response to the progress that has been made with
respect to the development of its lead drug candidates, and in particular
telaprevir, that is of most interest to its investors and the Company has
provided significant disclosure regarding this expansion of its research and
development expenses.   For example, in
its Annual Report on Form 10-K for the year ended December 31, 2007,
the Company stated that it was “focusing a high proportion of our financial and
management resources on telaprevir,” that “successfully commercializing
telaprevir will require a substantial additional financial investment over the
next several years” and that “[i]n 2008 and the following years, we expect to
invest significant resources to expand our capabilities in clinical
development, regulatory affairs, quality control and commercial operations and
to build and manage a commercial supply chain as we continue development

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and
prepare for the potential commercial launch of telaprevir.”  In addition, in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2008 and in the Second
Quarter 10-Q, the Company disclosed that “[o]ver the next several years, we
expect to focus a substantial portion of our resources on the development and
potential commercialization of telaprevir.”
In the Second Quarter 10-Q, on page 42, the Company added the
following to provide additional qualitative disclosures about resources being
used on telaprevir: “[o]ur lead drug candidate telaprevir represents the
largest portion of our development costs for our clinical drug candidates.”

Finally,
the Company considered the Staff’s guidance regarding accounting and disclosure
by companies engaged in research and development activities that was referenced
in the SEC’s comment letter, dated June 28, 2004, and the Company added in
the Second Quarter 10-Q the following supplemental disclosure regarding
telaprevir in its discussion of its research and development expenses (page 42
of Second Quarter 10-Q):

“Based on the
completion of enrollment of our Phase 3 clinical trials of telaprevir in February 2009,
we anticipate that our ongoing Phase 3 clinical trials will be completed
in mid 2010, but that development costs associated with other clinical trials
of telaprevir may continue after the completion of the registration trials. If
we are able to successfully commercialize telaprevir in accordance with current
development timelines, we anticipate revenues and cash flows from the sales of
telaprevir to commence in 2011. Our other drug candidates are less advanced and
as a result any estimates regarding development timelines for these drug
candidates are highly subjective and subject to change, and we cannot at this
time make a meaningful estimate when, if ever, these drug candidates, including
the drug candidates we acquired from ViroChem, will generate revenues and cash
flows.”

Definitive Proxy Statement on Schedule 14A filed April 8,
2009

Compensation Discussion and Analysis

2008 Compensation Decisions for Performance-Based
Elements, page 29

Comment 4

You
disclose that you “consider aspects of [your] annual corporate goals to be
confidential information and closely guard this information.”  Please supplementally describe the “aspects
of [your] corporate goals” that you believe constitute confidential
information.  Please present a
comprehensive analysis supporting your conclusion that the disclosure of this
information is not material to investors and would cause competitive harm if it
is disclosed.  Additionally, when
information regarding targets and goals is not provided on the basis that
disclosure would cause competitive harm, you must discuss how difficult it will
be for the executive or how likely it will be for your company to achieve the
undisclosed targets or goals.  Please see
Instruction 4 to Item 402(b) of Regulation S-K.  Please note that you may request confidential
treatment for portions of your analysis pursuant to Rule 83.

Response
4

(i)                                     Supplemental Description of
Aspects of Corporate Goals Constituting Confidential Information.

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In
the definitive proxy statement for the 2009 Annual Meeting of Stockholders (the
“2009 Proxy”), the Company provided substantial disclosure regarding the
Company goals for and performance in 2008.
This discussion included full disclosure of the four top-level Company
goals for 2008 (page 29 of the 2009 Proxy).  Following the disclosure of these goals, the
Company provided a more detailed discussion of the Company’s accomplishments
with respect to these goals in 2008 (page 29 of the 2009 Proxy).  The Company