This week there was not very much interesting material from my clinical experience to write about, so I decided to post on a noteworthy and attention-grabbing topic in the news this week.
Pfizer’s patent on Lipitor expired this week on Wednesday, November 30, but not without some questionable and unparalleled tactics from Pfizer itself. Lipitor is the world’s best-selling drug and Pfizer, the world’s biggest drug company, is not ready to give up its market share yet. The drug made $106 billion in sales over the past ten years, $7.2 billion of that in 2010. It was the first drug to make more than $10 billion in one year. Up until Wednesday, only Pfizer was able to make money off of it.
The FDA approved India’s biggest drug company, Ranbaxy, to be able to produce generic atorvastatin. Interestingly, this decision by the FDA was made after a compromise by Ranbaxy to share its profits with the world’s biggest generic drug producer, Teva. The compromise may have been necessary because the FDA was concerned about suspected violations in drug manufacturing that occurred at Ranbaxy’s plants. It is unknown what share Teva will receive, but is speculated to be about one third of the profits. In addition, Pfizer approved Watson Pharmaceuticals to sell the generic as well, but in return Watson will have to turn over approximately 70% of the profits back to them. Ranbaxy will be the only FDA approved company to sell the generic for the first six months. These two companies are the only ones allowed to sell it during this period. It is noteworthy that both of these drug manufacturers had to use profit-sharing to gain the exclusive rights to sell the generic version. After the first six months, the restriction ends.
Pfizer has been working for at least a year on strategies for how to keep Lipitor’s market share. One of the tactics includes a coupon for a lowered co-pay of just $4, which is cheaper than the generic. I have already heard Pfizer’s advertisements on the radio and seen them on television for this discount card. The main restriction of this program is that only patients with private insurance are eligible.
Pfizer has also made agreements with pharmacy benefit managers, which are third-party companies that coordinate between the drug companies, insurance companies, and pharmacies. The agreement gives substantial price decreases for the pharmacy benefit managers who are able to convince pharmacies to not sell the generic, and fill prescriptions written for atorvastatin with Lipitor instead. This deal would last for the first six months that the generic is available, and would even apply to some Medicare Part D plans. It gives Pfizer more money and disadvantages patients who have to pay more for the brand name. A way patients could get around it would be to use the coupon.
Another tactic Pfizer is using is preventing the generic drug from being filled in mail-orders. This is significant because anywhere from 30-40% of prescriptions written for Lipitor are filled in this way. Pfizer was able to preserve about 90% of this business through matching the generic price and promising to not let the market run out of the drug.
Combining these tactics, Pfizer could keep up to 40% of the market share for Lipitor for up to the first six months it is generic. However, Pfizer’s tactics did not completely pay off. WellPoint, the health insurance company with the biggest number of members, decided to sell the generic cheaper than Lipitor. Additionally, not all pharmacy benefit managers are supporting Pfizer’s strategies and are advocating that the generic be used because it is cheaper. Others are suggesting that the brand name drug be purchased for a reduced price with the discount card for just the first six months, then switching to the cheaper generic afterwards.
It is interesting to note that Pfizer’s behaviors provoked further interest by three senators, who wanted to investigate the potential effects on Medicare and patients. The senators are concerned that Pfizer’s tactics may end up costing patients more.
I think Pfizer is trying to do as much as it can to squeeze the remaining amount of money out of Lipitor. Pfizer knows Lipitor’s days are numbered and eventually will be too cheap to promote, but it seems they are not going down without a fight. From a strictly business perspective these tactics seem smart and savvy, but from a doctor’s and patient’s perspective they seem a bit sneaky. In my opinion, costing patients more money for the brand name because they are not able to get the generic even after the patent has expired is not right. However, whether patients will have to pay more is not fully clear yet. Hopefully the discount card will allow cheaper access to the drug for the next six months. Check out the references below for more information.
Edney, Anna, Adi Narayan, and Drew Armstrong. “Pfizer Lipitor Sales Are Threatened by Ranbaxy Generic Copy.” Bloomberg – Business & Financial News, Breaking News Headlines. Bloomberg.com, 1 Dec. 2011. Web. 02 Dec. 2011. <http://www.bloomberg.com/news/2011-12-01/ranbaxy-s-lipitor-copy-threatens-pfizer-sales.html>.
Grey, Jamie. “World’s Top-selling Drug Goes Generic.” Dallas – Fort Worth News | Wfaa.com. KTVB, 2 Dec. 2011. Web. 02 Dec. 2011. <http://www.wfaa.com/news/health/134923188.html>.
MacDonald, Elizabeth. “Generic Lipitor About to Hit the Market.” Fox Business | Business News & Stock Quotes – Saving & Investing. FoxBusiness.com, 2 Dec. 2011. Web. 02 Dec. 2011. <http://www.foxbusiness.com/markets/2011/12/02/generic-lipitor-about-to-hit-market/>.
Wilson, Duff. “Facing Generic Lipitor Rivals, Pfizer Battles to Protect Its Cash Cow.” NYTimes.com. The New York Times, 29 Nov. 2011. Web. 2 Dec. 2011. <http://www.nytimes.com/2011/11/30/health/generic-lipitor-sets-off-an-aggressive-push-by-pfizer.html?pagewanted=all#>.
Wilson, Duff. “Plan Would Delay Sales of Generic for Lipitor.” NYTimes.com. The New York Times, 11 Nov. 2011. Web. 2 Dec. 2011. <http://www.nytimes.com/2011/11/12/health/plan-would-delay-sales-of-generic-for-lipitor.html>.
Wilson, Duff. “Senators Question Deals to Block Generic Lipitor.” NYTimes.com. The New York Times, 1 Dec. 2011. Web. 2 Dec. 2011. <http://www.nytimes.com/2011/12/01/health/senators-question-plan-to-stall-generic-lipitor.html?_r=1>.