Update: Pfizer and Lipitor (Show me the money!)Posted: November 19, 2011
I posted a few days ago about Pfizer’s strategy for dealing with the upcoming loss of exclusivity for it blockbuster drug Lipitor. Well, there is more news on that front, this time concerning the Federal Trade Commission’s (FTC) interest in the deals Pfizer made with pharmacy benefit managers (PBMs).
As reported by Pharmalot, the FTC has started calling around, asking about the details of the contracts. It’s not an official investigation yet, but does show that the federal government is concerned that Pfizer is participating in anti-competitive practices. However, if you read the letters from the PBMs to pharmacies that were leaked, it does appear that Pfizer (through the use of discounts) is making the continued use of branded Lipitor the cheapest option out there. If you check out page three of the link, you’ll see that Catalyst Rx is being offered a 31% discount, which bring the cost of Lipitor for the insurance company to just under what generic Lipitor would cost in the first six months after the patent expires.
In addition, it appears that my guess that Medco was passing on all of the discount to the insurance provider was correct. Coventry (which relies on Medco to manage its pharmacy benefits) had this to say…
A Coventry spokesman confirms the deal was cut directly with Pfizer. “Most of Coventry’s fully-insured members will save money on Lipitor when we pass on the savings by lowering their pharmacy co-pay to the amount they would pay for the generic. We think our members will appreciate the change and lower co-pays, but it also reduces our bottom-line cost of Lipitor, which helps Coventry keep coverage more affordable.” He declined, though, to offer any specifics.
So it would appear that Pfizer is isn’t doing anything underhanded at all. They are providing discounts which makes Lipitor the lowest cost option, even after generic become available.
However, the question remains, why is Pfizer doing this? Is it simply to cash in on another 6 months of Lipitor profit (albeit at a lower margin and smaller overall market)? That could be, but I would guess that this the first stage of a multistage strategy to keep Lipitor profits flowing (or at least a significant portion of them).
As I mentioned in my previous post, keep an eye out in the next 3-4 months for news about Lipitor and Pfizer. If there is a long-term plan involved, Pfizer should start rolling out the next stage soon.