Lately, almost every day we've heard of a new Pfizer (NYS: PFE) strategy for hanging on to Lipitor sales after the drug faces generic competition. Discounts, co-pay cards, rebates, conversion to OTC -- the moves have been aggressive, but hardly groundbreaking ... until now. As TheWall Street Journal reports, Pfizer now intends to sell Lipitor directly to patients, and at prices to rival generics.
The drugmaker has teamed up with Diplomat Specialty Pharmacy, which will dispense Lipitor by mail and bill patients' insurance companies. Insurers that have a contract with Pfizer will pay about the same amount as they would for a generic, WSJ reports. Plans that haven't set up a contract with the drugmaker would pay more.
Now, this strategy is unorthodox, but then Lipitor has been no ordinary pill. With more than $10 billion in sales last year, the cholesterol fighter is the best-selling drug ever. It has the sort of brand recognition generally restricted to soft drinks and beer. Plus, the pharma market these days is far different than it was a decade ago. Once, drugmakers could afford to let big branded drugs succumb to generic competition, because other blockbusters were there to take their places. Now, that's not the case, Pfizer CEO Ian Read told the Journal.
"Previously, Big Pharma has tended to walk away" from off-patent meds, Read told the WSJ. "Now, we have a flat-out different culture."
Hence the arrangements with pharmacy benefits managers that give patients access to branded Lipitor at generic prices, the co-pay discounts that put a patient's share of the cost at Wal-Mart levels -- and now the direct-to-consumer access via mail order. The moves won't allow Pfizer to hold on to all of its Lipitor billions, but analysts figure the company could reap around 40% of previous sales, certainly during the first 6 months after exclusivity expires. Lipitor will face only one independent competitor during that period.
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