Pfizerâ€™s cholesterol drug, Lipitor (atorvastatin), is going generic December 1st and Pfizer and some pharmacy benefit managers (PBMs), such as Medco Health Solutions, are colluding on how to block Lipitor generics from being sold. The changeover is considered, said The New York Times, history making.
According to letters sent to pharmacists, Pfizer, Medco, and others are asking that sales of generic Lipitor be blocked for at least six months and that pharmacists continue to fill prescriptions with the costlier Lipitor brand, said The Times. Pfizer agreed to significant discounts for those benefit managers that block generic Lipitor, said a letter from benefit manager Catalyst Rx, wrote The Times. PBMs liaise between the drug companies selling medications and the insurers and employers, which sponsor and buy plans.
Some pharmacists, unhappy about the deals, point out that Pfizer and the PBMs will reap benefits while employers and taxpayers must continue to pay for the brand name, said FiercePharma. Pharmacists United for Truth and Transparency, a trade association of 600 independent pharmacists, described the deal as a “blatant attempt” to “retain rebate dollars” from Pfizer, according to Bloomberg News. The generic blocking deal also calls for payments for generic Lipitor to be blocked, noted FiercePharma.
Legally, once a drug patent expires, only limited generic competition is allowed in the first six months, after that, full generic release is permitted. In this case, the generic block will lifted on May 31, at which time prices for the drug will drop, Lipitorâ€™s co-payment will rise, and drugstores will be advised to fill prescriptions for Lipitor with less costly generics, said The Times, citing a letter from Catalyst Rx.
The move, according to one pharmacy group and an independent expert, will benefit the drug maker and benefit managers. Not unexpectedly, employers and taxpayers will bear the brunt by paying more for the drug, explained the Times. â€œIâ€™m stunned,â€ said Geoffrey F. Joyce, an associate professor of pharmaceutical economics and a health policy expert at the University of Southern California, who reviewed the letters, according to The Times. â€œThis is just an egregious case. Clearly thereâ€™s been some negotiation between Pfizer and the large PBMs saying weâ€™re going to make this cost-beneficial to them, but the plan sponsors are going to eat it,â€ Joyce added, wrote The Times.
The deals have been described as â€œaggressiveâ€ by FiercePharma, with large discounts being swapped for restricted access to Lipitor generics. People taking Lipitor after November 30, should expect a lowered co-payâ€”$10 for 30 days, said one of the letters. The Times pointed out that todayâ€™s Lipitor co-payment is at least $25. But, when a patient submits a prescription for a generic version of the drug, they will be given the brand version, said The Times. Lipitor, with sales exceeding $106 billion in the past 10 years, accounts for nearly 25 percent of Pfizerâ€™s business.
Watson Pharmaceuticals is making a generic version of Lipitor that has been authorized by Pfizer as part of a profit-sharing agreement and Ranbaxy Laboratories of India, pending federal approval, is gearing up to sell its generic version, said The Times. “While the Lipitor co-pay will drop on November 30, the full price to plan sponsors will stay the same,” a Medco group spokesman said, wrote FiercePharma. “That means plan sponsors will be forced to pay more for brand Lipitor even though a low cost generic is available,” he added. Paul Bisaro, CEO of Watson Pharmaceuticals, told the Times that the arrangements will raise healthcare costs. “It’s not a good event,” he told The Times. “And consumers are going to be confused. They’re not going to understand why they can’t get a generic,” Bisaro added.