Pfizer Inc. and several insurance companies and pharmacy benefit management firms have been asked by three U.S. Senators to provide details regarding deals that were struck to block generic prescriptions in favor of Lipitor. The deals are part of Pfizer’s strategy to preserve its Lipitor profits, after its patent expired earlier this week.
As we reported previously, Lipitor accounts for nearly a quarter of Pfizer’s sales every year. But with two generics now available for sale, and more likely to hit the market after six months, Lipitor sales are expected to take a hit. To head off the sales drop, Pfizer has struck some unique deals aimed at preserving Lipitor market share. Under some of the agreements, Pfizer has offered discounts to pharmacy benefit managers and insurers that have agreed to reject generic prescriptions and substitute Lipitor.
While the discounts Pfizer offered will help the pharmacy benefit management companies and insurers save money on Lipitor, it’s not clear if those savings will be passed along to plan sponsors – i.e. employers and others who pay for health insurance plans. It’s also not clear about the impact the deals will have on the taxpayer-sponsored insurance plans, Medicare and Medicaid.
The uncertainty has three U.S. Senators – Max Baucus, a Montana Democrat and Chairman of the Finance Committee; Charles E. Grassley of Iowa, the Committee’s ranking Republican; and Herb Kohl, the Wisconsin Democrat who is chairman of the Special Committee on Aging – concerned. According to a report from The New York Times, the Senators have written to Pfizer and five companies that are parties to Lipitor agreements for details about the accords.
“We need to take a close look to ensure we’re protecting both taxpayer dollars and access to the medicine patients need,” Senator Baucus said in a statement released with the senators’ letters.
The letters express concern that the discounts Pfizer is giving the companies might not be passed on to Medicare and Medicaid, the Times said. They also express worries that Pfizer’s tactics will hinder access to generic drugs, especially if they are adopted by other drug makers to protect sales of their name brand medications.
In addition to Pfizer, the Senators sent their letter to the insurance companies UnitedHealthcare and Coventry Health Care; and the pharmacy benefit management companies Express Scripts, Medco Health Solutions and Catalyst Rx.
According to the Times, Medco and Express Scripts have said they won’t block generic Lipitor prescriptions because doing so will cost more over the long-run, even with Pfizer’s discount. However, the companies are buying Lipitor at the generic price for their mail order operations.
United, Coventry and Catalyst have said the Pfizer discount will save them money until more generics enter the market in June, according to the Times.