Will Pfizer Strategy On Lipitor Become The Norm?

Remember Twisted Sister’s song – We’re Not Going To Take It Anymore?

That’ seems like a good summary of the Pfizer response to the typical market dynamics around patent expiration.

Here’s a summary of what they’re doing:

  1. Pfizer is striking deals with PBMs to offer them brand Lipitor at a lower cost (net of rebate) than the generic drugs which are coming to market during the exclusivity period.
  2. Pfizer is continuing to offer their $4 coupon for brand Lipitor direct-to-consumers.
  3. Pfizer is continuing to advertise Lipitor and talking about “if Lipitor has been working for you, stay with it”.
  4. Pfizer is partnering with Diplomat Pharmacy to sell Lipitor directly to the consumer through mail order.
  5. Pfizer is offering pharmacies additional services around adherence for helping keep patients on Lipitor.

Here’s some key questions on implications:

  1. If I’m the authorized generic, how do I feel? I thought I had a deal by which I was bringing a drug to market and making some money during the exclusivity period. Will this change the way that authorized generic deals get structured?
  2. If I’m the generic manufacturer that has the 180-day exclusivity, how do I feel? I’ve just lost a lot of my opportunity. Will this change the economics of generic manufacturers? I believe most of their profit is made during the exclusivity period.
  3. Will other brand manufacturers follow suit on other patent expirations?
  4. Will the PBM response to couponing intensify with their push into couponing when there is a multi-source generic available?
  5. Will this serve as a bridge until they can get OTC Lipitor approved? And, will that ever happen?
  6. How does this affect retailers who make more money on the generics and won’t see the increased rebate dollars?
  7. For PBM clients that get rebate dollars shared with them, these deals with Pfizer are probably a win (i.e., lower cost). What about those clients that don’t? How are they being made whole? What about clients of clients (i.e., employers who contract with a TPA or MCO who gets the rebates but doesn’t share them)?
  8. How hard does it become to transition patients off Lipitor when Pfizer stops offering the increased rebates or lower cost?

This could be a game changing moment in the industry. We’ve seen lots of shifts, and I would add this as a new phase in the industry.

  • 1.0 = Traditional focus on MDs and heavy use of people to detail physicians.
  • 2.0 = Shift to DTC advertising still supported with detail reps.
  • 3.0 = Increased power of PBMs and focus on rebating and formulary positioning.
  • 4.0 = Rise of generics and shift to specialty.
  • 5.0 = DTC couponing and broader disease centric strategies.
  • 6.0 = New business models??

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