Pfizer's Lipitor New Strategy for Patent Expired

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  • Topic: Simvastatin, Generic drug, Statin
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  • Published : August 7, 2012
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行銷管理與顧客分析
2012/1/31

Pfizer’s Lipitor new strategy for patent expired

NTU EMBA 100B
Paul, Wai-Hou Chan
陳惠濠

Table of Contents

I. Introduction

II. About Lipitor (Atorvastatin)

III. Pfizer’s strategy

IV. Patients seem to benefit from Pfizer’s new strategy

V. Potentially profitable for retailers

VI. Pfizer after Lipitor

VII. Is Pfizer’s Lipitor strategy working?

VIII. Wholesaler Profits: Brand vs. Generic drug

IX. Pfizer is hoping to sell Lipitor to consumers over the counter (OTC)

X. Discussion

XI. References

Introduction

Lipitor (Atorvastatin), the best-selling prescription medication in the United States in

2010, earned more than $7 billion in total revenue. Lipitor’s patent expired in June

2011. Lipitor came on the market in 1997. According to CNBC (Consumer News and

Business Channel), it has yielded nearly $100 billion for Pfizer which represents

about a quarter of Pfizer’s total revenue over the past decade. When a drug’s patent

expires, the first generic company to file is usually granted a six-month period of

exclusivity to offer the generic version of the drug. Following the initial six-month

exclusivity period, additional generics companies are allowed to offer the drug and

the market quickly becomes commoditized. Typically, the exclusivity period results in

prices 25% below the original brand price, followed by continued price erosion to as

much as 80% or more as multiple generics enter the market. In the past, upon patent

expiration, the original drug maker would often raise the price of the brand to offset

some of the volume decline and usually shift commercial focus to its newer products.

Ultimately the brand would retain less than 10 percent of the market share by volume

(usually 3-5% after a few years). However, Pfizer has implemented a new, aggressive

post-patent strategy to maintain as much of the Lipitor market as possible. Pfizer is in

an effort to preserve the value of the Lipitor brand.

About Lipitor (Atorvastatin)

Atorvastatin was first synthesized in 1985, by Bruce Roth while working at Parke-

Davis Warner-Lambert Company (now Pfizer). It is marketed by Pfizer as a calcium

salt under the trade name Lipitor. Atorvastatin is a member of the drug class known as

statins, used for lowering blood cholesterol. Statins slow the liver's ability to produce

low-density lipoprotein cholesterol (LDL-C), often called bad cholesterol because it

can build up in blood vessels and lead to heart attacks and strokes. Atorvastatin also

stabilizes plaque and prevents strokes through anti-inflammatory and other

mechanisms. Like all statins, atorvastatin works by inhibiting HMG-CoA reductase,

an enzyme found in liver tissue that plays a key role in production of cholesterol in

the body. Lipitor was the top-selling branded pharmaceutical in the world. When

generic simvastatin entered the market in 2006, Zocor (Brand name of simvastatin)

had huge competition from Lipitor also. Zocor lost its market share in 2007. Another

new higher-potency statin Crestor (rosuvastatin marketed by Astra-Zeneca) entered

the market in 2003. Crestor has not been shown to be superior to Lipitor in reducing

risk and it is unlikely to have a large share of the market. In US, Lipitor, Crestor, and

generic simvastatin accounted for 77% of the statin market in 2009. Although U.S.

patent protection was scheduled to expire Lipitor in June 2011, Pfizer claims more

than one-third of its Lipitor patients prefer to stay on Lipitor.

Pfizer’s strategy

It includes:

A) Offering insured patients a discount card to get Lipitor for $4 a month, it is far

below the $25 average co-payment for a preferred brand-name drug and below the

$10 average co-payment for a generic drug. (Many pharmacy chains have

introduced “$4 generic drug”...
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