Lipitor makes way for generics
Share Now on:
Lipitor makes way for generics
Kai Ryssdal: You’ve heard the phrase “blockbuster drug,” right? If not, allow me to introduce you to the finances of the anti-cholesterol drug Lipitor. Since it went on the market in 1997, Lipitor’s brought in more than $81 billion for Pfizer, the company that sells it. And if you’re one of the nine million people who uses it, the days of your high co-pays will soon be over. Pfizer has done everything it can to postpone the inevitable, but Lipitor goes out of patent protection on Thursday. The bestselling drug of all time will be available as a generic.
From the Marketplace Health Desk at WHYY, Gregory Warner looks back and asks, “What took so long?”
Gregory Warner: Lipitor was supposed to go off patent in March of 2010. That was extended to July of this year. Now it’s Thursday, Dec. 1 — for real, this time. But what took so long?
The expiration date on a drug patent isn’t like the one on a carton of milk. Most drugs have multiple patents, and each one has to be resolved in court before a generic can move in. It’s an epic battle of the briefcases.
Tonianne Bongiovanni: I can’t even get these folks to agree on whether or not they have a mother.
Tonianne Bongiovanni, ex-cop, is now a federal judge in New Jersey patent court. By ‘folks,’ she means the lawyers representing the brand drug companies like Pfizer and those representing generics.
Bongiovanni: Everything is to the death. You’d think they were all Sicilian, which is my heritage.
‘To the death’ because the stakes are so high. Imagine you’re Pfizer. Every extra day you can extend your patent protection on Lipitor means another $10 million. Of course you’re going to lawyer up. But if you’re the generic company and you successfully take down the drug patent — you rule.
Teresa Rea: Sort of king of the mountain of all the generic companies.
Teresa Rea is now deputy director of the U.S. Patent Office — she was a private patent attorney when we did this interview. By ‘king,’ she means you get to be the only generic on the market for the next six months.
Rea: Because you spent the time and the money challenging the brand holder’s patent and position.
This is the government policy, set up in the 1980s, to bring us lower drug prices. It gives financial incentives to the generic company to go and do battle with the brands and make our drug prices lower.
At least that’s how it’s supposed to work. But when there’s profit, even sworn enemies can make friends. Remember that scene in “The Godfather” when Don Corleone calls a truce between the five families?
Don Corelone, “The Godfather”: And as a reasonable man I’m willing to do whatever’s necessary to find a peaceful solution to these problems.
In 2008 — three years before Lipitor was scheduled to go off patent — Pfizer made a deal with its generic challenger, the Indian company Ranbaxy. Deal was this: Pfizer would keep selling brand Lipitor for an extra five months, until December instead of July. Pfizer would essentially pay Ranbaxy to hold off. Telling them — ‘don’t be king just yet. We’ll make it worth your while.’
Marcus Meier: That’s why it’s called pay for delay.
Marcus Meier is with the health care antitrust division of the FTC. He says both brand companies and generics love these deals.
Meier: They’re both better off than under competition. The generic can actually make more settling litigation in some instances than it can entering the market.
But we pay more. The Government Accountability Office estimates that pay for delay deals will increase health costs by $500 million a year in the next decade, as so many blockbusters attempt to stave off their expiration dates. When that finally fails, some drug makers may just join the competition.
On Thursday, Pfizer will lower the price of Lipitor to generic levels. It might have lost its patent protection, but there’s all that Lipitor brand loyalty to cash in on.
I’m Gregory Warner for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
