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New coupons aim to keep people off generic drugs
Question of the Day
Lipitor’s U.S. patent was set to expire at the end of November, and everyone expected its sales to plunge immediately. So well before then, Pfizer began offering coupons giving patients $50 off each Lipitor prescription in hopes of keeping many of them loyal.
Pfizer also signed unprecedented deals with dozens of insurers that reduced their portion of the cost of Lipitor to what a generic would cost them _ if they covered only branded Lipitor for six months.
That meant both patients and insurers had a big financial incentive to stick with Lipitor for a while.
On Nov. 30, two slightly cheaper generic versions hit pharmacies, one from India’s Ranbaxy Laboratories and an “authorized generic.” That pill is manufactured by Pfizer and sold by its partner, generic drugmaker Watson Pharmaceuticals Inc., of Parsippany, N.J.
Pfizer’s strategy worked. The “Lipitor For You” program, which includes support such as lifestyle coaching, health tips and heart-healthy recipes, signed up more than 750,000 people.
“We never expected that,” said Albert Bourla, head of the Pfizer unit that sells off-patent medicines.
Data from IMS Health show generics grabbed about two-thirds of Lipitor’s prescriptions within five months _ a big loss but far less than what would have happened without the coupon program.
“What Pfizer did was something amazing,” says Praful Mehta, senior health care analyst at industry consultant IHS Global Insights in London. By courting patients and accepting lower profit margins, “they made sure they kept their revenue.”
On May 30, three more generic Lipitor versions hit U.S. pharmacies. Prices for all the generics plunged overnight to around $15 a month. Pfizer then ended its subsidies to insurers because it would be too costly to make up the difference between that amount and the $175 price of Lipitor.
But the company hasn’t given up on retaining some patients.
Pfizer extended Lipitor For You through December 2014 and raised its maximum subsidy from $50 to $75 per month. That means most insured patients using the coupons still can get Lipitor for less than their monthly copay for a generic drug, unless their insurer charges that extra fee to make up the difference between the brand and generic costs.
By the end of June, about 85 percent of Lipitor users had defected to a generic. Without the coupons, nearly all would have done so. Read, the Pfizer CEO, said the company maintained three times the usual market share after generics hit.
Because pills generally cost only a dime or so to make, Pfizer still profited. It reported about $300 million in U.S. Lipitor sales in the second quarter, down from $1.2 billion a year earlier, plus another $1.1 billion in sales in other countries
Pfizer now offers $4 co-pay coupons for five other drugs: breast cancer pill Aromasin, antidepressant Effexor XR, bipolar disorder treatment Geodon, Revatio for high blood pressure and Caduet, which combines Lipitor with blood pressure medicine Norvasc.
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