Lipitor Costs to Rise
October 8, 2005
Every pharmaceutical bubble eventually bursts, and Lipitor (atorvastatin) seems to be next in line, according to a report in BusinessWeek Online on 4 October.
Express Scripts Inc., one of the US's largest pharmacy-benefit managers, is recommending removal of Lipitor from clients' preferred-drug lists next year to promote Zocor (simvastatin), a rival cholesterol-lowering drug that becomes significantly cheaper in June 2006 when its patent protection expires.
This decision was made in August but not publicized at the time, according to St. Louis-based Express Scripts. Drugs listed on pharmacies' preferred-drug lists are attractive to consumers because they require lower co-payments than competitor drugs.
With revenues of $10.86 billion in 2004, Lipitor is the world's best-selling drug. With health benefit providers seeking ways to control spiraling drug costs, it remains to be seen whether the introduction of generic Zocor will significantly affect Lipitor sales.
Deutsche Bank analyst Barbara Ryan reported to BusinessWeek Online that she was "shocked by the move" because Lipitor is a better drug. "It seems pretty bold," she said. Ryan expects the move to affect Lipitor's sales, although she did not predict by how much.
"The availability of generic versions of Zocor in June 2006 provide an historic cost-savings opportunity for clients and patients," Express Scripts said in a statement, according to BusinessWeek Online.
Generic drugs are usually 50-60% cheaper than brand-name counterparts, according to BusinessWeek Online. Moreover, anti-cholesterol drugs constitute the US's top-selling drug class, accounting for 11% of all drug expenditures, says Express Scripts.
Last year's Zocor sales totaled $5.2 billion; brand-name drug revenues usually plummet when the associated generic drug is introduced.
"I don't think it will knock the floor out of Lipitor," Catherine Arnold, an analyst with Credit Suisse First Boston, reported to BusinessWeek Online.
Arnold said that the effect of generic Zocor on Lipitor sales will depend on how many providers adopt similar plans and how aggressively they promote generic Zocor. Medco Health Solutions Inc., another pharmacy-benefit manager, reportedly said it has no plans to remove Lipitor from its preferred-drug list. However, Wellpoint Inc. has been advising patients and doctors that generic Zocor is being released and have offered to suspend co-payments for people who use it for up to four months.
Arnold also noted that generic Zocor isn't Lipitor's only competition- Crestor (rosuvastatin; made by AstraZeneca PLC) and Vytorin (ezetimibe and simvastatin; made jointly by Merck & Co. and Schering Plough Corp.), are also vying for sales.
Pfizer Inc. had no immediate comment on the issue, according to BusinessWeek Online.
Source:
Express Scripts to raise cost for Lipitor, BusinessWeek
Online/Associated Press, 4 October 2005.
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