Alert
Close

We’re Giving Away $50,000! Enter Now. See Official Rules

HIGHLIGHTS

Open
AARP Staying Sharp: Keep Your Brain Healthy

AARP REALPAD

The tablet with free 24/7 customer support. Learn More

AARP VETERAN MEMBERSHIP

Military and Veterans Discount

CONTESTS AND SWEEPS

AARP’s Picture Your Retirement Sweepstakes

Enter the $50K Picture Your Retirement Sweepstakes. Ends 8/31/15. No purchase necessary. Enter for Official Rules.

KEEP BRAIN ACTIVE!

AARP Games - Play Now!

Learning Centers

Get smart strategies for managing health conditions.


Arthritis

Heart Disease

Diabetes

Most Popular

Viewed

As Lipitor Goes Off Patent, What Will Happen to Price of Your Prescription?

Pfizer strives to keep consumers, shut out generics

En español | The first generic version of the world's top-selling drug, the cholesterol-lowering Lipitor, is due to come on the market Dec. 1.

Sign up for AARP's Health Newsletter.

Drug market analysts have long speculated on the strategies Lipitor's manufacturer, Pfizer, might use to hold on to at least some of the profits for a blockbuster drug that has earned up to $12 billion a year over the past 15 years. But even experts were taken aback by the scale and ingenuity of the Pfizer counter-attack against generic competition. The drugmaker has launched an unprecedented campaign to persuade patients to stay with Lipitor instead of switching to the generic, atorvastatin.

Lipitor fights generic Lipitor for market share

Many blockbuster drugs are expected to lose patent protection over the next 12 months. — Image by R.O. Blechman

Typically, after a brand-name drug loses its patent, one other manufacturer gets six months to market a lower-cost generic copy exclusively — and prices it not far below the brand. After six months, other generic copies enter the market and prices plunge. Consequently, demand for the brand-name drug usually plunges, too. But Pfizer is trying to rewrite that playbook and keep Lipitor competitive — especially by making deals to block coverage of the new generic in some health plans.

That strategy was revealed in mid-November when three large pharmaceutical benefits management companies (PBMs), which act as middlemen negotiating prices between the drugmakers and insurance companies, told pharmacists that, from Dec. 1 through May 31, many of the health insurance plans they represent will cover brand-name Lipitor but not its generic.

"I was stunned," says Geoffrey Joyce, associate professor of pharmaceutical economics and policy at the University of Southern California. "I knew that Pfizer would be looking at ways to discourage consumers from using the generic. But blocking it completely seems like collusion between the manufacturer and large PBMs to prohibit a lower-cost drug."

Among other Pfizer strategies: setting up its own mail order pharmacy to sell Lipitor at generic prices to people in health insurance plans; offering discount cards to uninsured people; and launching a massive advertising campaign to promote brand loyalty, with the pitch: "If Lipitor is working for you, why switch?"

"This is not the first attempt by a manufacturer to extend the use and profitability of a brand drug past its patent expiration," says Joyce. "But clearly it's the most aggressive and multifaceted effort to date." The long-term strategy, he adds, is to get patients accustomed to using Lipitor "despite the availability of a generic."

How do such deals affect consumers? It depends on whether you're covered by an employer plan, or other private insurance plan, by a Medicare Part D drug plan, or you're not insured at all.

Next: Costs for people in private plans. >>

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Advertisement

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Walgreens 1 discount membership aarp

Members can earn 50 points per $1 spent on select health & wellness products at Walgreens.

member benefit aarp hear usa

Members save 15% on easy listening devices and more at the HearUSA Hearing Shop.

Eye Med 4 Membership Benefit AARP Discount

Members save up to 60% on eye exams and 30% on glasses at Target Optical.

Membership Benefits Discounts Email Genius

Brain boost? Get AARP email for access to memory exercises & more that help you focus.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points

Advertisement