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

Pfizer strives to keep consumers, shut out generics

People in employer plans

Notices recently sent to pharmacists by the three big middlemen companies — Medco, Medimpact and Catalyst Rx — show that at least some of their client insurers will reduce copays for Lipitor to the level of a generic drug, perhaps about $10 or less for a 30-day supply, compared with a $25 or more copay now. That sounds like a good deal for patients —and certainly millions are likely see their Lipitor costs fall. But, critics say, if health plans still pay the full cost of the drug, there would be two consequences.

Lipitor pills- prescription drug prices and generics

Lipitor users hope that a generic alternative will reduce their drug costs. — Photo by Photo Researchers/Getty Images

First, enrollees in plans that charge a percentage of the drug's cost, instead of a flat dollar copay, will pay a higher amount, according to the Medco notice. For example, if a 30-day supply of Lipitor costs the plan $160 and the plan charges 25 percent to enrollees, they would still pay $40 compared with the lower $10 or less.

Second, if an employer plan doesn't receive the full rebate for Lipitor from its benefits management company, its costs would be higher than if it were covering the generic. In that case, the deal becomes a money-loser for the plan and enrollees will ultimately pay, says Dave Marley, an independent pharmacist in Winston-Salem, N.C. "Anything that increases the employer's expenses, you can be sure that next year the premiums, deductibles and copays will go up." Marley is the founder and a member of Pharmacists United for Truth and Transparency, a new association that opposes what it calls the behind-the-scenes role of PBMs in fueling escalating drug costs. His group first broke the news of the Lipitor deal by sending copies of the three notices to the press.

Typically, the pharmaceutical middlemen make money out of rebates and do not necessarily pass on those savings to the insurance plans, says Stephen Schondelmeyer of the University of Minnesota, a national expert on drug pricing.

Medco told Pharmacy Times that its notice applied only to one client, Coventry Health Care, a plan with 1.2 million enrollees, and that Medco would not keep any rebate dollars from Pfizer.

In another unprecedented move, Pfizer also has set up a partnership with a large mail-order pharmacy to fill patients' Lipitor prescriptions. Health plans that have contracted with Pfizer to use this pharmacy would pay a generic-level price for Lipitor, while those that haven't will pay more, according to a Wall Street Journal report.

Next: Costs for people on Medicare. >>

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