Lipitor patent ends; generic available: What now?

Lipitor is the most prescribed name-brand drug in America — nearly 3.5 million people take it every day to control their cholesterol. Since the statin entered the market in 1997, it’s earned New York-based pharmaceutical giant Pfizer Inc. $81 billion, making it the best-selling prescription drug of all time, according to IMS Health, a Danbury, Conn.-based healthcare information company.

So when Lipitor’s patent protection came to an end Nov. 30 and a generic alternative became available, an awful lot of patients had a decision to make: Should they stick with the drug they knew or switch to something less expensive?

But a funny thing happened on the way to the pharmacy.

In a concerted effort to hang on to its customers, Pfizer cut deals with insurers and with companies that process prescriptions as part of an elaborate effort to keep Lipitor available at prices that are just as cheap as — or even cheaper than — the generic competition. The company has also appealed directly to patients to stick with the brand instead of switching to generic atorvastatin with a program that makes Lipitor available for as little as $4 for a 30-day supply.

It was an unprecedented effort, but the motivation was clear: When a drug loses its patent protection, more than 80% of its prescription sales are replaced by generics within six months, according to IMS.

Usually when a drug goes off patent, patients are forced by their insurance companies to switch to generics they may not want; in this case, consumers who want generic Lipitor may not be able to get it.

Here’s a guide to what’s going on with the blockbuster drug.

Is atorvastatin as good as Lipitor?

The expectation is that the generic will be just as effective as the name-brand drug.

But contrary to popular belief, generics aren’t identical to brand-name drugs, says pharmacologist Joe Graedon, co-creator of the consumer health column the People’s Pharmacy. In fact, he says his website has become a magnet for reporting problems with generic drugs, which occur for three main reasons: the contents of a generic’s inactive ingredients are usually different from those found in the brand-name drug; uninspected foreign manufacturing plants sometimes produce contaminated chemicals; and generics can be released into the bloodstream differently from how it acts in the brand-name version.

Graedon says Lipitor’s release mechanism is not unique, and he doesn’t anticipate trouble with atorvastatin.

Besides, Lipitor may not be much different from a variety of other statins that already are sold as generics, says Dr. John Santa, director of health ratings for the nonprofit Consumer Reports. Generic statins — the class of cholesterol-lowering drugs to which Lipitor belongs — are just as good for 95 out of 100 people, Santa says. These include lovastatin (Mevacor), pravastatin (Pravachol) and simvastatin (Zocor).

In fact, Pfizer’s incredible success with Lipitor may primarily be a function of the company’s marketing brilliance, Santa says. “Pfizer was able to convince millions of Americans to ignore less expensive and just as effective drugs,” he says.

My doctor wrote me a prescription for atorvastatin, but I was given Lipitor instead. Why can’t I get the generic?

It’s because of the deals Pfizer has made with insurance companies and pharmacy benefit managers, which negotiate drug prices for insurers.

Normally, one drug maker gets exclusive rights to make the low-cost generic version of a medication for the first six months after it goes off patent. After that, additional generic drug makers enter the market, causing prices to drop even further. At that point, demand for the brand-name drug all but disappears.

But Pfizer is trying to rewrite that story. It agreed to pay rebates to insurers and pharmacy benefit managers (PBMs) to eliminate the cost advantage of atorvastatin. In return, some of the companies are offering only Lipitor.

Pfizer spokesman MacKay Jimeson says the deals allow patients to get the brand-name medicine at generic prices. It seems to be working. According to the Dutch business intelligence firm Wolters Kluwer Pharma Solutions, Pfizer has managed to hold on to about 57% of all retail Lipitor sales since Dec. 1.

That sounds sneaky. Is it legal?

No laws that govern how generics enter the market have been broken, says Erik Gordon, an attorney and professor at the University of Michigan’s Ross School of Business. But Pfizer’s actions do raise questions about whether antitrust laws, which aim to keep market competition fair, have been violated, Gordon says.

What’s tricky is that Pfizer, the biggest drug maker in the world, seems to be using its muscle to make deals with the aim of undercutting the sale of generic Lipitor and limiting consumers’ access to it, Gordon says.

He isn’t alone with his concerns. Sens. Max Baucus (D-Mont.), Charles E. Grassley (R-Iowa) and Herb Kohl (D-Wis.) have sent letters to Pfizer and five healthcare companies that made deals with Pfizer, asking them to outline the nature of their contracts. In the letter, dated Dec. 1, the senators expressed concern over the arrangements and whether they would “hinder access to generic drugs today and in the future.”

Pfizer says there’s no arm-twisting going on here — it simply made its drug available at prices the market demanded. “We made a very competitive offer,” Jimeson says. “A number of insurers and PBMs agreed and signed contracts with us, and some didn’t.”

Is it normal for drug companies to do this kind of thing?

Drug makers have a long history of using rebates to influence PBMs and insurance plans as they decide which medications to cover, says Timothy Wentworth, group president of employer accounts with Medco Health Solutions, a large pharmacy benefit manager. What makes this situation unusual is that Pfizer’s rebates are helping to make a brand-name drug cheaper than a generic. Normally, rebates give an edge to one of two comparable drugs in the same therapeutic class.

Offering money to companies that agree to reject prescriptions for atorvastatin and dispense Lipitor instead is a tactic that has surprised many people, including Gordon.

But not Dave Marley, president and founder of the advocacy group Pharmacists United for Truth and Transparency. Marley says this practice has been in play for years and prompted insurers such as Cigna, Community Care Rx, Coventry and AARP to reject generic prescriptions for brand-name drugs, including Zyprexa (used to treat schizophrenia and bipolar disorder), Nitro-Dur (to prevent chest pain) and Protonix (for gastroesophageal reflux disease, or GERD).

Terri Bernacchi, director of the Managed Markets Services Practice for IMS Health, agrees with Marley. All the attention being paid to Lipitor has more to do with the fact that, as the biggest-selling name-brand prescription drug of all time, it has a higher profile than others that have lost patent protection, she says.

What else is Pfizer doing to keep patients on Lipitor?

The company is offering discounts to patients through its Lipitor for You program, bringing the drug’s monthly co-pay to as little as $4. Under the program, Pfizer pays up to $50 to make up the difference between the $4 minimum and a patient’s usual co-pay for a preferred brand-name drug, which is $25 on average.

Patients can enroll in Lipitor for You at https://www.lipitor.com (select “For Lipitor Patients,” then click on “Lipitor for You”) or by calling (866) 3-LIPITOR. According to Jimeson, the deal is good through the end of 2012.

The company has also set up a mail-order pharmacy to sell Lipitor at generic prices to patients with health insurance, and it’s paying pharmacies to provide counseling services about Lipitor and the drug’s benefits.

What if I don’t have health insurance?

You can buy atorvastatin. Prices vary by pharmacy, but a 30-day supply of 20-milligram pills will range from $80 to $130.

Uninsured patients may take part in Lipitor for You and save $50 on the brand-name drug. With a price tag of roughly $165 a month for a 30-day supply of either 20 mg or 40 mg pills, that may make Lipitor the less expensive option.

I don’t want Lipitor. I want the generic. Can I get it?

It really depends on the arrangements your insurance company has made.

UnitedHealthcare, for example, says it covers both Lipitor and atorvastatin. However, Lipitor will be cheaper for members at the pharmacy.

Aetna, on the other hand, declined to participate in Pfizer’s rebate program and is requiring most members to switch to the generic. (The company will continue dispensing Lipitor for its Medicare plans but at the generic-level co-pay.)

Bottom line: There are many arrangements out there. Ask your insurer what’s available to you and how much it’s going to cost.

If my generic prescription is filled with brand-name Lipitor, does that mean I’ll pay more?

If your insurer has cut a deal with Pfizer, you’ll get Lipitor with a generic co-pay — about $10 for a 30-day supply, on average. For many patients, that amounts to a price cut. You may be able to reduce your costs even further with Lipitor for You.

What if I’m on Medicare?

A number of pharmacy benefit managers and health plans have said they’ll continue to dispense brand-name Lipitor but charge a generic co-pay to people with a Medicare Part D prescription drug plan.

But these patients may still be hit with higher drug costs in the long run, Marley says. Here’s why: People with Part D plans will hit the so-called doughnut hole after accumulating $2,930 in drug costs this year; after that, their drug costs go up. When these patients get Lipitor, the drug’s full cost is added to their tally. So even if they see an immediate discount on their prescription with a lower co-pay, they’re still getting to the doughnut hole faster.

Medicare Part D plans are supposed to report the rebates they get from drug makers to the government so that the Medicare program and its beneficiaries see cost savings as well. But a March 2011 report by the Office of the Inspector General reviewed six Part D plan sponsors that received rebates when they encouraged patients to use certain drugs. The findings: Some plans passed along the rebate money they were paid by PBMs, but others did not. Those that didn’t could be costing the government and beneficiaries more money.

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