Pfizer keep's Lipitor for awhile longer

Jun/19/2008 05:35
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Pfizer managed to add another $5 billion to their bottom line yesterday by announcing that they have reached agreement with a generic company to end litigation over patent disputes. The agreement still has to be reviewed by the the FTC which has taken a hard look at anything involving drug companies but if it stands Lipitor will not be generic here in the US until 2011.

It takes a lot of money to develop drugs today..$650 million, $700 million, and a lot of drugs don’t make it to the market. The current business model for pharma includes a period of “patent protection” so that the bean counters can estimate the total ROI for the product and determine, i the overall mix of products, how much the company can fund expenses and investment.

Pfizer settled global patent disputes with Ranbaxy Laboratories, a generic drug maker in India that had threatened to market its own version of Lipitor. The agreement allows Ranbaxy to market generic versions in small countries and a generic version here in the US in November 2011. By delaying Ranbaxy’s generic version of Lipitor, which might have been sold as early as March 2010, Pfizer has won extra time for exclusive sales of Lipitor, potentially totaling billions of additional dollars. Lipitor’s current price can exceed $3 a day, while a generic version might eventually sell for well below $1.

As part of the agreement, Pfizer granted licenses to Ranbaxy authorizing the company to sell generic Lipitor in seven other important pharmaceutical markets: Australia, Canada, Belgium, Germany, Italy, the Netherlands and Sweden. Although both companies said the agreement did not involve any payments Pfizer dropped its challenge to Ranbaxy’s current sale of a generic Lipitor in four other countries — Brunei, Malaysia, Peru and Vietnam — allowing those sales to continue. The F.T.C. has argued that such arrangements, called reverse payments, harm the public by inflating drug prices and the agency has challenged them in court, with mixed results.

Unless Pfizer comes up with another blockbuster in short order all they have done is to delay the inevitable. Analysts are saying that Pfizer’s pipeline does “not look promising” and Chantix has come under increased scrutiny as the media zeros in on the potentially negative side effects.

So it will come down to a decision by the FTC to determine whether the deal struck by Pfizer and Ranbaxy stands or if drug companies now have to figure in early patent challenges as part of their business plans. Maybe the government should just take over all pharmaceutical companies if they want socialized medicine with cheap drugs? Until that happens pharma companies are part of the capitalist system and have a right to make money selling products to recoup their investments. If the trend of patent challenges continue pharma may just pass on marketing some drugs because the risk of early patent expiration is just too high and that is a loss for consumers and patients.





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