By Vinay Singh
Three U.S. senators have sent letters to Pfizer (NYSE:PFE), pharmacy benefit managers, and insurance companies requesting information about agreements aimed at blocking sales of generic versions of its blockbuster cholesterol drug Lipitor in some cases.
Montana Democrat Max Baucus, Iowa Republican Chuck Grassley, and Wisconsin Democrat Herb Kohl expressed concerns that agreements between the drug giant and pharmacy benefit managers would undercut the sale of generic versions of Lipitor. The agreements came to light in a November 11 article in The New York Times.
“Consumers and taxpayers foot the bill when drug benefit companies and insurers manipulate the marketplace to prevent access to generic drugs,” says Kohl.
Pfizer has taken multiple steps to protect the market share of Lipitor from generic competition. The company’s loss of patent protection on Lipitor on November 30 opened Pfizer to new competition from generic drug makers offering their own version the statin, which is the best-selling drug of all time. Last year alone, Lipitor contributed $10.7 billion to Pfizer’s revenue. But in the short term, while genetic competition is limited, Pfizer is striking deals with pharmacy benefit managers that Bloomberg estimates may help the company retain as much as 40 percent of its Lipitor users and protect nearly $700 million in revenue. While Pfizer is seeking to protect its lucrative franchise, the senators are concerned that it is doing so at the expense of patients and taxpayers.
The senators’ letters requested that Pfizer, the benefit managers, and the insurance companies provide copies of all agreements between the companies, all documents and communications pertaining to the agreements and all presentations describing the agreements or contracts. The letters also requested that the documents be provided by no later than December 21, 2011.
In response to the letters from the senators, Pfizer said that its intent is to offer Lipitor to payers and patients at or below the cost of the generic versions during the 180 day period that Ranbaxy has an exclusive right to market the only generic rival to Lipitor. It told The New York Times that the lawmakers concerns were based on “incomplete or incorrect information.”
The senators worry that pharmacy benefit managers and insurance companies may charge health plan sponsors full price for the brand name Lipitor while retaining the discount from Pfizer. Kohl says he hopes the letters will bring scrutiny to the business practices and “will restore fairness and open the gates to affordable prescription drug choices and tremendous cost savings.”