US senators seek details of Pfizer Lipitor deals

Thu Dec 1, 2011 11:59am EST

* Senators say deals could push up health costs

* Give Dec. 21 deadline for details on arrangements

By David Morgan

WASHINGTON, Dec 1 (Reuters) - Three leading U.S. senators are inquiring into drugmaker Pfizer Inc's deals with pharmacy benefits companies to limit the sale of generic rivals to cholesterol drug Lipitor, which lost U.S. patent protection this week.

Pfizer reportedly agreed to give discounts to pharmacy benefits managers and health insurers on Lipitor provided they blocked prescriptions to the generic alternative.

The drugmaker denies it has imposed such conditions, but is offering discounts to these companies and patients as part of an aggressive marketing strategy to hold onto as much income as possible from the best-selling medicine of all time.

Lawmakers from three Senate oversight committees said the arrangements could lead to limited access to generic drugs and push up healthcare costs for medical patients and the government insurance programs Medicare and Medicaid.

"Without the prospect of true competition, generic drug manufacturers will be hesitant to invest the time and resources required to bring low-cost generic drugs to the market," they wrote in letters sent to Pfizer, Medco Health Solutions , Express Scripts , Catalyst RX , Coventry Health Care and UnitedHealth Group .

The lawmakers, Senate Finance Committee Chairman Max Baucus, a Democrat; Senate Aging Committee Chairman Herb Kohl, a Democrat and Senate Judiciary ranking Republican Charles Grassley, wield considerable influence over issues involving healthcare and industry competition.

Low-cost generic drugs are a key lever for controlling healthcare costs, which in recent years have eclipsed the pace of U.S. economic growth, inflation and household income.

The senators' request followed a Nov. 11 New York Times article that said Pfizer had reached deals to prevent Lipitor customers from having access to generics for the next six months, before additional competitors come onto the market.

"We are concerned that the (benefits management companies) may charge health plan sponsors, including employers and Medicare Part D, full price for brand name Lipitor from Dec. 1, 2011 through May 31, 2012, while pocketing the discount from Pfizer," the senators said.

The letter gives the companies until Dec. 21 to provide details of their agreements from wholesale costs to manufacturer discounts, consumer co-payments and the number of people affected, as well as presentations made to corporate officers including board directors.

"Our intent is to offer Lipitor to payors and patients at or below the cost of a generic" in the next six months, Pfizer said. "As a result, patients receive Lipitor at co-pays comparable to generics. Participation in Pfizer's programs by a health plan is entirely voluntary."

Express Scripts said in an emailed response to Reuters that it does recommend generic substitution for Lipitor when patients fill the subscription at retail pharmacies, but that the final decision rests with the client, such as employers, whose benefits it manages.

Express said that so far, just one of 2,100 clients has chosen to block filling retail prescriptions with generic Lipitor. It did not address its approach to generic Lipitor when filling prescriptions via mail-order.

Lipitor, which soared to become one of the biggest-selling drugs after its introduction in 1997, lost its patent protection on Wednesday. The U.S. Food and Drug Administration gave approval for the first generic version to Indian drugmaker Ranbaxy Laboratories Ltd . Pfizer is also selling a generic version of the drug, known chemically as atorvastatin, in partnership with Watson Pharmaceuticals .

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.