UPDATE 3-Lipitor generics reach Canada, Pfizer vows fight

* Apotex, Teva, Watson launch Lipitor generics in Canada

* Pfizer says will launch own generic (Adds Teva, Watson launches, analyst comment)

TORONTO/NEW YORK, May 19 (Reuters) - Generic forms of Pfizer Inc's PFE.N blockbuster Lipitor cholesterol fighter began flooding into Canada on Wednesday, in a taste of what is to come for the $12 billion-a-year drug next year in the United States.

Privately-held Canadian drugmaker Apotex Inc and Israel's Teva Pharmaceutical Industries Ltd TEVA.TA rolled out their products in Canada after they were approved earlier on Wednesday by Health Canada. Helped by lower prices, they aim to wrest away business from Lipitor, which had Canadian sales last year of more than $1.1 billion.

Watson Pharmaceutical Inc WPI.N later on Wednesday said it too received authorization to sell generic Lipitor in Canada and has begun shipping the product.

Lipitor is the world’s biggest-selling drug, and the first Canadian generics set the stage for far more punishing competition in the United States by November 2011, when Lipitor’s U.S. marketing exclusivity lapses.

Apotex, which is based in Toronto, said it was able to overcome the various patents on Lipitor by creating its own crystal form of the treatment, to be marketed immediately under the name of Apo-Atorvastatin.

Pfizer, which has a unit that makes generic medicines, said it would not be surprised if a half-dozen Lipitor generics soon wind up on the Canadian market, and that it aims to challenge them with its own discounted product.

“We’ll be offering alternative versions of atorvastatin,” Pfizer spokeswoman Sally Beatty said, referring to the active ingredient and generic name of Lipitor. She declined to say when Pfizer’s own generic would be introduced, or how competitive its cost would be to the copycats.

In an effort to keep a share of sales once a branded drug goes off patent, most drugmakers sell cheaper versions of their own medicines, known as authorized generics.

Pfizer has authorized generics of its once big-selling blood pressure medicine Norvasc and the anti-seizure medicine Neurontin, among others.

“As expected, we lost Pfizer exclusivity of Lipitor in Canada,” Beatty said, noting that Pfizer’s 2010 earnings forecast assumed generic competition this year in Canada.

Pfizer said Lipitor’s market exclusivity in Canada officially lapses on July 19.

But Beatty noted that Apotex and Pfizer reached an agreement two years ago, after an earlier patent battle. The agreement, whose terms have not been made public, paved the way for the generic launch.

She declined to comment on whether Pfizer was concerned about the cheaper copycats being illegally imported into the United States. In the past, some Americans have used mail order pharmacies in Canada and other countries to get drugs at cheaper prices.

But Deutsche Bank analyst Barbara Ryan expressed doubt that illegal importation would pose a big problem for Pfizer.

“Seniors have a low co-pay for Lipitor, so sending for it would probably cost more,” Ryan said.

Introduction of the new generics in Canada come at a time when government officials are looking for ways to cut mounting healthcare costs.

Last month, the government of Ontario, Canada’s most populated province, announced a comprehensive plan aimed at cutting generic drug prices.

The province’s plan aims to reduce its annual tab of more than $750 million for drugs covered under its benefit program. It would also reduce prices consumers pay for generics, and lower revenues for drugstores.

However, it has since delayed its mid-May implementation of the plan following a backlash from the public and the big drugstore chains like Shoppers Drug Mart Corp SC.TO.

Pfizer shares closed unchanged on the New York Stock Exchange. ($1=$1.05 Canadian) (Additional reporting by Bill Berkrot)