New Report Examines Efforts to Reduce the Impact of Generic Competition for Popular Drug Lipitor

 New Report Examines Efforts to Reduce the Impact of Generic Competition for
                             Popular Drug Lipitor

Harmful strategies increase health care costs, hurt consumers

PR Newswire

WASHINGTON, June 13, 2013

WASHINGTON, June 13, 2013 /PRNewswire-USNewswire/ --Today, AARP's Public
Policy Institute released a new Rx Price Watch report examining efforts by
Pfizer to reduce the impact of generic competition for the popular
anti-cholesterol drug Lipitor. The report breaks down the unusually aggressive
strategy reportedly undertaken by Lipitor's manufacturer before and after the
drug's patent expired and discusses how the effort could become a model for
other brand name drug manufacturers facing generic competition, ultimately
increasing costs for consumers and publicly-funded programs like Medicare and


Pfizer reportedly employed a variety of tactics in an effort to retain
Lipitor's revenue and market share, which had already been on the market for
14 years with a patent protected monopoly. These tactics included a
"pay-for-delay" agreement, when a brand-name drug manufacturer pays a generic
competitor to hold its competing product off the market for a certain period
of time. The Federal Trade Commission estimates the increasing number of
"pay-for-delay" agreements in recent years costs the American public an
estimated $3.5 billion due to delayed price competition from other generic
drugs. (These agreements are the focus of a soon-to-be-decided Supreme Court
case FTC v. Watson Pharmaceuticals, et al.)

Further, Pfizer reportedly offered rebates to insurance plans and pharmacy
benefit managers (PBMs). These rebates reduced the cost of Lipitor to less
than the cost of the generic version of Lipitor (known as atorvastatin sodium)
and in exchange, insurance plans and PBMs rejected atorvastatin claims for six
months, effectively preventing pharmacists from dispensing the generic drug.
Additionally, patients were offered a generic-level copayment.

"Strategies that hinder competition, like those reportedly employed by Pfizer,
are harmful to consumers and all payers responsible for purchasing
prescription drugs," said Debra Whitman, AARP Executive Vice President for
Policy, Strategy and International Affairs. "We're hopeful these strategies
are not a model for the future."

The report also highlights a dramatic increase in the price of Lipitor in the
years immediately prior to its patent expiration. Between December 2006 and
December 2011, the average annual retail cost of therapy for Lipitor 20 mg
tablets increased by 50 percent from $1,290 to $1,939. In 2011, the year its
patent expired, Lipitor's average annual retail price increase was 17.5
percent – more than four times the average annual retail price increase from
2006 to 2009.

"The rising cost of prescription drugs remains a real challenge for consumers,
particularly older Americans. These price increases can result in higher
out-of-pocket costs or even lead a person to stop taking a needed medication,"
continued Whitman. "Rising drug prices also increase spending in government
programs like Medicare and Medicaid, and as spending increases so does the
cost burden shouldered by beneficiaries and taxpayers."

AARP continues tourgeCongress to help lower prescription drug costs by
creating more competition in the marketplace. The Association has
calledforimproving the pathway to approval of generic biologic drugs,
reducing the exclusivity period for biologics, offering rebates for drugs
dispensed to low-income Medicare beneficiaries and allowing Medicare to
negotiate prescription drug prices directly with drug manufacturers. AARP is
alsoadvocating to end pay-for-delay agreements andfiled an amicus brief in
the Supreme Court caseFTC. v. Watson Pharmaceuticals, et al.

The full PPI Rx Price Watch case study is available at

AARP is a nonprofit, nonpartisan organization, with a membership of more than
37 million, that helps people turn their goals and dreams into real
possibilities, strengthens communities and fights for the issues that matter
most to families such as healthcare, employment and income security,
retirement planning, affordable utilities and protection from financial abuse.
We advocate for individuals in the marketplace by selecting products and
services of high quality and value to carry the AARP name as well as help our
members obtain discounts on a wide range of products, travel, and services. A
trusted source for lifestyle tips, news and educational information, AARP
produces AARP The Magazine, the world's largest circulation magazine; AARP
Bulletin;; AARP TV & Radio; AARP Books; and AARP en Espanol, a
Spanish-language website addressing the interests and needs of Hispanics. AARP
does not endorse candidates for public office or make contributions to
political campaigns or candidates.AARP Foundation is an affiliated charity of
AARP that is working to win back opportunity for struggling Americans 50+ by
being a force for change on the most serious issues they face today: housing,
hunger, income and isolation.AARP has staffed offices in all 50 states, the
District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Learn more at


Press spacebar to pause and continue. Press esc to stop.