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Fat City for Pfizer?

In 2005, Lipitor will be the first prescription drug to hit $10 billion in annual sales, predicts Pfizer (PFE), maker of the anticholesterol medication. With $8 billion in sales in 2002, Lipitor is already the world's No. 1 prescription drug, selling as much as the other medications in its class combined. And given that tens of millions of people with high cholesterol aren't being treated, the potential market is huge for Lipitor and similar drugs, called statins, which block the liver from turning fat into cholesterol.

The key word, however, is "potential," because growth in statin sales hasn't been as hearty as the available market might suggest. The industry is hoping for a 10% rise in new statin prescriptions this year, but thus far the numbers suggest that figure will be hard to reach. Through April, 2003, overall prescriptions were up just 2%, while Lipitor has seen a 4% rise. When judged against the double-digit gains of just a few years ago, that's disappointing. Analysts blame the sluggish economy and increasingly stringent co-pay systems at health-insurance companies, which persuade some uninsured patients to forgo the drug rather than shell out from $50 to $60 a month. Also, because of significant market penetration by statin makers, the early and easy gains are now harder to sustain.

More competition is on the horizon. Over the next year, new products from Merck (MRK), Schering-Plough (SGP), and Astra-Zeneca (AZ) threaten to crimp Lipitor's growth. Plus, a generic version of Merck's blockbuster statin, Zocor, will hurt the brand-name drugs' market share when it becomes available in 2007.

Whether the Lipitor franchise flourishes or stagnates is key to Pfizer's success. Even after its $60 billion stock acquisition of Pharmacia, completed in April, 2002, Pfizer sees Lipitor as critical to offsetting coming weakness in other areas. The $46 billion company hopes that highlighting years of data to show Lipitor's years of safety and efficacy will give it an edge over upcoming products. Pfizer isn't stopping there, however. It's also testing Lipitor in a number of other diseases, including diabetes, and it's testing single pills that are a combination of Lipitor and other Pfizer products.

BusinessWeek Online Reporter Amy Tsao spoke to Dr. Gary Palmer, vice-president of Pfizer's U.S. cardiovascular group, on June 19. Edited excerpts of their conversation follow:

Q: Why is sales growth for statins slowing down? And where is the market headed?

A: It's a concern, but probably a temporary blip. It's open to a lot of speculation in terms of why things slowed. Economic factors may be at work, health-insurance issues, for example.

It's a bit disappointing for us because heart disease is still a major cause of mortality. Out of probably 64 million people [in the U.S.] who are eligible to take statins -- and more and more all the time -- it's pretty disappointing that only 11 million are being treated [with Lipitor].

Q: At its recent analyst meeting, Pfizer said some 42 million potential patients are untreated or undiagnosed. How will you reach that population?

A: It's a challenge. People are difficult to reach, largely because raised cholesterol is asymptomatic. We're trying to get people more aware that they need to be tested, through direct-to-consumer advertising and screening programs.

There are still a lot of people out there who realize they have high cholesterol only when they have their first heart attack or stroke. Often, people who are overweight and are eating the wrong things and are developing atherosclerosis [hardening of the arteries] should be treated.

Q: Recently, investors bid up Pfizer stock after strong results were reported from a trial of Lipitor in diabetics. Is there some overlap here, since many diabetics will likely also have high cholesterol?

A: Typically, what has happened is that diabetics are focused on treating glucose levels. They usually have abnormalities in cholesterol as well, but that's often seen as secondary. In many cases, they don't get treated at all for cholesterol.

The diabetes associations have included strict cholesterol-lowering in their guidelines. For the first time, diabetics are being equated to people with heart disease. That's a relatively new development. Guidelines will take a while to filter through to general practitioners. Even though diabetics are newly diagnosed or have modestly raised levels of cholesterol, they could benefit from Lipitor. All the evidence is pointing in that direction. We don't yet have an [FDA approval] for reducing morbidity and mortality in diabetics, but we expect to file for FDA approval as soon as possible.

Q: How does Lipitor compare with Astra-Zeneca's new statin, Crestor, which was recently approved in Canada and Europe and is expecting U.S. approval this year?

A: When we look at their efficacy results, we don't see any vast difference or improvement with what we already have with Lipitor. We have more flexibility with our range. [Also], we think there are some safety issues, since their top dose was removed from studies. They've done studies in relatively small groups of people. Only in widespread use would you pick up a safety problem.

Q: What about the combination pill now in late-stage testing by Merck and Schering-Plough, using Merck's statin, Zocor, and Schering's cholesterol-cutting drug, Zetia?

A: It's a difficult comparison. With a full dose range of Lipitor, you can achieve what you want. We know [from] millions of patients what the safety looks like. A combination introduces a different dynamic in terms of safety. So far, it's an untried, untested combination.

Q: Pfizer has its own combination pills -- comprising two drugs in development. What is the advantage of Lipitor paired with your antihypertension drug, Norvasc?

A: For the combination on Lipitor and Norvasc, we already have a very good feel for what happens in each of those drugs. We're looking at people with both hypertension and high cholesterol. If you treat both, there's a tremendous benefit in morbidity and mortality. We think we have a really good combination to treat more than one risk factor simultaneously. [An application for review of Norvasc-Lipitor was filed to the FDA in March.]

Q: What about the combination of Lipitor and an experimental anticholesterol drug called CETP?

A: We're still in early stages of testing in that area. As data emerges from that program, we'll obviously have more to say. We know that by affecting the CETP pathway, which plays a part in regulating levels of HDL [so-called good cholesterol], we're able to increase HDL. That's going to be a very important combination. The combination is still in phase II testing. [Lipitor, by contrast, lowers LDL cholesterol levels.]

Q: For what other diseases is Lipitor being tested?

A: We're investigating a whole host of different areas, including additional work in type-2 diabetes, and reduction of morbidity in stroke. Then we are doing some proof-of-concept studies outside of cardiovascular diseases: osteoporosis, Alzheimer's -- and we're also considering benign prosthetic hyperplasia [enlarged prostate]. These are human studies, but we're looking for a strong signal there is benefit there before we necessarily do additional work. Affecting the cholesterol pathway has potential benefits in multiple systems around the body.

Q: What is the long-term potential for growth of Lipitor and statins?

A: As a result of our lifestyles, our environment, etc., high cholesterol...continues to grow. There's no question that cardiovascular disease is still the leading cause of death in the population. It's a slow process that starts when we're in our teens, and only manifests in our 40s and 50s. As more and more people in the population age, more are suffering the affects of atherosclerosis.

Disease associations are making tremendous efforts to make people aware that they need to be tested. As an industry, we're trying to do the same. Despite the fact that this has grown into a very large product category, we're just scratching the surface here. There's tremendous growth, easily over the next 10 years. We don't see growth declining or slowing.

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