Senators seek details of Pfizer Lipitor deals

Three leading senators are inquiring into drugmaker Pfizer Inc’s efforts to limit the sale of generic versions of its Lipitor cholesterol drug, which lost U.S. patent protection this week.

Their concern was prompted by a newspaper report earlier this month that Pfizer had struck deals with leading insurers and pharmacy benefits managers, who negotiate prices on behalf of companies and insurers, to offer discounts on Lipitor if they block prescriptions for its generic versions.

Pfizer said it is providing Lipitor at prices equivalent to or less than generic versions as it tries to hold onto sales of its best-selling drug. The company denies it put any conditions on benefits managers.

Lawmakers from three Senate oversight committees said the arrangements could lead to limited access to generic drugs and push up healthcare costs for patients and U.S. 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 to Pfizer, Medco Health Solutions Inc, Express Scripts Inc, Catalyst Health Solutions Inc, Coventry Health Care Inc and UnitedHealth Group Inc.

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.

“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 December 1, 2011 through May 31, 2012, while pocketing the discount from Pfizer,” the senators said.

The senators’ request followed a November 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.

“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 in response on Thursday. “As a result, patients receive Lipitor at co-pays comparable to generics. Participation in Pfizer’s programs by a health plan is entirely voluntary.”

RESPONSE DEADLINE

The senators’ letter gives the companies until December 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.

Medco said it would cooperate with the inquiry.

“We look forward to sharing our approach on how Medco’s Lipitor strategy will save our clients and members upwards of $1 billion over the next year alone,” spokeswoman Ann Smith said.

Express Scripts said in an e-mail response to Reuters that it does recommend generic substitution for Lipitor when patients fill the subscription at retail pharmacies, but 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 had chosen to block filling retail prescriptions with generic Lipitor. The company said mail order prescriptions would be offered for the same co-pay as a generic, but use the Pfizer brand version.

Lipitor became one of the biggest-selling drugs after its introduction in 1997. The U.S. Food and Drug Administration approved late on Wednesday the sale of a generic version made by Indian drugmaker Ranbaxy Laboratories Ltd. Pfizer is also selling a so-called “authorized generic” version of the drug, known chemically as atorvastatin, in partnership with Watson Pharmaceuticals Inc.

Pfizer shares closed nearly unchanged on Thursday.

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By David Morgan

WASHINGTON