Senators Probe Pfizer Plan To Block Generic Lipitor
16 CommentsBy Ed Silverman // December 1st, 2011 // 9:40 am
First, the US Federal Trade Commission began poking around into the unusual program Pfizer has struck with health plans and pharmacy benefits managers to block generic versions of its best-selling Lipitor cholesterol pill, which lost patent protection yesterday. Now, three US Senators have written the drugmaker over concerns that the moves will increase costs for government health plans and others.
According to letters sent by several PBMs to pharmacies, Pfizer has agreed to discounts for health plans and PBMs that block generic versions of Lipitor. The payers will lower Lipitor co-payments, currently at $25 or more for a 30-day supply, to $10. Consumers who submit a prescription for a generic version of Lipitor are, instead, supposed to be given brand-name Lipitor (here are the letters from the PBMs).
But the unusual move by Pfizer, which hopes to retain hundreds of millions of dollars in Lipitor sales over the next several months, has angered the Senators. “Consumers and taxpayers foot the bill when drug benefit companies and insurers manipulate the marketplace to prevent access to generic drugs for millions of Americans,” says Herb Kohl, a Wisconsin Democrat who heads the Special Senate Committee on the Aging, in a statement (you can read the statement and letter here).
In their letter to Pfizer ceo Ian Read, the senators reiterate concerns expressed by some pharmacies that the PBMs may pocket discounts offered by Pfizer, but Medicare and employers will pay the full freight. “While letters from PBMs to pharmacies indicate that a plan member’s co-pay for Lipitor would be discounted and equal to the cost of a generic prescription, we are concerned that the PBMs 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,” they write.
Medco Health Solutions, however, denies this will occur. “We aren’t in the rebate flow…We’re no better or worse off… I’m uncategorically saying Medco is not retaining any incremental profit” from deals between Pfizer and any health plan, Tim Wentworth, group president of employer and key accounts at Medco, told us recently. (back story).
And a Pfizer spokesman sends us this: “The Senators’ letter is based upon an earlier article that contained incomplete and incorrect information about our Lipitor programs. We want the public to understand the facts. Our intent is to offer Lipitor to payers and patients at or below the cost of a generic during the 180-day period. As a result, patients receive Lipitor at co-pays comparable to generics.
“Participation in Pfizer’s programs by a health plan is entirely voluntary. It is not imposed on any plan either by Pfizer or their PBM. We have contracted with PBMs and health plans that serve Medicare Part D patients. The Centers for Medicare and Medicaid Services considers all rebates received directly or indirectly from pharmaceutical manufacturers to be price decreases that reduce the drug costs incurred by Part D plans.”
The letters, which were also sent by Max Baucus, a Montana Democrat who chairs the Senate Finance Committee, and Chuck Grassley, an Iowa Republican, to UnitedHealthcare, Coventry Health Care, Catalyst Rx, and Express Scripts, which is seeking approval for its planned $29 billion acquisition of Medco. A Senate hearing is being held next week.
Searching2000
Ed:
Stay away from the grapefruit juice this morning, you are ‘over-dosing’ on Lipitor and we wouldn’t want something fatal to happen!
Just a joke Ed - great work.
MC RPh
Like just about everything else these senators don’t seem to understand how this works. No wonder they have a 9% approval rating.
Is there lead in the pipes in Washington? That would explain the lack of intellect and research before these knee-jerk reactions.
Anne PME
Given all of the uncertainty surrounding generic Lipitor and need to ensure patient access I am not sure if this is the best example of deceptive PBM strategies to intervene. The again, I do not have access to inside information.
From a PR perspective this might give the perception that certain members of congress seek to promote foreign generic companies over American based companies like Watson and Pfizer. Maybe it might make sense to look at and update the Hatch Waxman regs that put us in this position in the first place.
Salient point
If I’m a business or (heaven forbid) Medicare, & I think my PBM is making a practice of basically screwing me on generic deals with drug companies, shouldn’t I just, you know, take my business elsewhere? Sounds wacky, I know.
Isn't competition good?
Pfizer has done more to foster competition over the next 180 days than any generics company. That is great for patients and the health system.
MC RPh
What this situation really exposes is the racket of 6 month generic exlcusivity. In the scenario of a single (or double if you include the authorized generic) source generic the generic costs the sponsor more than the brand in most benefit structures.
The original intent of the law was to encourage generic companies to file and market generics. With the bundle of money to be made this incentive is no longer required. If you have 8 or 10 generic manufacturers hit on day 1 you have real competition and savings.
Reality Check
Wait a second. These Senators’ would prefer a generic from an Indian company with a history of manufacturing problems over the brand?
The Novartian Chronicles
MC, it could have been much worse. If Pfe didn’t have such a bad PR problem, they would have done a pay-to-delay and we would not have seen generics for another 5 years,
Reality Check
The issue is more complicated than it appears, as I have learned in my own case.
In order to receive Lipitor at the “new price,” one has to be reauthorized by one’s rx drug plan. I was authorized years ago, but went off for a year because I got a better deal through Pfizer’s rebates.
Now, despite a ’script, my insurance is denying reimbbursement for _either_ the Watson generic or brand Lipitor because it has been more than a year, and I need to be “reauthorized.”
I will say right now that I am not going to do a retrial of generic simvastastin to qualify for “reauthorization.” This is a scam, pure and simple. It is probably also racketeering.
Reality Check
I am not the “Reality Check” above. I had not realized that someone else used that moniker when I wrote my own message.
I will claim mine as having more to do with “reality.”
Richard J Breard
LIES, CORRUPTION, LIES, CORRUPTION LIES, CORROPTION, AND MORE LIES, LIES LIES LIES LIES AND MORE CORRUPTION!!!!!!!!!!!!!!!!!!!!
Pharman
People are fools if they believe certain PBMs aren’t keeping kickback (ie-rebate) dollars. Yesterday, we paid $380 for 90 tabs of Watson brand (with “manufactured by Pfizer” on the label). In 6 months, this will cost us $20 or less. That’s too much money to not be thrown around and paid for certain favors. Oh I forgot, Pharma is so ethical they wouldn’t dream of doing something over/under/around/through the table.
For example, today I did atorvast. 10mg #90 and the total adjudicated amt. was $395. Um, some plan or employer is paying that amt. to us. I know some plans and/or employers will be overpaying for the next 6 months.
FYI-pharmacies sometimes get screwed by these pay-to-delay type deals. We pay $380 today, PBM reduces reimbursement on a weekly or bi-weekly basis. If drug only comes in 90 ct. bottle, and we only use 30/month, then we can lose $100s on one stinkin’ bottle. It’d be OK if we could by a 30 ct. bottle, but it’s not avail.
To be fair to Pfizer, they aren’t the first nor the last. Just the loudest due to Lipitor’s success.
Congress and public HAVE to fix the system or else we’ll still be annually overcharged millions of greenbacks.
Reality Check
Pharman–Who is the “us” in your message? Not clear to me who is paying whom?
Pharman
Us=pharmacies. We’ll get a weekly remittance check from a PBM for an insurance plan for all claims for that plan over a specific period.
Rich Heckmann
I am furious that with the new lipitor generics available (and I do believe there is more than one) that many medicare part D are still considering these “brand drugs” in their formulary and charging according. I cannot believe that we wrote a law that allows private insurance companies to do whatever they want. Medco is the only company that appears to consider atorvastan calcium as a generic and is charging according. The other part D companies that i am subscribed to give me this crap about 6 months and are still charging in the Brand tiers. This is a total ripoff for me and the American taxpayer. Get it fixed!
Tom Puluczek
I was asked last year did I have any information regarding the Pfizer blocking tactics when generics began competing with Pfizer prods. Certain illegal practices that had come to the attention of the SEC. As a whistleblower I let them have some details that had been enacted to circumvent SOX and standard business competition.
As my original report regarding the accounts produced from the years 2000 to 2008 the SEC now wants to forget everything and wait for Germany etc to take any action. They have no will or money to investigate and Pfizer are more than happy to pay any fines or costs to avoid problems.
What amazes me is that they are allowed to crap on the US etc and then switch production and employment to India and China. Remember Bush stating to the American public that drugs made outside the US will not be the same as the expensive drugs made by US manufactures. Get in that car and get over to Canada I will let you in on a secret “they will be the same as in the US”. Unfortunately Pfizer will not reap their 77% Margins.
Given the standards adhered to by Pfizer for the accounting records covering the 8 years I examined after India and China start producing the drugs you will be lucky if they are not a 100 sugar or chalk.
in 2009 when I first contacted the SEC I was sent a copy of an joint internal mail SEC/DoJ. ALL pharma companies had to have better then standard accounting and distribution systems as the expensive drug industry was being used by terrorists. I now can state neither of the two agencies give a damn!!