Coupons help Big Pharma to fend off generics

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Coupons help Big Pharma to fend off generics

Generics/General | Posted 07/09/2012 0 Post your comment

Pfizer’s success at using co-pay coupons to prevent patients switching from brand-name products to generics is encouraging other pharmaceutical giants to follow suit.

When its patent for the cholesterol-lowering medication Lipitor (atorvastatin) expired on 30 November 2011, Pfizer anticipated intense competition from generics alternatives from Ranbaxy Laboratories and Watson Pharmaceuticals. Until then, global Lipitor sales had reached US$13 billion a year. To try to hold on to as much of its market share as possible, the company introduced co-pay coupons enabling insured patients to pay as little as US$4 per month to stay on Lipitor rather than opt instead for a generic medicine. Without insurance, Lipitor costs around US$175 per month, while insured patients typically had to pay up to US$50 in co-payment, compared to the total cost of a generic drug of around US$10 or US$15 per month.

Pfizer’s ‘Lipitor For You’ coupon programme attracted an impressive 750,000 patients in its first few months, and enabled the company to hold on to around 15% of the market as of June 2012. Pfizer has since extended the ‘Lipitor For You’ programme to December 2014, and is offering a similar deal for another five products including breast cancer pill Aromasin (exemestane) and antidepressant Effexor XR (venlafaxine).

Novartis is now introducing US$4 co-payment coupons in order to promote brand-loyalty to the blood pressure medications Diovan (valsartan) and Diovan HCT (valsartan/hydrochlorothiazide). Meanwhile, Bristol-Myers Squibb is providing co-pay coupons to patients on Plavix (clopidogrel) for the prevention of strokes, reducing their payments from a retail price of around US$215 to just US$37 per month.

Experts are predicting that this new strategy is likely to continue as pharmaceutical companies become increasingly squeezed by falling profits and a lack of new products to replace the blockbusters that have each reaped over US$1 billion in annual sales but whose patents are due to expire in the coming years. Whether the tactic will work every time is questioned, however, as increasing numbers of generics per brand-name product intensifies the pressure to reduce the cost price – and profit margin.

Insurers are opposed to the idea of coupons because they are obliged to cover the remaining costs of prescription drugs. Some are introducing top-up fees for patients who wish to remain on brand-name medications rather than switch to generics alternatives, according to Mr Everett Neville, Head of Pharmaceutical Strategies at Express Scripts, the largest US pharmacy benefit management company.

Mr Robert Zirkelbach, spokesman for America’s Health Insurance Plans is quoted as saying that the coupon approach ‘is going to ultimately mean higher premiums for everybody’.

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Pfizer continues to fight for Lipitor

Source: diovan.com,effexorxr.com, lipitor.com, Pfizer, plavix.com