Expect savings when generic Lipitor hits the market

November 28, 2011

Generics are driving pharmaceutical companies to seek new marketing strategies

The launch of generic Lipitor in November 2011 has many pharmaceutical firms changing their marketing strategies. As a result, many patients can look forward to decreased drug costs. Lipitor is the highest-grossing drug of all time. It's used to prevent heart attacks and strokes by decreasing levels of "bad" cholesterol.

The launch of this generic comes in the middle of a number of "blockbuster" agents losing their patents in recent and coming years. This year alone, an estimated $50 billion in revenue will be lost by manufacturers because of drug patent expirations. As a result, the pharmaceutical industry has changed its strategy in this uncertain market. Large cuts in research and development, and a focus on lesser-earning medications, have moved the industry in a new direction. This, together with some of the largest corporate mergers in recent history, forces payers and consumers alike to be conscious of the changing marketplace.

Consumers can expect lower costs, but perhaps not immediately

What does this mean for patients? Simply put, the launch of generic products into the market means a decrease in drug costs. Since generic products have lower costs, many members can expect savings when generics come to market. These savings, however, may not be immediate.

Ranbaxy Laboratories is the generic drug manufacturer that has been given permission to exclusively market its generic version of Lipitor (known by the generic name atorvastatin). Ranbaxy will sell the drug as the sole generic manufacturer in the U.S. for 180 days following this launch. During the exclusivity period, prices of generic versions typically stabilize at 90 to 95 percent of their brand counterparts. This, together with competitive offers from Pfizer (the maker of brand Lipitor), means that the savings may be lean in the first few months after the launch.

After the expiration of the 180-day exclusivity period, other generic manufacturers are allowed to enter the market with their own versions of generic atorvastatin. As a result, prices will decrease in the market driven by competition between generic manufacturers. This should greatly reduce the cost of atorvastatin in a short amount of time. These deeper decreases in pricing mean big savings to consumers and payers alike. These savings in drug costs decrease overall healthcare costs, and help lower premiums for Humana members.

For more information, contact your Humana representative today.