Generic approvals may set off statin storm

"The whole situation is very messy, because so many manufacturers have received approval for generic simvastatin," said Mahmud Hassan, a professor of finance and economics at Rutgers University Business School in Newark, N.J. "Many players are in the game, including Pfizer with its rival drug, atorvastatin [Lipitor]."

The loss of simvastatin's U.S. patent protection could cost Merck billions of dollars per year. It could be almost as costly to Pfizer, considering that atorvastatin had global sales last year of $12 billion. Hassan, who is also director of the pharmaceutical MBA program at Rutgers, noted, however, that Pfizer has a huge upper hand in the global marketplace, because generic atorvastatin was rejected in Europe and Asia.

To complicate matters further, the same week simvastatin went off patent, Merck signed a deal with UnitedHealth Group and WellPoint under which these PBMs moved branded Zocor into the lowest-priced tiers on their formularies. Consumer advocates are concerned that these agreements will set a dangerous precedent and undermine the profitability and research capabilities of generic companies. The negative impact that a decrease in profits would have on research and development could ultimately compromise the availability of low-cost drugs. Sen. Charles Schumer (D, N.Y.) has asked the Federal Trade Commission to investigate the deal between Merck and UnitedHealth, and has referred to their agreement as a "legal bribe."

"This definitely marks the beginning of a trend for other blockbuster drugs soon to go off patent, such as sertraline [Zoloft, Pfizer]," said Tony Moore, R.Ph., the owner of Moore's Pharmacy in Martinsburg, W.V. In an e-mail to Drug Topics, he wrote, "It is time for Congress to step in and look into the practices of PBMs. Pharmacists should educate their customers about PBM abuses. They will be the ones paying higher co-pays and premiums in the future, so that the PBMs can keep their rebate dollars."

From an economic and marketing perspective, however, Hassan said, "It's a business deal. If Merck reaches an agreement with a few PBMs, I do not see why that's a problem. It's fair game. It will be interesting to see what action the courts take, if litigation ensues, and how Pfizer reacts to these deals. Pfizer may make its own agreements with PBMs-who knows?"

For its part, Pfizer is confident in its position at the head of the statin class. "In the branded market, we are very much looking forward to the continued growth of Lipitor, relevant to Zocor, among both physicians and patients," said a company spokesman. "Over the past 10 years, a growing body of evidence has demonstrated the superiority of Lipitor compared with Zocor from both efficacy and safety profile perspectives."