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Big pharma's unorthodox strategy

A bottle of anti-depressant pills, Zoloft

TEXT OF STORY

SCOTT JAGOW: Another major drug patent expires today. This one for the popular anti-depressant, Zoloft. It's made by Pfizer. Last week, Merck lost the patent on the cholesterol-fighting drug Zocor. Marketplace's Amy Scott tells us about life after patents for these companies.


AMY SCOTT: When a patent expires, analysts say a drug maker can lose up to 90 percent of its market share within months to generic competitors.

Pfizer plans to fight back by selling its own generic version of Zoloft as well as the name brand.

Merck is trying a similar tactic with Zocor, by slashing prices for large insurers.

It might seem counterintuitive for a company to undercut its own prices, but industry analyst Hemant Shah says drug makers don't have a choice.

HEMANT SHAH: By launching their own generic versions, either on their own, or through another generic company, they can at least keep some of that profit, which otherwise would all go to generic companies.

Consumer advocates worry the practice could drive prices up.

The Federal Trade Commission is looking into whether brand name manufacturers are stifling competition by cutting into generic drug maker's profits.

In New York, I'm Amy Scott for Marketplace.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.

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