Get ready for statin price wars

Helen Palmer Jun 23, 2006

KAI RYSSDAL: If there was ever a good day to have high cholesterol, this might be it. The patent on a blockbuster cholesterol-lowering drug expires today. Zocor’s made by Merck. It’s second in sales only to the all time best seller Lipitor. It earned Merck nearly $4.5 billion last year. But bookkeepers are expecting about half that in 2006. Generics will cut into profits now that the patent on Zocor has lapsed. Merck’s doing what it can to hang onto its market. And health care providers are looking forward to a new drug price war. From the Marketplace Health Desk at WGBH, here’s Helen Palmer.

HELEN PALMER: Drugs that lower bad cholesterol — they’re called statins — are one of the most useful and valuable therapies. The global market’s about $30 billion. Statins earned $16 billion in the US. So drug experts like Harvard’s Jerry Avorn are thrilled that Zocor’s patent has run out.

JERRY AVORN: Taking these drugs if your cholesterol is high will indeed reduce your risk of heart attack or stroke and this is a boon to patients because more and more people will be able to get a statin drug and be able to afford it.

Avorn says many people still can’t afford to fill their prescriptions. But once a brand name drug goes generic, the price drops sharply. Till yesterday, Zocor cost around $2.75 a pill. Analysts say generic Zocor may cost 50 cents or less, and patients will see that change when they collect their prescription.

STEVEN MILLER: Members, the patients themselves, will pay usually a generic co-pay of $10 to $15.

That’s Steven Miller. He’s chief medical officer for the pharmacy benefit manager, Express Scripts. He says generic Zocor will save billions.

STEVEN MILLER: Almost 85 percent of patients could be safely and effectively treated with the generic. If you multiply that out by what the potential savings are, you’re talking about over $10 billion in savings, if patients would switch to the generic.

Of course, often people don’t switch. But Donny Wong, who analyses this market for Decision Resources, says about half of the doctors they surveyed plan to go generic. That’s partly because pharmacy benefit managers like Miller are twisting their arms.

DONNY WONG: A lot of the pharmacy benefit managers and the HMOs are mandating step protocols where physicians have to start prescribing generic agents for their patients first.

They can only prescribe a brand name drug if the generic doesn’t cut bad cholesterol levels enough. But “effectiveness” is the big selling point for the competition.

LIPITOR AD: Lipitor is the number one prescribed medication for lowering cholesterol. In clinical studies, Lipitor with diet lowered bad cholesterol 39 to 60 percent.

Sixty percent of statin patients in the US take Pfizer’s Lipitor. That helped propel its earnings to $13 billion last year. But Wong says it’s vulnerable.

WONG: Pfizer stands to lose several billion dollars from this as patients are switched from Lipitor to Zocor and generic Zocor. The good news for Pfizer is that their drug is more efficacious.

Pfizer’s pushing that line for all it’s worth. The company’s head of US pharmaceuticals, Pat Kelly, calls Zocor “a secondary product.”

PAT KELLY: Much like all cholesterol patients are not the same, neither are all statins created equal. Lipitor is by far the clinically superior statin.

But other statin makers, including Merck, are fighting back with their own more-powerful new drugs.

VYTORIN AD:“Only Vytorin helps block the absorbtion of cholesterol from food and reduces the cholesterol your body makes naturally based on family history.

As well as pushing the new drug, Vytorin, Merck’s fighting to hang on to the Zocor market. It’s struck a deal with big health insurers like UnitedHealth and Wellpoint to supply Zocor very cheaply, even undercutting the price offered by the generic maker. Which is good news for health costs overall and for patients and employers who foot the bill. But Harvard’s Jerry Avorn says there is a downside to cheap statins.

AVORN: We need to avoid the pill-for-every-ill mentality and try to think about lifestyle first. The number one place to start is with diet and exercise. . . . We hardly ever see direct-to-consumer ads for diet and exercise.

And that won’t change until there’s money to be made there. Meantime, prepare to hear more about statins like Crestor and Vytorin and, of course . . .

LIPITOR AD:“Lipitor. The lower numbers you’re looking for.”

In Boston, I’m Helen Palmer for Marketplace.

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