TEXT OF STORY
TESS VIGELAND: Today Merck's blockbuster cholesterol-lowering drug Zocor loses its patent. So what happens when a brand drug goes generic? Well if the past is prologue, the price of the drug could drop sharply. But Merck's got a plan to hang to its share of the market. From the Health Desk at WGBH, Helen Palmer has the story.
STEVEN MILLER: This is really a very big day in the pharmacy business.
HELEN PALMER: Steven Miller is chief medical officer for Express Scripts
MILLER: Zocor represents over $3 billion in sales on an annual basis, and so this is truly one of the largest drugs ever to go generic.
Express Scripts negotiates drug prices for 55 million patients. Drugs to lower cholesterol — also called statins — are the top-selling class of pharmaceuticals. Miller says generic Zocor would be safe and effective for 85 percent of patients.
MILLER: If you multiply that out by what the potential savings are, you're talking about over $10 billion in savings if patients would convert to the generic.
Analysts say Zocor costs about $2.75 a day. Once several generic companies make it, that could drop to 50 cents a day or less. For the first six months though, just one generic maker has a monopoly. But Merck's negotiated a deal with some large insurers to sell them Zocor for less than the generic. Donny Wong analyses this market for Decision Resources.
DONNY WONG: This is a very novel move by Merck to actually go after the generic by undercutting sales of the generic.
Wong says drug makers often resign themselves to losing out to the generic competition. But Merck's decided to fight. Ian Spatz is Merck's Vice President of public policy.
IAN SPATZ: Generic competition for Zocor is good for patients, good for people who pay for medicines. We're going to continue to sell Zocor and we're going to price it competitively.
Zocor is second in sales only to the world's best selling cholesterol buster, Pfizer's Lipitor, that costs about $3 a pill. Wong says about half of cardiologists they surveyed said they'd switch to a generic statin.
WONG: The real loser in the market here, it's going to be Lipitor. When faced with a drug that's almost equivalent in efficacy but at a lower cost, there's almost no way for Lipitor to win in the long run.
That's not how Pfizer sees it. Pat Kelly, head of US Pharmaceuticals for Pfizer says Lipitor's the market leader because it's more effective, and it's worth the extra cash,
PAT KELLY: We fully expect that there will be some who will decide that low cost at all cost medicine is a good thing to practice. We beg to differ.
Kelly says Pfizer negotiates very aggressively with health insurers and pharmacy benefit managers too. But Steven Miller of Express Scripts says in the next five years, $50 billion worth of drugs, including Lipitor, will lose patent protection.
MILLER: The other neat thing about generics is that patients can afford them, and so it's been demonstrated that they're more wiling to stay on the drug, and therefore achieve even better health outcomes.
And that's what makes statin wars great news for patients, as well as health insurers.
TESS VIGELAND: And in Los Angeles I'm Tess Vigeland. Thanks for being with us and enjoy your weekend.