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Pfizer’s Patent on Blockbuster Cholesterol Drug Expires (PFE)

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PfizerPfizer Inc.’s (NYSE: PFE) patent on Lipitor, a cholesterol-lowering drug, expired today, clearing the way for generic version of the blockbuster drug. Lipitor, which is best-selling drug of al-time, is the most popular medication in the U.S.

The drug became available in 1997 and since then has raked in nearly $100 billion for the New York City-based pharmaceutical company. Lipitor has managed to achieve a blockbuster status even in a market that includes a number of other cholesterol-lowering drugs.


In the U.S. alone, cholesterol drugs account for 255 million prescriptions annually. Approximately nine million people in the U.S. take Lipitor.

Following the expiration of the patent, Watson Pharmaceuticals, a U.S.-based company announced the launch of a generic version of Lipitor. Watson has entered into an exclusive supply and distribution agreement with Pfizer under which Pfizer will manufacture the drug and Watson will sell it. Watson will share net sales with Pfizer until 2016.

Ranbaxy, an India-based pharmaceutical company, is also planning to launch its generic version of Lipitor. The company, however, requires approval from U.S. authorities as there are concerns about quality control.

Damien Conover, analyst at Morningstar, believes there will be a price war in the first six months.

Lipitor accounted for 15% of Pfizer’s annual sales and the company is now looking for new sources of revenue to replace the cash flow from the blockbuster drug. The company has not yet reveled how much it expects to lose from the patent expiration. For 2012, Pfizer expects sales of $63-$63.5 billion, this is down from sales of $67.8 billion reported in 2010.

In 2010, Lipitor sales totaled $10 billion. This is expected to go down substantially next year. Pfizer, however, is not giving up the fight. The company plans to dent its competitors in the generic market.

 

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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