Pfizer ($PFE) faces another stumbling block on its Lipitor obstacle course. As The Wall Street Journal reports, Express Scripts ($ESRX) is moving the cholesterol drug to a less-favorable spot on its formulary, raising co-pays for pharmacy customers. The change is designed to encourage more patients to switch to Lipitor's new generic rivals, and counters some of Pfizer's aggressive discounting. The move doesn't affect Pfizer's deal to supply Lipitor to Express Scripts' mail-order pharmacy.
Express Scripts' Everett Neville told the newspaper that generic uptake was slower than usual with Lipitor at first, partly because of questions about the availability of Ranbaxy Laboratories' version, the only independent copycat available, and partly because of Pfizer's efforts to keep market share. A couple of weeks ago, analysts were remarking that Pfizer's Lipitor share was "pretty stable" compared with the usual sickening dropoff, and CEO Ian Read was citing a 37% to 38% share.
That may have changed. New Lipitor sales data shows Pfizer losing some ground. Quoting Goldman Sachs, the WSJ says the Lipitor brand had 32% market share for the week ended Jan. 13. That's a slip of 5 percentage points from Lipitor's December levels. Pfizer's initial goal was to keep about 40% of the market, at least until additional generic versions make their debut in May.
AmerisourceBergen ($ABC) CEO Steven Collis said his numbers concur, the WSJ reports. During the wholesaler's earnings call last week, Collis said the "conversion rate" to generics "is now approaching 70% and looks like it could go up from there."
Pfizer itself tells the WSJ that it was always expecting "the majority of Lipitor patients" to receive a generic version at the pharmacy. And to hear Watson Laboratories ($WPI) CEO Paul Bisaro tell it, Pfizer's bend-over-backward efforts to keep Lipitor sales aren't worth it anyway; the company would do just as well sharing revenues from the authorized generic. But Bisaro is biased, of course--Watson sells that authorized copy.