Lipitor as a loss leader? That's the approach Wegmans' pharmacies are taking. As the Philadelphia Inquirer reports, the grocery store chain offers generic versions of Lipitor for free, as a way to bring in new pharmacy customers. And the promotion must be successful--Wegmans just extended it through the end of this year.
Oh, how the mighty Pfizer ($PFE) cholesterol pill has fallen. Who'd have thought the $9-billion-a-year drug would be given away less than two years after its patent expired? Of course Lipitor's branded sales have already plummeted beginning in late 2011 on competition from a first-to-market generic from Ranbaxy Laboratories and an authorized copy from Watson Pharmaceuticals. And then, when multiple copies hit the market and pricing wars really began last spring, the decline accelerated.
So, now, if Pfizer loses any sales on Wegmans' promotions, it will be on customers who've clung tightly to their branded version--and were willing to pay the necessary premium. "Lipitor is such a well-known brand, and you might have some that are reluctant to leave the brand-name version," Wharton School's Barbara Kahn told the Philadelphia Inquirer. "But free is definitely a way to incent people to change. That is pretty innovative."
Wegmans doesn't see the generic Lipitor promotion as a loss leader, because those are usually short-term price cuts, spokeswoman Jo Natale told the Inquirer. And Wegmans isn't the only one to slash the up-front cost of generic Lipitor; as the Inquirer notes, the Midwestern chain Meijer also offers free atorvastatin. And drugstores such as Walmart and Rite Aid have $4 prescription programs as well.
It's just another sign of the commoditization of generic drugs in the U.S. With so many once-blockbuster drugs now off patent, and co-pays for brands rising ever higher, more U.S. patients than ever are using generics. And unlike in the developing world, where branded generics are big, many U.S. patients often have no idea which generics maker is supplying the pills they pick up at the pharmacy.
- see the Inquirer story
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