Pfizer Seeking to Capitalize on Lipitor Brand Following Patent Expiration

News media outlet Bloomberg reported yesterday that Pfizer is seeking to add Express Scripts Inc. to the list of U.S. pharmacy benefits managers that won’t disperse generic Lipitor after expiration of that drug’s patent protection this month. Lipitor generated $10.7 billion in sales last year for Pfizer.

Often, after the expiration of a patent for a drug that has produced huge revenues, the drug manufacturer faces significant new competition in the marketplace as other drug manufacturers introduce generic forms of the drug.  This competition can lead to major decreases in the prices charged for the formerly patented drug, and much lower revenues for the pharmaceutical company.  The other drug manufacturers can offer the generic version of the drug at a greatly reduced price, as they do not need to recoup the large research and development costs expended to develop the drug.

Pharmaceutical companies are learning that while their patents may expire, the goodwill and branding associated with their products does not have to end.  Through carefully orchestrated continued branding and marketing, sales of branded pharmaceuticals may have a life significantly beyond the patent protection period, and even after patent expiration the original drug manufacturer may be able to charge a premium compared to generic versions.