Generic sales of Lipitor, the world’s number 1 selling pharmaceutical drug, start today.
Accounting approximately one fifth of Pfizer’s revenue over the last few years, Atorvastatin
was originally discovered in 1995 by Bruce Roth
at Warner-Lambert’s Ann Arbor facility. Warner-Lambert teamed up with Pfizer to market the drug, and at the end of its first years of sales Lipitor had 18% of the statin market and stock prices soared. When Warner-Lambert was about to be bought by rival drug company American Home Products Pfizer sparked a bidding war, eventually buying the company for $9B in 2000. (history
Sales of Lipitor reached $12.4B in 2008, and Pfizer has attempted to repeat their success over the years with a number of high profile acquisitions, including Pharmacia in 2003 and American Home Products, now Wyeth, in 2009. These acquisitions have helped make Pfizer the largest drug maker in the world, but results have been mixed at best, with some claiming a significant hit to long-term research productivity.
(discussion at In the Pipeline
Dependent on a number of currently marketed drugs and with few hopes on the horizon, Pfizer is facing one of the largest patent cliffs in the industry
. Their research centres have been rocked by a number of prominent lay-offs, including the entire 2400 person facility
in Sandwich, England (the home of Viagra) and the Ann Arbor facility where Lipitor was first discovered. Research spending is set to equal 10% of total expenses
, in an industry that typically spends between 15% and 20%
, and the word “Pfizered
” is taking on a life of its own
. It is expected that by the end of 2012 Pfizer will no longer be the world's largest pharmaceutical company, slipping to 4th place by 2017.
The response from management has been the source of some confusion, with a number of ill fated
research projects (pic
) and embarassing tell-alls
Current hopes seem to rest on “Pay to Delay”, deals in which the drugmaker offers incentives to its generic rivals in order to prevent the introduction of lower priced alternatives. Unsurprisingly, the FTC is not amused
, with a bill to formally ban the deals in congress.