Pharma Reform

In a previous post we discussed the opportunity for Big Pharma companies to potentially preserve market share for their brands by competing with generic versions on price once their products lose market exclusivity.  Pfizer seems to have taken this strategic concept to a new level.  First cutting deals with Pharmacy Benefits Managers to make Lipitor^® available at or below generic drug prices, then turning around and also providing discount coupons to lower patient co-pays for example from $10 for generic drugs to $4 for Lipitor.

Pfizer’s aggressive approach to “competing “ in this market has been met with considerable negative commentary and even Congressional inquiry.  Interestingly, Pharmacy Benefits Managers and their trade association (Pharmaceutical Care Management Association), the same groups that use and advocate similar tactics to encourage generic drug use,  are on the front lines of criticizing the Pfizer co-pay discount tactic.  The contention is that the Pfizer campaign will cost insurance companies and employers more,  even if patients benefit from a lower out of pocket cost.   And some of those in Congress have expressed concern,  wonder if the discounts provided by Pfizer will be passed along to insurers and employers or be pocketed by the PBMs.

Well, if there was such a thing as a “free, open market” there might be a simple answer to this.  Let the market decide.  If Pfizer wants to price their products similar or even lower than their generic competitors,  they can.  If patients want to use the discount coupons to lower their co-pays,  they can.  If generic drug companies want to provide co-pay discount coupons,  they can.  If the PBMs, and their insurance company and employer partners,  want to lower or even eliminate their co-pays for generic drugs, they can.

If this is really about “price” and lowering the cost of prescription drugs, especially for a particular product, within regulatory quality standards, let the low cost producer and provider with the lowest price win.  Why shouldn’t branded product manufacturers be able to compete on price in the generic drug market, if they want to?  m ike@pharmareform.com