For
current events in the Pharmaceutical industry, the issue of high cholesterol
and drugs used to manage it have been under the spotlight recently. Pfizer’s
Lipitor, a very popular statin drug used to treat high cholesterol finally came
off its patent a year ago, resulting in other pharmaceuticals developing their
own version of cholesterol management. Lipitor was the biggest selling drug
ever and gave Pfizer a multibillion-dollar cash flow every year until it became
a generic. When Lipitor came off its patent, this became an opportunity for
other pharmaceuticals to pull in some consumers with their own version of
cholesterol control. The problem was though, how could they improve a drug that
already seemed in its best form?
Companies in the pharmaceutical
industry are making a mad dash in the R&D department to develop the same
type of Lipitor but improved with an extra focus on a protein called PCSK9 that
would clear the “bad form of cholesterol.” But to make the drug with that extra
part would mean administrating the drug in a shot. The price of administrating
the shot and the unlikeliness of some consumers willing to get a shot make marketing
the new drug difficult. It even makes some companies wonder if they should even
continue with the drug. But the market is so large with most American adults
having high cholesterol and with the Lipitor off patent, so not developing the
new drug would be silly.
Winslow, John. "The Wall Street Journal." Wall Street Journal. (2012): n. page. Web. 7 Nov. 2012. <http://online.wsj.com/article/SB10001424052970203347104578101082109438820.html?KEYWORDS=pharmaceuticals>.
This is very interesting because with Lipitor coming off of its patent, Pfizer is probably lsoing a lot of money. You said that Lipitor was a multi-million dollar drug and now that Pfizer lost it to generics, those millions of dollar are being lost from the company. This is probably hurting Pfizer very much. I wonder if this will show in their financial statements. Maybe we will be able to see how in the past year, Pfizer's net income and revenue decreased due to the fact that they lost Lipitor. I'm sure this will hurt them a lot and probably be a little risky to invest in.
ReplyDeleteDo you think this trend is going to last? as people are getting healthier, are these high cholesterol drugs be less profitable. This is similar to Novo Nordisk's increase in income because they sell diabetes drugs. This might only be a short spike in income because it is such a limited differentiating factor and might end the need for these kinds of drugs might end soon.
ReplyDeleteI am wondering why did Pfizer decide to come of of its patent? As Pfizer is in its mature stage of the life cycle, is it trying to diversify itself in some other way? Now other companies have the chance, and have already started, to develop products nearly identical to the original Lipitor. This decision is costing Pfizer a lot of money, as they received much of their profit from this product. Hopefully Pfizer is devising a method to increase their profits.
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