Unbiased Analysis of Today's Healthcare Issues

How to get cheap Lipitor tomorrow

Written By: Jason Shafrin - Nov• 30•11

Is this a spam post?  Is the Healthcare Economist working for Pfizer?  The answer to these questions are no and no.

However, there are two easy ways to get the cholesterol lowering drug Lipitor for a lower price tomorrow:

  • Buy the generic form of Lipitor
  • Buy Lipitor

According to Marketplace, on Friday Lipitor will go off patent. On Thursday, the Indian drug company Ranbaxy will launch its generic at a low price. Pfizer will also lower the price of Lipitor to the generic levels.  Using its monopoly pricing power, Pfizer has made $81 billion from this blockbuster drug.

Although the arrival of generic Lipitor is good news, consumers could have saved more money earlier if it weren’t for a phenomenon known as pay-for-delay. Pay for delay occurs when a brand drug pays a generic company to delay certain lawsuits to bring a drug off patent. In essence, the generic forces the brand to split the rents from their monopoly power. In many cases the profits from splitting these rents will exceed the profits the generic drug could make by entering the market. By allowing pay-for-delay, however, consumer access to affordable drugs is also delayed. Drugmakers win; American patients and taxpayers lose.

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