Sales fell to a comparative trickle after the U. Last year, Lipitor accounted for just 4. What is sometimes overlooked is that Lipitor, the best-selling drug in history, came to Pfizer as the result of its acquisition of Warner Lambert.
The ACCC alleged that Pfizer had misused its market power and engaged in prohibited anti-competitive exclusive dealing. Pfizer sought to remain competitive in the market.
The decision is important for the pharmaceutical industry for several reasons. First, it is the first Australian decision to consider what strategies pharmaceutical patent holders can legitimately employ from a competition law perspective in the lead up to patent expiry.
Secondly, the decision provides valuable commercial insight into what constitutes permissible competitive conduct in the pharmaceutical industry, by recognising that: The decision may also add fuel to the debate surrounding draft recommendations of the Harper Review to amend section 46 of the Competition and Consumer Act CCA.
The Harper panel has recommended the introduction of an effects test which considers whether conduct would substantially lessen competition.
This proposed reform has been criticised in a number of submissions and in the broader public debate. That said, it would be overly simplistic to characterise the outcome in the Pfizer case as demonstrating a deficiency in the current structure of the law.
The judgment emphasises that the application of competition law requires careful assessment of the competitive dynamics of the conduct and the market in which it is to be assessed. It is doubtful that a different result should have ensued on any properly framed law concerned with a misuse of market power.
As at Januaryatorvastatin was the highest-selling medicine, in terms of volume and value, under the Pharmaceutical Benefits Scheme PBS in Australia.
The drug atorvastatin, sold under the Lipitor brand, was patent protected, with the patent expiring in 18 May The patent provided Pfizer with the exclusive rights to exploit Lipitor, which included the right to sell Lipitor in Australia until the expiry of the patent.
Misuse of market power The following elements must be established: Importantly, each of these elements must be present at the same time and there must be a connection between the substantial market power and the proscribed purpose i.
Exclusive dealing Exclusive dealing as defined in the CCA is concerned with conditions placed on the supply or acquisition of goods or services. In Pfizer, the ACCC alleged that Pfizer supplied its atorvastatin products to pharmacies with discounts, allowances and rebates on condition that the pharmacies would neither acquire nor re-supply atorvastatin from a competitor of Pfizer except to a limited extent for periods of up to 12 months.
This type of exclusive dealing is only prohibited if the conduct has the purpose, effect or likely effect of substantially lessening of competition. The Court held that: What was the market? Nevertheless, it provides insight into how the Court may assess pharmaceutical markets, particularly where patent expiry is imminent.
In so doing, the Court rejected the broader market put forward by Pfizer that there was a market for the wholesale supply of a range of pharmaceuticals to pharmacies. Of relevance to this case is the regulation of medicines that are supplied at a Government-subsidised price by virtue of the PBS.
As illustrated by the decision, PBS pricing plays a central role in the structuring of supply arrangements between manufacturers, wholesalers and pharmacies.
Although the process for determining pricing changed on 1 Octoberfor the purpose of the case the Court considered the position prior to this date. Of particular relevance to this case was the impact of the statutory PBS price disclosure mechanism and the implications for the first month after PBS listing of a generic product.
Lipitor’s patent is set to expire in March FY and paediatric exclusivity will expire in June , resulting in a significant negative impact on Pfizer's revenues. Patent cliff is a colloquialism to denote the potential sharp decline in revenues upon patent expiry of one or more leading products of a firm. A patent cliff is when a firm's revenues could "fall. For this proposal to have an impact, it would require the SPC expiry date within European countries to be significantly later than in other markets. There is a large diversity in SPC / patent expiry dates between non-European countries and European.
The one-month grace period available under the statutory price disclosure regime created an incentive for the sell-in of a large volume of stock before 30 April This was particularly relevant to informing the atorvastatin sell-in deals struck with pharmacies in early Misuse of market power Did Pfizer have substantial power in the market?Where We Stand On Pharmaceutical Patent Settlements Law, New York (October 23, , AM ET) (10 years before patent expiry); (2) granted sublicenses to Lipitor cases for disposition by a single panel, citing “the similarity of the reverse payment claims raised.
Read more about Lipitor patent expires, all eyes on Ranbaxy generic on Business Standard. For the Ranbaxy brass, the past week must have been the toughest in their career as they attempted to patch up with the drug regulator of United States to facilitate the exclusive launch of a low-cost version of Pfizer’s blockbuster drug Lipitor.
Loss of exclusivity for a medicine can have a big impact on revenues and profits.
Small molecular drugs can lose almost 90 (in advance of patent expiry), investment and a strong multi-disciplinary team to be developed, followed Pfizer’s Lipitor® global revenues from to Source: Pfizer annual reports Year Revenue ($.
In the United States alone, $ billion of branded drugs face patent expiry over the next six years, EvaluatePharma reported, noting that Pfizer will take the largest hit from the "patent cliff" later this year with the loss of patent protection for its cholesterol medication Lipitor.
Rx Price Watch Case Study: Efforts to Reduce the Impact of Generic Competition for Lipitor. By Leigh Purvis. a. The patent for Lipitor was originally expected to expire no later than June Lipitor had already benefited from 14 years on the market with a patent-protected monopoly.
Pfizer needed to manage the erosion of revenue that would come from the expiry of its patent over the molecule atorvastatin, which it sold as Lipitor, and the subsequent increase in competition from generics, so it took a number of steps.