Lipitor (atorvastatin) was the top-selling prescription medication in the United States in 2010, earning its manufacturer, Pfizer, more than US$7 billion in total revenue.  Lipitor's patent expired in Jun 2011, and the first generic version entered the US market on 30 Nov 2011.

Historical data show that the price of generic simvastatin 1 month after market entry was 84% of the average brand-name price in the quarter before that entry, 81% after 6 months, and about 40% after 12 and 36 months.  On the basis of these trends, the authors project that the ratio of the price of generic atorvastatin to that of pregeneric brand-name Lipitor will be 0.82 at the time of market entry and 0.49 after the 6-month exclusivity period that is granted to the first generic product.  The overall cost savings from the availability of generic atorvastatin are projected to reach US$4.5 billion annually by 2014, equivalent to 23% of total expenditures on statins in that year.

However, an agreement between Pfizer and Ranbaxy delayed the introduction of the first generic atorvastatin to the US market by 5 months.  Pfizer also has an agreement to provide Watson Pharmaceuticals with Lipitor to sell (without the brand-name label) at an entry-level generic price, in return for a share of sales.

In Dec 2010, Pfizer launched a US$4 copayment card and an expanded 'Lipitor for You' programme to facilitate direct sales to patients through partnership with a specialty pharmacy for free home delivery, as another strategy for retaining Pfizer's market share, attracting new users, and limiting revenue loss.  Although the copayment card appears to provide a cost-saving solution for patients, health insurance companies may still be faced with the higher cost of the brand-name product.  However, after the 6-month exclusivity period ends increased generic competition is expected to cause generic prices to drop, and most patients will probably switch from Lipitor to generic atorvastatin.

The authors conclude that 'if Pfizer's agreements extending Lipitor's monopoly truly result in the provision of a brand-name drug at a generic price with savings realised by patients, pharmacy-benefits management and insurance companies and employers, the only short-term losers might appear to be the competing generics firms.  But without the possibility of gaining some atorvastatin market share, generics companies may forgo competition, preventing the typically sharp long-term decline in generic prices and resulting in a lost opportunity for reducing system-wide spending.  Whatever happens, Lipitor's generic transition should be watched closely, since Pfizer's strategies may set a new precedent for the other blockbuster drugs on the verge of losing their patents.'