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December 01, 2011

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Listed below are links to weblogs that reference Pfizer's Lipitor: A New Model for Delaying the Effects of Patent Expiration:

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"Many of these strategies may call into question the incentive system created to foster the development of generic drugs, as they arguably extend Pfizer's patent monopoly beyond its expiration."

How are marketing strategies an extension of patent term? Ranbaxy is now free to compete, and in six months everyone else will be free to compete. As a result of that competition, Pfizer is lowering its price (and no one's asserting that it's dumping Lipitor on the market below cost). That's how things are supposed to work. If anything, this is proof that incentive system for generics *does* work.

Seems like the politicians are upset not because Pfizer did something wrong, but because Pfizer is acting intelligently, and worse, it isn't acting like the evil corporation that those politicos make all innovative drug companies out to be.

Is there any provision in Hatch-Waxman act that allows sharing and supplying of the drug from TEVA to Ranbaxy? Does a deal between Teva and Ranbaxy violate any one of the provisions in the Hatch-Waxman Act? or Irrespective of any provision, the act does not preclude such sharing and supplying of the two business entities that is one which is the holder of 180 days exclusivity in the USA (Ranbaxy) and the other generic company(Teva) which does not have such entitlement.

Is there any provision in Hatch-Waxman act that allows sharing and supplying of the drug from TEVA to Ranbaxy? Does a deal between Teva and Ranbaxy violate any one of the provisions in the Hatch-Waxman Act? or Irrespective of any provision, the act does not preclude such sharing and supplying of the drug between two business entities that is one which is the holder of 180 days exclusivity in the USA (Ranbaxy) and the other generic company(Teva) which does not have such entitlement.

It would seem to me that these actions easily cross over the bridge from patent law to anti-trust law.

The deep discounting may actually backfire, as people may realize that the patent holder has been gouging the public by charging prices that were only supported by the patent exclusivity effect.

I recognize that people in the industry recgonize that such profits support all those efforts on drugs that do not make it to the market place, but your average consumer does not care that his outrageous cost for a little pill is paying for something he is not getting, and the deep discounts show how much the consumer "should" have been paying for years.

Consumer advocacy groups can use this price disparity against the pharma companies, who have shifted normal business risk to the consumer through the inflated pricing afforded by the patent system.

Perhaps in the name of equity someone in the legislature will come up with the concept of fair pricing. For pharma patents, careful and accurate development records could be tied to how much a company could charge for a product. Flexibility could be achieved by allowing the producer to decide the payback period, but once that period is reached, pricing controls could be enacted and public gouging avoided.

As for "market-share," I think any projections based on current actions are more like angels dancing on the head of a pin.

Pfizer adopted the current posturing out of desperation and had few choices. Pharma model has been to develop and sell blockbusters and move on. The expired patents become generics product.

Pfizer has the manufacturing technology and can out price generics. It is trying to do that. It is too early to say that Pfizer strategy will pay off as that battlefield is getting ready.

Most of the BIG pharma should have done that to prevent generics coming in but they did not as their pipeline was delivering. Now the pipeline is sputtering and the Pfizer strategy is a natural.

In addition, Pfizer in latent terms is admitting that they might not have many revenue generators in the pipe.

Thanks.

Girish MALHOTRA

"The deep discounting may actually backfire, as people may realize that the patent holder has been gouging the public by charging prices that were only supported by the patent exclusivity effect." Really? Prices supported by exclusivity are precisely what patents are for. Nobody is going to be surprised by a 90% price reduction.

Were it not for patents, Lipitor would not exist at all. Thanks to patents, it does. For the term of the patent, Pfizer charged what the market would bear (a market where alternative drugs were available), and for the indefinite future we will enjoy its benefits at free market prices. The system is working as intended.

Pfizer's tactics going forward are subject to scrutiny: the line between leveraging their production advantages and illegally dumping product below cost is a thin one. That said, consumers certainly win if pricing is close to the actual cost of manufacture.

I have a problem with "rebates" and "incentives" paid to consumers who aren't paying the bulk of the cost of a drug. It's a mystery to me how the law can distinguish these from illegal kickbacks.

"Really? Prices supported by exclusivity are precisely what patents are for. Nobody is going to be surprised by a 90% price reduction."


Yes, Really.

James, you speak like a patent attorney - missing the heartbeat (and financial pain) of what the rest of the country is going through.

You quite missed the fact that I alluded to such with my comment of "I recognize that people in the industry recgonize that such profits support... but your average consumer does not care..."

What you view as "nobody" is the rather large bulk of people outside of the patent world who are affected with the real world prices of drugs (and who vote).

These "nobodies" don't care how the patent system has been set up and don't care if the drugs would not be there in the first place if there was not a patent system.

What they do care about is how much they have to spend for a drug they need to take. What they do care about is the PERCEPTION that they have been gouged when a price reduction of 90% happens only because of a patent protection stoppage.

This, more than any "exercising cat with a laser" patent, speaks to the patent system being broken, because THIS directly affects the individual and their immediate financial situation.

You need to get out of your patent law office and grab the pulse of the country if you want to understand the forces that will shape patent law in the future.

(my apologies as this seems overly personal - it is not meant to be personal, but I see this type of myopia far too often).

"What you view as "nobody" is the rather large bulk of people outside of the patent world who are affected with the real world prices of drugs (and who vote)."

Let me see if I get this. Voters may express a preference for immediate savings to themselves in the form of cheap drug prices now, after someone else has already invested in developing the drug, thus assuring no new drugs in the future, over the long-term sensible policy that gives drug developers monopoly rents for a limited time to encourage development of new drugs?

Wow! What a novel idea! Thanks for enlightening us, Skeptical.

/sarcasm off/

Don't Call Me MM,

Your sarcasm is at best misplaced, at worst disingenuous.

This is not Patently-O, so please make your comments mean something just a little bit more.

James' comments seemed to have been made in a patent-intensive-but-real-world-vacuum and represents a dangerous mindset to have, even on a patent board discussion thread.

Your comment, on the other hand, adds nothing of value, and that type of smarmy post is better left for other venues.

No cmment now, I need this material for my research.

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