This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Pfizer's Drug Problem: Lipitor

Pfizer faces a daunting task because generic Zocor is now sold by 11 companies, and that means intense price competition. Customers of course find the idea of paying less hard to resist.

A recent Bear Stearns report says the annual wholesale acquisition cost for generic Zocor is $20 to $58 depending on the dose. The annual cost for Lipitor is $874 to $1,246. The wholesale acquisition cost is the list price charged by drugmakers to wholesalers or direct purchasers, excluding discounts or rebates. Meanwhile, the annual cost is $913 for Zetia, $983 for Vytorin and $945 for Crestor.

Pfizer has two ways to defend Lipitor. It can cut prices and offer rebates to protect its prescription-market share, or it can raise prices to prop up revenue as prescriptions slip.

For now, it's doing both. In January, it raised Lipitor's price by 5%, and Pfizer attributed its first-quarter sales gain from the product to the price hike.

On May 30, it also signed a deal with Express Scripts, (ESRX) to offer rebates on Lipitor. In return, the giant pharmacy benefits management firm placed Lipitor back on its list of preferred brand-name drugs, meaning its customers will pay less out of pocket.

Managed care firms usually have three tiers of products. Generics, which require the lowest copayments, are in Tier 1. Preferred brand-name drugs are in Tier 2, and nonpreferred drugs are in Tier 3 and carry the highest copayments.
3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AZN $28.96 0.00%
BMY $72.18 0.00%
MRK $54.84 0.00%
PFE $32.71 0.00%
AAPL $93.74 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs