Pfizer's efforts to sustain growth for Lipitor in the face of forthcoming competition from generic versions of Merck's Zocor will focus on educating payers about atorvastatin's positive impact on overall healthcare costs relative to simvastatin, CEO Hank McKinnell said Jan. 4.

"It's true there is some short-term benefit for the managed care plans switching from a patented Lipitor to a generic simvastatin, but we have compelling evidence...that that is penny wise and pound foolish," McKinnell said during the Morgan Stanley Pharmaceutical CEOs Unplugged conference in New York Jan. 4.

"Sure, you save a little money in the short-term, but if you don't like the high cost of health, try the high cost of sickness," he said. "It's a lot better to prevent heart attacks and strokes than treat heart attacks and strokes."

Pfizer is already facing a challenging reimbursement environment for Lipitor; Express Scripts has replaced atorvastatin with Zocor on its formulary in order to maximize adoption of generic simvastatin when the Merck product loses patent exclusivity in mid-2006 (¹ Also see "Pfizer Will Review Cholesterol Drug Category To Gauge Longevity Of Slowdown" - Pink Sheet, 24 October, 2005., p. 19).

Despite a slowing cholesterol market and competition from generic Zocor, Pfizer remains "very confident that Lipitor continues to grow next year," McKinnell said.

McKinnell asserted that Lipitor will benefit from increasing payer sophistication characterized by greater focus on managing overall healthcare costs rather than controlling drug costs.

In considering Lipitor's prospects for continued growth, he told the investors that they should focus on the fact that "managed care organizations are not really in the business of minimizing their drug cost, they are in the business of minimizing their total cost."

McKinnell pointed to large outcomes studies such as the Anglo-Scandinavian Cardiac Outcomes Trial (ASCOT) and the Incremental Decrease in Endpoints through Aggressive Lipid Lowering (IDEAL) trial as the type of evidence the firm will present to payers to demonstrate Lipitor's positive impact on total healthcare costs relative to Zocor.

The trial data show that "Lipitor provides added benefit...beyond the benefits of simvastatin - which are significant at 30%-35% reduction in risk of heart attacks and strokes and the expense of treating those heart attacks and strokes," he said. "It's been proven time and time again."

ASCOT showed a significant reduction in cardiovascular events with the lowest dose of Lipitor; Pfizer has suggested that the results from ASCOT compare favorably to Merck's 4S outcomes trial of moderate doses of Zocor (² Also see "Lipitor Scripts Rebounding, Pfizer Says; Cholesterol Category Still Has Life" - Pink Sheet, 23 June, 2003., p. 8).

IDEAL was designed to provide head-to-head evidence of Lipitor's superiority to simvastatin; however, the trial failed to meet its primary endpoint of demonstrating that the highest recommended dose of Lipitor provides incremental benefit over moderate doses of simvastatin (³ Also see "High-Dose Statins IDEAL For Use In High-Risk Patients, Study Suggests" - Pink Sheet, 21 November, 2005., p. 15).

While the trial did not demonstrate Lipitor's superiority over simvastatin, the IDEAL authors did conclude that the trial results support aggressive use of high-dose statins.

McKinnell asserted that patients cannot reach the LDL cholesterol levels recommended by most clinical guidelines with simvastatin alone.

"If you can get to LDL levels of 70 or 80 [with Lipitor] as opposed to 100, which you can probably do with simvastatin, there are significant additional benefits in risk reduction and the cost of treating the consequences of not reducing those risks," he added.

The Pfizer exec cited Lipitor's continued success in Europe despite competition from generic simvastatin as evidence of the persuasiveness of the data. Lipitor has faced competition from generic simvastatin in Europe for three years, he noted.

Bristol-Myers Squibb's Pravachol (pravastatin) "just got leveled by generic simvastatin as you might expect. The wheels just got blown off," he said. "But we've been able to demonstrate in several European countries that the benefits of Lipitor justify the additional cost."

McKinnell maintained that another downside of generic switch programs is that some patients go off therapy entirely and are thus more likely to experience expensive cardiovascular events.

"The most compelling number to me is if a managed care organization switches a patient from Lipitor to generic simvastatin, the first thing that happens is half the patients go off-therapy....So their risk doesn't go from Lipitor versus generic simvastatin, it goes from Lipitor versus nothing with half the patients, and that is profound."

Due to Lipitor's positive impact on overall healthcare costs, McKinnell characterized generic simvastatin switch plans as a "failed strategy" for managed care.

However, stand-alone Medicare prescription drug plan sponsors may be less inclined than other payers to consider total healthcare costs in making coverage decisions, since enrollees' non-drug healthcare costs are covered separately by Medicare.

The pending generic switch of simvastatin likely also affected Pfizer's Medicare Part D formulary positioning negotiations for Lipitor. Pfizer's statin has less favorable positioning than Zocor on the formularies of the 10 nationwide prescription drug plans (⁴ Also see "Merck Wins Part D Cholesterol Therapy Formulary Battle; Lipitor In Retreat?" - Pink Sheet, 12 December, 2005., p. 19).

Rather than focusing on Lipitor's less advantageous placement in the formularies of the nationwide plans, McKinnell highlighted that the agent is on the lowest brand cost-sharing tier of 85% of the 85 national and regional plans.

"What does that mean for the typical Medicare patient? Frankly, it means a $3 copay [for Lipitor] versus a $1 copay" for generic simvastatin, "so financially it's meaningless," McKinnell maintained.

However, the $3 and $1 copays apply only to Medicaid/Medicare dual-eligible beneficiaries with income below the federal poverty level. A beneficiary not eligible for special subsidies who is enrolled in a nationwide plan will pay between $12 and $28 more a month for a preferred brand than a generic.

McKinnell also maintained that the "Welcome to Medicare" physical included in the Medicare Modernization Act will positively impact the number of new scripts for Lipitor. Under MMA, Medicare will pay for a physical at the time a beneficiary enrolls.

"Remember, buried away within the Medicare Part D benefit is something called a 'Welcome to Medicare' physical, and it's so powerful that I think people have missed it."

"We are going to see a very powerful surge in the early detection, the early treatment of cardiovascular risk factors - number one is...LDL cholesterol, number two is blood pressure, number three is HDL" cholesterol, McKinnell said.

Tough Sell? Pfizer CEO Outlines Lipitor Game Plan For Generic Zocor

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