Lipitor: How Far Should Pfizer Push The Pill?

            
 
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Case Details:

Case Code : MKTG140
Case Length : 27 Pages
Period : 1995-2006
Organization : Pfizer Inc.
Pub Date : 2006
Teaching Note : Available
Countries : USA, Europe
Industry : Pharmaceuticals

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Lipitor also had its share of legal battles with generic manufacturers. Pfizer was engaged in patent litigation over Lipitor in many countries against the Indian drug company Ranbaxy Laboratories Ltd. (Ranbaxy). The original patent of Lipitor was upto 2006, but Warner-Lambert (WL) who owned the patent then, had managed to extend it to 2011 by adding a calcium salt to Atorvastatin. Ranbaxy challenged the Lipitor patent saying that it was invalid. Ranbaxy contended that the molecule for which the second patent was awarded was very similar to the first patent and should not have been issued at all.

It said Pfizer had deliberately misrepresented some details in its patent claim. In the court battles that followed, Pfizer prevailed over Ranbaxy in the US, the UK, Norway, Romania and Peru. However, Ranbaxy tasted success in April 2006, when a five-judge panel of the Supreme Patent and Trademark Board of Austria unanimously affirmed an earlier ruling invalidating Pfizer's claims for patent protection of Lipitor in Austria. Another cause of concern was the slowing down of sales of Lipitor after October 2005. Analysts attributed this slackening of sales to product substitution as more patients were being put on competitor brand Zocor (Simvastatin) by doctors, as they were expecting a low-priced generic version of Zocor to come on the market soon.

Zocor was scheduled to go off-patent on June 23, 2006. The launch of Pfizer's combination drug of Torcetrapib/Lipitor was delayed beyond its 2008 scheduled date. Some analysts said it would not be launched before 2010, and this delay was expected to be a major setback for Pfizer. Pfizer denied the allegations about improper marketing of Lipitor. The company said that it took its responsibility of providing appropriate information to the medical profession and patients seriously and complied with all federal laws and regulations while marketing its drugs.

A Pfizer spokesman said that the case was without merit. Pfizer also vowed to contest the lawsuits regarding Lipitor's alleged side-effects in an aggressive manner when they came to court as the allegations lacked any scientific basis.

Pfizer was also optimistic about Lipitor's prospects in 2006. The company had set a global sales target of US$ 13 billion for Lipitor in 2006, i.e., a growth of 6.5 percent over the previous year. The company announced that despite the challenges, it was adopting an aggressive marketing strategy and was confident of achieving the targets set.

Pfizer's chairman and CEO, Henry A. McKinnell (McKinnell) said, "We are committed in our efforts to reach our full-year revenue goal for Lipitor, although it is an aggressive target given a challenging environment and a slower-than-hoped-for start to the year." However, some analysts felt there was insufficient basis for such optimism.

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