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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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"This is a classic case of unjust enrichment. Pfizer has built colossal sales of Lipitor through the pipeline of third-party payors1 such as our clients and countless other drug plans - including Medicaid2 and Medicare3 - much of it based on prescriptions that the FDA's4 guidelines say never should have been written in the first place." 5

- Jay Eisenhofer of Grant & Eisenhofer, P.A.6 , in March 2006.

"Pfizer has and continues to take seriously its responsibility to provide appropriate information to physicians and patients and to comply with all federal laws and regulations regarding the promotion of our medicines. Based on the information provided to us, we believe there is absolutely no merit to the claims regarding the promotion of Lipitor." 7

-Pfizer Inc. in March 2006.

Lipitor Marketing - Under A Cloud

In March 2006, some labor unions in the US sued Pfizer Inc. (Pfizer), the largest pharmaceutical company in the world, accusing it of fraudulent marketing of its cholesterol-reducing drug,8 Lipitor (Atorvastatin). In a class-action suit,9 the plaintiffs accused Pfizer of off-label10 promotion of Lipitor, which led to the unions and other third-party payers, as well as Medicaid plans at the state-level in the US, paying billons of dollars in unwarranted Lipitor prescriptions between 2001 and 2006. They claimed that Pfizer had illegally marketed Lipitor to people who had high blood cholesterol but with low risk of heart attack. 

In such cases, according to federal guidelines, only lifestyle modifications like diet and exercise were warranted. The US Attorney's Office in Brooklyn, New York, USA, was investigating Pfizer's marketing practices for Lipitor. Pfizer denied the allegations of off-label marketing and said that there was no merit to the case. They also announced that they were fully co-operating with the federal investigation.

With sales of US$ 12.2 billion in 2005, Lipitor was the largest selling pharmaceutical brand in the world. The huge success of the brand was attributed to Pfizer's strong marketing efforts. But in late 2005 and early 2006, Pfizer's marketing of Lipitor came under close scrutiny.

In early 2005, its decision to combine its experimental drug11 Torcetrapib with Lipitor12 raised concerns as it was seen as a ploy to extend the patent of Lipitor which was due to expire in the year 2011.

In September 2005, a class action suit was initiated by consumer advocacy groups against Pfizer for promoting Lipitor to women and the elderly.

The plaintiffs accused Pfizer of deceptive marketing as there was no evidence that Lipitor reduced the risk of heart disease in these segments of the population.

Pfizer was also a subject of national debate in the US for its direct-to-consumer (DTC) advertising of Lipitor. In April 2006, the Prescription Access Litigation Project13 (PAL), which draws attention to pharmaceutical companies that promote prescription drugs "excessively", gave its Bitter Pills award under the "Got Cholesterol?"14 category to Pfizer, for its DTC advertising of Lipitor.

In June 2006, two people sued Pfizer accusing it of withholding information about the potential side-effects of Lipitor. They alleged that Lipitor's side-effects included serious problems such as memory loss and damage to the nervous system.

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1] The person by whom a note or bill has been or should be paid (also known as payer). (Source: Merriam-Webster's Dictionary of Law, www.dictionary.reference.com)

2] In the US, Medicaid is a program managed by the states and funded jointly by the states and the federal government to provide health insurance for individuals and families with low incomes and resources.

3] Medicare is a health insurance program administered by the US government, that covers people who are either aged 65 and over, or who meet other special criteria (e.g. disabled).

4] FDA or the Food and Drug Administration of the US is the government agency responsible for regulating food (human and animal), dietary supplements, drugs (human and animal), cosmetics, medical devices (human and animal), biologics, and blood products in the US. It approves drugs for certain indications and provides guidelines for use of the drugs.

5] "Off-label Marketing for Lipitor's Now the Focus of a Class-Action Suit," www.pharmamanufacturing.wordpress.com, March 30, 2006.

6] Grant & Eisenhofer, P.A., based in Wilmington, Delaware, USA, founded in 1997, is a law firm experienced in handling civil suits in state and federal courts across the US. It was founded in 1997.

7] Jim Edwards, "Teamsters Sue Pfizer over Alleged Illegal Marketing," www.brandweek.com, March 28, 2006.

8] Cholesterol is a fatty substance synthesized in the human body. Increased level of cholesterol in the blood is associated with a high risk of heart diseases. A number of drugs are used to reduce the level of cholesterol. Of these, the statins were the most popular. Lipitor belongs to the statin group of drugs.

9] A class-action suit is a lawsuit brought by one or more plaintiffs on behalf of a large group of others who have a common interest. (Source: www.thefreedictionary.com)

10] In the US, the FDA requires numerous clinical trials to prove a drug's safety and efficacy in treating a given disease or condition. If satisfied that the drug is safe and effective, the drug's manufacturer and the FDA agree on specific language describing dosage, route and other information to be included on the drug's label. Off-label use is the practice of prescribing drugs for a purpose outside the scope (most often concerning the drug's indication) of the drug's approved label. Though off-label use of a drug by a doctor is not illegal, it is illegal for the marketer to promote or market an off-label use of the drug.

11] A drug still in the experimental development stage.

12] Torcetrapib is a drug that was being developed to treat elevated cholesterol levels and prevent heart disease. It results in higher levels of "good" cholesterol and lower levels of "bad" cholesterol. As its action complements that of Lipitor, Pfizer planned to launch it as a combination pill that was expected to be very effective in the treatment of elevated cholesterol levels.

13] PAL, established in 2001, is a national coalition in the US of around 120 organizations, including consumers, seniors, healthcare, labor, legal services, women's health and human service groups. It works to make prescription drug prices more affordable for consumers, using class-action litigation and public education. (Adapted from www.prescriptionaccess.org)

14] The "Got Cholesterol?" award was one category of the 2006 Bitter Pills Awards for "overpromoting expensive brand-name statins." It is a clever take on the US dairy industry's famous marketing campaign titled "Got Milk?"

 

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