The War over Lipitor perfectly illustrates the high-stakes fight often waged by pharmaceutical companies over designer drugs that reap billions of dollars in profits in the marketplace.
The Food and Drug Administration has come under increasing fire for doing a poor job of protecting American consumers from dangerous drugs or defective medical products. Whether it’s the high-profile case of Avandia — a dangerous diabetes medication it took years to sanction — or the recent recall of the defective DePuy Hip Replacement System, patients are not being afforded enough protection in the medical marketplace.
Those are far from rare examples. Other pharmaceuticals with questionable history include Vioxx, Darvon/Darvocet and Accutane.
The FDA relies upon the testing of pharmaceutical companies to determine a drug’s market worthiness — the next billion dollar breakthrough is safe because the company says so — and such testing is often done in third-world countries, far from the preying eyes of regulators. The agency has also been accused of playing politics with the approval process.
Now CNN reports that Lipitor — the world’s biggest blockbuster prescription medication — is set to go on sale by the end of the year.
Pfizer is losing patent protection on its vaunted cholesterol-fighting statin. But the controversy rests with Ranbaxy, India’s largest pharmaceutical company, which had been expected to launch its generic in the United States on Nov. 30. Federal rules would give the world’s 12th largest generic maker a six-month window in which it would have the exclusive rights to market and sell a generic.
However, the FDA accuses Ranbaxy of fraudulent conduct over a period of years, including fabricating data in drug applications, shortcutting quality tests and violating manufacturing standards. So grave were the violations that the FDA barred the company from importing more than 30 different drugs in 2008. Federal prosecutors continue to negotiate civil and criminal penalties that could top $1 billion.
The company’s leading generics in the United States include Valtrex (for herpes), Aricpet (for Alzheimer’s) and Zocor (cholesterol). It has denied misconduct and contends it is cooperating with the federal government.
Meanwhile, generic makers are “feuding like greedy relatives at Lipitor’s graveside,” as CNN puts it. One company, Mylan, has even sued the FDA, alleging that the government’s indecision has crimped the ability of competitors to plan.
At stake is that six-month window, during which a generic typically charges 70 to 80 percent of the name-brand price. After that, competitors typically join the party and the price drops to just 5 percent of the original drug’s price.
Analysts estimate that could amount to $600 million in this case. In 2010, that would have been good enough to amount to about one-third of the company’s entire gross revenue of $1.9 billion.
The Ferraro Law Firm provides comprehensive legal services, including representation of patients injured or killed by dangerous drugs or defective products. Call 1-800-275-3332 for a free and confidential consultation. Offices in Miami, Washington, D.C., and New York City.