Loss of Exclusivity of Pfizer’s Lipitor Will Also Impact AstraZeneca (AZ)

Rightfully, much has been made of the expiration of Pfizer’s US patent for Lipitor (generic name: atorvastatin), which will occur by the end of this year.  Lipitor is the most notable of the statin class of lipid-lowering drugs, compounds that have helped to lower the rates of heart disease-related deaths around the world.  Lipitor’s commercial success was unprecedented.  At its peak, it had worldwide sales in excess of $13 billion dollars annually.  Even with its patent expirations in recent years in various parts of the world, it still rang up $10.7 billion in 2010 keeping it the world’s number one selling drug.

Lipitor’s success can be attributed to a number of factors, but most notably the large (and expensive!) clinical trials Pfizer carried out over a number of years that showed how the treatment of patients at risk of heart attacks and strokes have greatly reduced incidents of adverse events when treated with Lipitor when compared to placebo.  Its efficacy, coupled with its remarkable long-term safety profile, have made Lipitor a household name.

In November, when the US patent expires, generic drug makers will be able to begin selling atorvastatin (the active ingredient in Lipitor) and they will do so at greatly reduced prices.  It is not unusual for the costs of generic drugs to be 10 – 20% of what the branded drug costs.  Thus, Pfizer’s sales of Lipitor will drop dramatically, as pharmaceutical industry analysts have noted for the past few years.

What does this have to do with AstraZeneca?  Well, AZ sells its own statin, Crestor (generic name: rosuvastatin), and with 2010 sales of $5.6 billion, it is a major product for the company.  AZ has always touted Crestor as the superior compound with slightly better lowering of LDL (“bad cholesterol”) and slightly better elevation of HDL (“good cholesterol”).  Unfortunately for AZ, Lipitor had been on the market for a number of years before Crestor made it, and the differences in cholesterol modulation between the two drugs was not significant enough for physicians, who were already very familiar with Lipitor, to switch their patients to the newer drug.  Thus, Crestor, while still an important and heavily prescribed drug, trailed Lipitor.

But with Lipitor going generic, AZ has a major problem – one that is a reflection of the cost-consciousness of health care systems.  The generic price of atorvastatin will likely be one-tenth of the cost of Crestor.  Thus, payers–insurance companies, Medicare, etc.–will insist that patients newly diagnosed as needing a cholesterol lowering agent be prescribed the less expensive atorvastatin rather than Crestor.  Even more concerning will be those health care plans that will try to have their Crestor patients switched to atorvastatin in an attempt to reduce their costs.  The arrival of generic atorvastatin, therefore, not only impacts Pfizer, but might also cause a drop in Crestor sales as well.

AZ has been acutely aware of this issue for years and has tried to take steps to differentiate its drug from atorvastatin.  Interestingly, Crestor has a biologic property that differentiates it from atorvastatin – it lowers an inflammatory marker call C-Reactive Protein (CRP).  CRP is associated with a variety of inflammatory conditions, including inflammation of the arteries.  Scientifically, it is thought that high levels of cholesterol damage arterial walls and the process of repairing the artery wall results in the beginning of atherosclerosis.  High CRP levels could therefore be a signal of early atherosclerosis.

For unknown reasons, Crestor lowers CRP levels and this distinguishes it from other statins.  Is this medically significant?  AZ thought so and to prove it thecompany ran the SATURN trial.  This study  compared Crestor directly with Lipitor in measuring the build-up of plaque in the arteries of patients with heart disease.  AZ’s thinking, and hope, was that the differences in the biochemical profile of Crestor vs. Lipitor would translate into a meaningful clinical difference in slowing the progression of atherosclerosis.  If the theory held up, it would be a great result as AZ would be able to clearly show that Crestor was the superior agent.

The first results of the SATURN trial are in and, while Crestor showed encouraging trends in reducing the fatty deposits in arteries, the results were not statistically significant from the results seen with Lipitor.  AZ will be reviewing these results in depth at the upcoming American Heart Association Meeting in November.  But for now, the claim of Crestor’s superiority will likely be nullified.  In the face of the dramatic drop in price for generic atorvastatin, it will be hard for physicians to justify prescribing the less costly drug.

The Lipitor patent expiration won’t just impact Pfizer’s net sales in 2012; AZ’s Crestor sales are also going to feel the impact.