UnitedHealth Chooses Pfizer’s Lipitor Over Generic Versions

By Drew Armstrong - Nov 18, 2011 12:41 PM CT

 

UnitedHealth Group Inc. (UNH) will charge a lower co-pay for Pfizer Inc. (PFE)’s cholesterol pill Lipitor than it does for generic copies for the next six months, taking advantage of a price reduction from the drugmaker.

UnitedHealth, the largest U.S. health insurer by sales, will pass on to customers savings it will receive when Pfizer reduces the price of the drug after Lipitor loses patent protection, Tyler Mason, a spokesman for Minnetonka, Minnesota-based UnitedHealth, said in an e-mail.

The move adds to agreements Pfizer has been making with insurers and pharmacy benefit management companies to keep as much of the market for the cholesterol drug as it can once the drug’s U.S. patent ends at the end of this month. Lipitor, Pfizer’s top-selling drug, generated $10.7 billion in 2010.

“UnitedHealthcare works diligently to keep down pharmacy costs for members and customers by providing the lowest net price, which is why we have placed Lipitor in the cheapest tier,” Mason said in an e-mail.
UnitedHealthcare has 9.5 million individuals, according to the company. After Nov. 30, the insurer’s customer will pay about $30 to $35 for brand-name Lipitor, compared with $50 to $60 for the generic, Mason said.

After six months, the co-pay on the copycats will drop to about $15 as more generic competitors begin selling the pills, said Lynne High, a UnitedHealth spokeswoman. The co-pay for Lipitor at that point will depend on Pfizer’s pricing, she said.

Three-Way Competition

Generic versions made by Watson, based in Parsippany, New Jersey, and India’s Ranbaxy, will compete exclusively with Pfizer for six months. After that, other generic-drug makers are allowed to enter the market.
Pfizer, based in New York, has already reached a Lipitor agreement with Coventry Health Care Inc. (CVH) for 1.2 million of that insurer’s patients. Medco Health Solutions Inc. (MHS), which administers Coventry’s pharmacy benefits, will block sales of generic copies, according to documents describing the agreement.
UnitedHealth’s employer plans, where the insurer only administers benefits, have also been offered the lower co-pay and most have accepted, High said.

Pfizer declined to comment specifically on any agreements with insurers and pharmacy benefit managers, only to say that it’s been working to keep patients on the brand-name version.

“Our programs, which are designed to offer Lipitor at or below generic cost during the 180-day period, will not increase costs for the significant number of payers participating in our programs,” Mackay Jimeson, a Pfizer spokesman, said in an e- mail.

The UnitedHealth agreement was reported earlier in the Wall Street Journal.

To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net;