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As many of you may know, Ranbaxy was involved in a bitter patent dispute with Pfizer over Lipitor, Pfizer’s blockbuster multibillion, dollar anti LDL-cholesterol drug. Ranbaxy was challenging the validity of Pfizer’s intellectual property estate for Lipitor which would have extended patent protection for the drug until 2013 or longer. The patent dispute began after Ranbaxy filled an ANDA with the US Food and Drug Administration to sell generic Lipitor after uncontested Lipitor patents expire in early 2010.

Conventional wisdom suggested that Pfizer would ultimately lose the patent dispute and that Ranbaxy would be able to immediately flood the market with a much cheaper generic version of Lipitor. This would have an enormous negative impact on Pfizer’s financial stability and its future (Lipitor had $12.8 billion in sales in 2007). Nevertheless, untilDaiicho-Sankyo announced its intention to acquire Ranbaxy last week, Pfizer was willing to gamble and run the risk of losing the lawsuit. Apparently, Ranbaxy impending sale was enough of an impetus for Pfizer to settle the patent dispute which has grown increasingly acrimonious over the past year or so.

According to agreement (which needs to be approved by the US Federal Trade Commission), Pfizer was able to get Ranbaxy  to agree to delay the release of generic Lipitor until November 2011 — up to 20 months later than many analysts had been expecting (some insiders believed that generic Lipitor could reach the market as early as March 2010). Further, as part of the agreement, Pfizer will allow Ranbaxy to sell its version of Lipitor in Australia, Canada, Belgium, Germany, Italy, the Netherlands and Sweden two to four months before Liptor’s patents expire. This is likely the sweet part of the deal for Ranbaxy because all of the above mentioned markets are top sellers for anti-cholesterol drugs. Finally, because Ranbaxy was the first to file an ANDA for generic Lipitor with the FDA, it will get 6 months of market exclusivity guaranteed (in the Hatch Waxman Act) to a generic manufacturer that is first to file for generic production of a brand name drug nearing patent expiry.   However, after quickly perusing the terms of the deal, I think that it more closely resembles an authorized generics deal rather than a “true” competitive generics launch.

Currently, Lipitor costs about $2.50 to $3 a day. Analysts predict that Ranbaxy can sell its generic Lipitor for about 75 cents to $1 a day, or as low as 10 cents a day at some discount pharmacies. The potential drastic price reduction coupled with Daiichi-Sankyo’s intention to purchase Ranbaxy (which would have provided Ranbaxy with more money underwrite and press on with IP lawsuit, it what I believe forced Pfizer’s hand to act as quickly as it did to settle the suit. The deal, if approved, allows Pfizer to dodge a near fatal financial bullet and will provide it with a potentially lucrative revenue stream from it authorized generics deal that it struck with Ranbaxy. 

Nevertheless, given the financial stakes associated with the Lipitor franchise, it may make more sense for Pfizer to purchase Ranbaxy rather than enter into the pending deal. Also, a Ranbaxy purchase would allow Pfizer to enter the biologics and biotechnology fields—something that Pfizer executives have been talking about publicly to insure the company’s future. Like most other pharmaceutical generics manufacturers, Ranbaxy has active research programs on biosimilar and other biotechnology products. If I was driving the boat at Pfizer I would offer Ranbaxy a lucrative counteroffer to block its sale to Daiichi-Sankyo. I don’t know—the deal just makes sense to me. That said, not many recruiters have been calling me about CEO jobs lately!!!!!!

Until next time…

Good Luck and Good Job Hunting!!!!

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Rumor has it that Pfizer may offer a counteroffer to acquire India-based generics manufacturer Ranbaxy. As you may recall, Japan’s Daiichi Sankyo agreed earlier in the week to pay about $4.6 billion for a controlling interest in Ranbaxy. According to reports many analysts expect Pfizer to attempt to queer to the Daiichi-Ranbaxy deal because “it is battling Ranbaxy in about 18 countries on patent rights of Lipitor, the largest selling cholesterol drug in the world. Lipitor has annual sales of $13 billion. In most countries the patent on the drug will expire starting 2011.”  Ranbaxy has won favorable court decisions on Lipitor in many countries including in the US, the largest drug market in the world, which accounts for 28 per cent of the global generic market estimated at $72 billion.

I tend to agree with the pundits. Pfizer has a lousy pipeline and its recent clinical trial record is horrendous. Consequently, the company must hang on (as long as possible and at any cost) to its blockbuster brands to avoid financial ruin.

Stay tuned for late-breaking news and updates!

Until next time…

Good Luck and Good Job Hunting!!!!!

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No doubt that many of you already know that DTC advertising is an effective way for pharmaceutical companies to “push” their drugs. However, when I saw the amount of money that was spent on DTC in 2007 I was shocked! In 2007 alone, drug companies spent $5,375,117,382 on advertising. Yes, that's $5.375 billion dollars (think of how many research grants could have been funded or how much money could have been spent on universal healthcare!).  The aggregate ROI for 25 pharma companies examined was impressive–totaling about $32 billion or roughly 7-fold!

A table published by Consumer Reports AdWatch highlights 25 of the biggest spenders along with their sales, giving an indication of how much their ad spending has paid off —or not! The drugs that received the biggest bang for the buck are bolded. Despite the conflict of interest and false advertising DTC flap over Lipitor, it still managed to have the third best return among the 25 products analyzed.

Drug	Approved for1	DTC advertising 20072	Retail sales 20073	Sales per ad dollar spent
Lunesta	Insomnia	$294,180,616	$712,740,000	$2.42
Ambien CR	Insomnia	$204,065,972	$876,028,000	$4.29
Cymbalta	Anxiety, depression, diabetic neuropathy pain	$183,336,687	$1,732,827,000	$9.45
Lipitor	High cholesterol	$180,866,960	$6,165,531,000	$34.09
Plavix	Stroke risk reduction	$174,942,656	$3,082,712,000	$17.62
Rozerem	Insomnia	$171,466,210	$116,658,000	$0.68
Cialis	Erectile dysfunction	$151,649,663	$453,233,000	$2.99
Vytorin	High cholesterol	$140,715,035	$1,938,882,000	$13.78
Nasonex	Seasonal allergies	$131,220,183	$892,534,000	$6.80
Advair Diskus	Asthma	$121,197,100	$3,390,766,000	$27.98
Boniva	Osteoporosis	$112,958,755	$404,109,000	$3.58
Zetia	High cholesterol	$110,357,144	$1,405,066,000	$12.73
Requip	Restless Legs Syndrome, Parkinson's disease	$106,271,994	$407,665,000	$3.84
Abilify	Bipolar disorder and schizophrenia	$105,768,412	$1,781,562,000	$16.84
Flomax	Enlarged prostate	$100,969,013	$1,002,163,000	$9.93
Nexium	Heartburn and GERD	$96,960,417	$4,355,901,000	$44.92
Valtrex	Herpes and shingles	$88,409,332	$1,395,313,000	$15.78
Spiriva	Chronic obstructive pulmonary disease	$84,002,514	$868,226,000	$10.34
Yaz	Contraceptive pill	$83,566,746	$254,592,000	$3.05
Viagra	Erectile dysfunction	$83,064,378	$824,946,000	$9.93
Lyrica	Fibromyalgia and neuropathic pain	$70,663,685	$1,000,069,000	$14.15
Chantix	Smoking cessation	$63,979,755	$764,723,000	$11.95
Singulair	Asthma and seasonal allergies	$63,289,786	$2,863,326,000	$45.24
Celebrex	Pain from conditions like osteoarthritis	$55,230,236	$1,416,084,000	$25.64
Zyrtec	Seasonal allergies	$38,476,595	$1,302,807,000	$33.86

¹Consumer Reports Consumer Drug Reference, 2008.
²Data compiled by Nielsen Media research, March 2008.
³Data provided by Drug Topics and Verispan, March 2008.


No wonder why everybody wants to work for a pharmaceutical company–despite the downsizing there is still substantial money to be made!

Until next time….

Good Luck and Good Job Hunting!!!!!!

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Pfizer the world’s largest and least innovative pharmaceutical company  announced yesterday that its profits dropped by 18% last year. The company attributed the loss to reductions in the sale of its blockbuster anti-cholesterol drug Lipitor, which is slated to lose patent protection in the next few years.

Pfizer, which has about $25 billion in cash, has been on something of a buying spree the past couple of years. The company is desperately trying get into biotechnology (too little, too late?) and believes, as it always has, that the best way to enter a new therapeutic area is to buy its way into it! To that end, Pfizer has already purchased two “biotech” companies in 2007 (more purchases are likely on the way) and entered into financially-lucrative, long term research collaborations with several others. Although this strategy has previously worked for Pfizer in the short term, it has proved to be financially disastrous for the company in the long term. Nevertheless, Pfizer said it still expects earnings this year to grow about 11%, due largely to a cost-cutting program that has eliminated 25,000 jobs, or 23% of its work force since 2004.

Until Pfizer executives realize that a robust internal drug discovery and development program is the key to success, Pfizer will continue to be the world’s biggest pharmaceutical company with a constantly flagging stock price.

Until next time….

Good Luck and Good Job Hunting!!!!!!!!!!!!

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I am old enough to remember when the artificial heart was invented and used to extend the life of Barney Clark, a dentist in Seattle, WA. It was a phenomenal accomplishment back in the day. So, it seemed appropriate to me that Robert Jarvik, the guy who invented the artificial heart, appeared in Pfizer’s Lipitor ads as a spokesperson to promote heart health. However, a Congressional committee examining consumer drug advertising has questioned whether the Lipitor ads may have misrepresented Dr. Jarvik and his credentials to promote the drug.

Although Dr. Jarvik has a medical degree, he is not a cardiologist nor is he licensed to practice medicine! Further, one television ads depicts Dr. Jarvik as an accomplished rower but the ad used a body double for him and, as it turns out, he does not even row! To make matters worse, a former colleague of Jarvik contends that he is not the actual inventor of the artificial heart. He suggested that the distinction belongs to Jarvik’s mentor Willem J. Kolff and his associate Tetsuzo Akutsu at the University of Utah. Go figure! Despite the firestorm, Pfizer continues to air the television ad ( I saw it just a few days ago).

Pfizer has spent more than $258 million advertising Lipitor (a cholesterol-lowering statin) since January 2006, most of it on the Jarvik campaign in an attempt to protect Lipitor from generic competition. Lipitor is the world’s best selling drug and generated $12.7 billion in revenues in 2007. While Lipitor has patent protection until 2010, some patients have already switched to a generic version of a competing cholesterol drug Zocor. According to published reports Pfizer agreed to pay Jarvik about $1.35 million under a two-year contract that expires next month. I think it is safe to assume that Jarvik will not appear in any future Lipitor ads.

As many of you may know, drug companies FDA is not required to review direct-to-consumer ads before they are aired to the American public. While some companies request FDA review of their promotional materials before they are used in advertising campaigns, the vast majority of companies do not. Unfortunately, because of this regulatory loophole, direct-to-consumer advertising has turned into something of a cat and mouse game–there are only consequences and penalties if you get caught misrepresenting or not fully disclosing information about your products.

In my opinion, Pfizer’s misrepresentation of Jarvik’s credentials (and Jarvik’s complicity) is unethical and unconscionable. More importantly, it demonstrates how easily and willing companies are to “bend the truth” to preserve blockbuster drug franchises that generate billions of dollars in annual revenues. I think that what Pfizer did was wrong and shameful. The company should be fined and sanctioned for the Lipitor campaign. That said, it is likely that the size of the fine levied by FDA will pale in comparison to Lipitor revenues generated by the Jarvik campaign. I believe that it is time for Congress and FDA close the loopholes in current direct-to-consumer advertising regulations–the safety and health of the American public depends on it!

Until next time….

Good Luck and Good Job Hunting!!!!!!!

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