Pfizer’s Latest Twist on ‘Pay for Delay’

Protecting Brand-Named Drugs

By Marian Wang
ProPublica, November, 14th, 2011, 2:41 pm

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Pharmaceutical companies have sought for years to protect their expensive brand-name drugs by paying generic rivals [1] handsome sums of money to put off efforts to introduce cheaper, generic alternatives that could steal market share.

Pay for Delay

The controversial practice, known as “pay for delay,” occurs as part of patent litigation settlements and typically buys a brand-name drug company more time to sell its blockbuster drug exclusively until its patent on the drug expires. Federal Trade Commission regulators have said the practice costs consumers an estimated $3.5 billion each year [2], and have pushed for a ban.

But now it appears the drug company Pfizer is adding yet another twist to its efforts to delay generic competitors. As The New York Times reports, the company seems to have struck a deal with certain pharmacy benefit managers — the middlemen in the pharmaceutical industry — to block generic versions [3] of Lipitor.

The Block Buster

Lipitor, Pfizer’s blockbuster cholesterol-lowering drug, is among the world’s best-selling pharmaceuticals, and this isn’t Pfizer’s first attempt to protect it.

In 2008, the company settled patent litigation [4] with Ranbaxy, an Indian generic manufacturer, striking a deal that guaranteed that Pfizer would not have to face challenges [5] from Ranbaxy’s generic version of Lipitor until the end of November 2011. Pfizer granted Ranbaxy some incentives [6] as part of the bargain but said it made no payments. Nonetheless, a group of pharmacies filed suit [7] against Pfizer and Ranbaxy last week over the deal, calling it “an extraordinary ripoff” and alleging price-fixing between the two companies.

Big Discounts

Now that it’s November 2011, Ranbaxy and other drugmakers are gearing up to offer cheaper versions of Lipitor. As The Times reports [3], Pfizer has tried to counter this competition by offering big discounts on Lipitor to the middlemen that process prescriptions [8] for pharmacies and other buyers, giving them discounts in exchange for having them block generic versions of Lipitor for another six months. Here’s The Times:

Many drugstores are being asked to block prescriptions for a generic version of Pfizer’s Lipitor starting Dec. 1, when the company loses its patent for the blockbuster cholesterol drug and generic competition begins.

Medco Health Solutions, among the nation’s largest pharmacy benefit managers, is one of the companies issuing instructions, seeking to have pharmacists keep filling prescriptions with the more expensive Lipitor for six months.

See some of those instructions [9] sent to pharmacies by the pharma middlemen. The documents were released by Pharmacists United for Truth and Transparency, a group of independent pharmacists. (We first noticed them posted at the blog Pharmalot [10].)

According to the group, Pfizer’s plan would mean that customers at the pharmacies serviced by these middlemen would receive Lipitor even when they’ve been prescribed a generic version. Because Lipitor co-pays would also be reduced to the level of generic co-pays, customers might not notice, but employers and Medicare Part D would pay the same amount as before, despite the availability of a cheaper alternative.


A Pfizer spokesman gave The Times a statement saying that the company was committed to ensuring that customers had access to Lipitor but declined to answer additional questions. We’ve also asked Pfizer for comment and will update when we hear back.


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Financial Independence Guidelines for Medical Professionals

A Common Sense Approach

By Rick Kahler; MS ChFC CCIM CFP®

Someday, the time will come to retire from medical practice and actively earning a living.

But, for many newbie physicians, it’s way out there in the future, something to plan for – “someday.” You’re often too busy with your lives, families and professional careers to pay much attention to it.

Late Starters

In some cases, that in-attention lasts until the 50’s or even 60’s. All of a sudden it hits you that “someday” is getting closer faster, and you aren’t ready. You don’t have anywhere near enough in savings and investments to provide a sufficient income when no longer practicing medicine, dentistry, podiatry, osteopathy, or optometry etc. Or, working as a nurse, medical technician, hospital or clinic administrator; or office manager, etc.

General Guidelines

If you’re in this situation, it’s time to get serious about planning for financial independence. But, don’t panic. Before you start pricing cat food at the grocery store, and hinting to your kids about moving in with them, try these strategies first:

1. Cut back now so you can be more comfortable later. Make saving and investing to become financially independent your primary goal. This means no new cars, no new toys, no expensive vacations, and no funding college educations for kids or grandkids. Take an inventory of your spending, then go over it together with your spouse to find all the places you can cut expenses. Create a spending plan focused on freeing up funds to invest for your future.

2. Consider downsizing now instead of later, but only if you can live more cheaply by doing so. If you can sell your house for, say, $550,000, buying something smaller for maybe $250,000, and investing the difference might be a smart move. This works best if you have substantial equity in your house, meaning it is paid for or your mortgage is small.

3. Get rid of debt. Stop using credit cards unless you pay the bill in full every month. Pay off credit card balances and any other personal debt.

4. If you and your spouse are both working, pretend one of you loses your job and you have to live on one income; then put the second income toward saving and investing to become financially independent. A spouse who isn’t employed might consider getting a job solely for saving and investing.

5. Accept the reality that you’re probably going to need to postpone retiring from practice. If you enjoy your work, you might be happy to stay employed for a few more years. If you don’t, look into possibilities for changing careers now. This blog will help. Or, you might make plans for a second non-clinical career after you retire from your current one.

6. Take an inventory of your assets. Include your savings accounts, investments, and retirement plans. Don’t forget to include your Social Security income (yes, it will be there if you are over 55) and assets like a paid-for house or valuable personal property. Add in hobbies, skills, or interests that might bring in some part-time income. Also, include intangible assets like health, family, and friends. These may not affect your finances directly, but they have a great deal to do with your well-being.

7. Remember to enjoy the present. You may be cutting back on your spending, but don’t discourage yourself by cutting back so much that life – in the here and now – is bleak. Find creative and inexpensive ways to stay involved in activities that are important to you and enjoy time with friends and family.


Don’t waste time and energy beating yourself up because you didn’t start saving earlier. Instead, give yourself credit for what you are doing now. Remember, you aren’t depriving or punishing yourself. You’re investing in yourself in order to build a more comfortable future.

The Author

Rick Kahler, Certified Financial Planner®, MS, ChFC, CCIM, is the founder and president of Kahler Financial Group in Rapid City, South Dakota. In 2009 his firm was named by Wealth Manager as the largest financial planning firm in a seven-state area. A pioneer in the evolution of integrating financial psychology with traditional financial planning profession, Rick is a co-founder of the five-day intensive Healing Money Issues Workshop offered by Onsite Workshops of Nashville, Tennessee. He is one of only a handful of planners nationwide who partner with professional coaches and financial therapists to deliver financial coaching and therapy to his clients. Learn more at


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