Lipitor OTC: What Next? (PFE, MRK, AZN, SNY, BMY, LLY, JNJ, AMGN)

Once patent protection expires on a prescription drug, the drug’s maker can take a serious beating in revenue and profitability. One way to make up for the loss is to get US Food & Drug Administration approval to sell a version of the drug over-the-counter. That’s what Pfizer Inc. Inc. (NYSE: PFE) wants to do with its Lipitor heart medicine, the best-selling medicine of any kind in the world. It won’t be easy.

The FDA has already given Merck & Co. (NYSE: MRK) a very tough time over the company’s application to sell its popular Lipitor-competitor Mevacor. Lipitor and Mevacor, both in the family of drugs known as statins, probably should not be as easy to push through the OTC approval process as a stomach-acid drug like Prilosec from AstraZeneca PLC (NYSE: AZN). A third statin drug, Plavix, which is sold by Sanofi-Aventis SA (NYSE: SNY) and Bristol-Meyers Squibb Co. (NYSE: BMY), loses its patent protection next year and could be yet another entry into the race for an over the counter heart medicine.

The list of patent expirations through 2012 includes Zyprexa, an anti-psychotic made by Eli Lilly & Co. (NYSE: LLY); Levaquin, an antibiotic, and Concerta, an ADHD/ADD drug, both from Johnson & Johnson (NYSE: JNJ); Protonix, an antacid from Pfizer; Seroquel, an antipsychotic from AstraZeneca; Singulair, an asthma drug from Merck; Actos, a drug to treat Type 2 diabetes from Takeda Pharmaceuticals; and Enbrel, an arthritis drug from Amgen Inc. (NASDAQ: AMGN). Plavix and Lipitor were the two leading drugs by sales in 2010, with more than $6.1 billion and $5.3 billion in sales, respectively.

According to the National Institutes of Health, Lipitor users need to be aware of any number of side issues and side effects when taking a the drug. Because the medicine essentially thins a person’s blood to prevent the buildup of cholesterol along the walls of blood vessels, the danger of improper dosage is non-trivial.

What Pfizer needs to do is convince the FDA that it is safe for a patient to self-prescribe Lipitor. Merck hasn’t been convincing and unless Pfizer can pull some magic rabbit out of its hat, there doesn’t appear to be much chance of getting FDA approval.

Merck has failed to get its statin drug approved, Pfizer is likely to fail, and the team of Sanofi-Bristol Meyers is equally likely to fail with Plavix. A generic equivalent of Plavix is already sold in Europe and if approved in the US, could undercut plans for Sanofi to introduce a generic equivalent.

Of the drugs losing patent protection in the next year or so, the antibiotic Levaquin and the antacid Protonix are the likeliest candidates for OTC sales. Antipsychotics over-the-counter? Not in this lifetime.

Paul Ausick