Express Scripts to pull Pfizer drugs
Wednesday 5 October 2005, 3:53pm EST
NEW YORK, Oct 5 (Reuters) - Pharmacy benefits manager Express Scripts Inc. (ESRX.O: Quote, Profile, Research) said on Wednesday that it is pulling some of Pfizer Inc.'s (PFE.N: Quote, Profile, Research) most popular drugs from its preferred formulary in 2006, giving preference to cheaper generics and rivals.
Included on the hit list are cholesterol fighter Lipitor, the world's best-selling prescription drug; the blood pressure medicine Norvasc; blood pressure/cholesterol combination drug Caduet; Viagra, the top-selling erectile dysfunction treatment; and incontinence medicine Detrol/LA .
"The conspicuous exclusion of nearly all of Pfizer's major products from the Express Scripts National formulary indicates to us that this PBM has adopted a very aggressive stance, requiring pricing concessions that perhaps Pfizer was unwilling to accept," wrote Deutsche Bank analyst Barbara Ryan in a research note on Wednesday.
Co-pays that patients are required to pay for non-preferred drugs are significantly higher -- sometimes twice as much -- than for those on the preferred formulary list.
Pfizer said it could not comment on the reasons for the end of its contract with Express Scripts for many of its drugs.
"We are certainly concerned that Express Scripts' decision means that patients and doctors may have less choice of medicines or be forced to spend more to stay on medicines that have proven beneficial," Pfizer spokesman Jack Cox said.
Merck & Co.'s (MRK.N: Quote, Profile, Research) cholesterol medicine Zocor will be on the preferred list for next year in anticipation of the mid-year availability of generic Zocor, or simvastatin, as that drug's patent protection runs out, Express Scripts said.
"The availability of a generic version of Zocor in June 2006 provides an historic cost-saving opportunity for clients and patients," Express Scripts spokesman Steve Littlejohn said.
PBMs administer prescription drug benefits for employers and major health plans, brokering discount deals by buying the drugs in bulk from manufacturers and pharmacies.
Should the other major U.S. PBMs -- Medco Health Solutions Inc. (MHS.N: Quote, Profile, Research) and Caremark Rx Inc. (CMX.N: Quote, Profile, Research) -- follow Express's lead, it could be a serious blow to Pfizer.
Medco, however, said it was not planning any similar moves regarding Pfizer drugs. "Lipitor will be staying on our standard formulary," added Medco spokeswoman Ann Smith.
All the PBMs are expected to aggressively promote generic Zocor, when it become available.
Express Scripts is the smallest of the three major PBMs and Ryan said the impact of the move is unclear. She maintained her "buy" rating on Pfizer's stock.
Pfizer shares were off 34 cents, or 1.4 percent, at $24.90 on the New York Stock Exchange.
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