Those with high cholesterol, your wish has been granted. Here come the generics! (But watch your pharmaceutical stock in the process)
Merck’s possible $3 billion loss per year is your gain!
Zocor, one of the most prescribed cholesterol lowering drugs in the world (commonly referred to as a “statin”) is now generic thanks to the Food and Drug Administration. Teva Pharmaceuticals, generic drug manufacturer announced that it has exclusive generic rights to the 5, 10, 20 and 40 mg dosages for 180 days. The generic name is “simvastatin” and will be available at your local pharmacy.
Though this news may ring well for you, Merck is working hard to own the patent for the generic form as well. Merck has set themselves to lose at least $3 billion a year to the generic market. This is a big ouch for the drug manufacturer considering the billions of dollars already lost in the Vioxx debacle, which is still going on today.
Merck has other plans to keep their revenues increasing. There has been an aggressive campaign for their drug “Vytorin,” a combination of Zocor and another cholesterol lowering agent. The company has also signed a deal with two insurance companies so that instead of being a “non-preferred” drug on formularies, it moves Zocor into the lowest cost category. This makes getting the brand over the generic very favorable. However, the long-term effects of such “contracts” between manufacturers and insurance companies remain unseen.
The big test in the generic statin debate will be when Pfizer’s Lipitor goes up for generic manufacturers. Lipitor is the number one prescribed drug in the country, and Pfizer stands to have a significant revenue loss. However, if they follow Merck’s lead and sign contracts with insurance companies, the loss may not be as significant.
Watch your Merck and Pfizer stock very carefully. With the onslaught of generics in the hot statin market becoming available, that stock may hit its all time low.