Pharmaceutical giant Pfizer had a massive decrease in third-quarter profit due to the increased competition from generic drugs, according to the New York Times. As more generic drugs become available and are chosen over brand name drugs, the maker of Viagra and Lipitor is feeling the negative effects.
The company said its net income fell from $3.21 billion (43 cents a share) to $2.59 billion (39 cents a share) in the past year. Pfizer is one of many other drug makers suffering from the competition caused by cheaper generic versions of their brand medications.
Older brand name drugs like those manufactured by Pfizer are no longer protected by patents, meaning their generic counterparts can now be produced and sold at cheaper prices. Many of these older brand medications once brought in billions of dollars for drug companies like Pfizer. With the introduction of similar generic drugs, however, those profits are plummeting. In fact, Pfizer links the loss of its patents to a loss of $3 billion to $4 billion per year.
For example, the brand name drug Lipitor lost patent protection in November 2011. Up until that point, the cholesterol-lowering medication had been the world’s top-selling drug.
Last year, findings from a report by AARP’s Public Policy Institute predicted successful sales for Lipitor despite its dangerous side effects and the introduction of generic competition. The report linked its prediction of high sales to the effectiveness of Pfizer’s marketing campaign, which included a series of moves to protect and extend the life of Lipitor.
Despite these predictions and efforts for Lipitor, however, the drug company’s overall profits have decreased since the loss of its patents and the rise of generic competition over the past year.