FRANK BERNHEISEL

Big Pharma, Big Profits

Atorvastatin, a statin, was developed and marketed by Pfizer under the trade name Lipitor. It is prescribed for lowering blood cholesterol.

Since approved by the FDA in 1996, Pfizer has sold some $125 Billion worth. In 2011, Pfizer's patent expired and other drug companies were able to make and market generic versions of the drug.

I was taking Lipitor and my doctor thought the change in the cholesterol numbers was good. This is the new medicine -- we do a test and look at the numbers, prescribe a pill and retest. Eureka, the numbers change.

On May 16, 2012 I bought 90 Lipitor pills each of which had 80 mg of the drug. The cost to the pharmacy was $582.38 and the cost to me was $138.57. That constituted a total of 7.2 grams of the medicine at $80.89 per gram to the pharmacy. My cost because of insurance was only $19.25 per gram. Bargain.

On April 16, 2013 I bought 90 Lipitor pills each of which had 40 mg of the drug. The cost to the pharmacy was $665.80 and the cost to me was $237.89. That constituted a total of 3.6 grams of the medicine at $184.94 per gram to the pharmacy. (My cost was higher this year, $66.08 per gram, because we had not met the deductible for our insurance.)

After listening to the right wing talking points about the best health care in the world and how competition and consumer choice will solve everything, a few thoughts come to mind:

• Pfizer spends about $10 Billion per year on research and development and in the 15 years it held the exclusive patent for Lipitor, it received $125 Billion in revenue for Lipitor. This probably covered the R&D costs.

• Given the competition between Lipitor and its generic versions, why did Pfizer's per gram price increase by 129 percent in one year?

• The inflation rate was 1.5 percent in the last year; Pfizer increased it's per pill price by 14 percent and it's per gram price by 28 percent in eleven months. Impressive!

• In 2011, the last year a Pfizer 10-K is available, Pfizer had revenues of $67.5 Billion and they spent $15.1 Billion on Selling, informational, and administrative expenses in which category I presume the approximately $25 Million paid to the top six executives is buried.

• If I had purchased 437 shares of Pfizer at the share price in May 2011 of $20, I would have received $376 in dividends that would have paid for my Lipitor. Besides, I would have $4,370 in appreciation of the stock price in the last year.