The Life Cycle of a Drug: Authorized Generic

Referring to the bar graph in the first of this series of posts, the next most profitable strategy manufacturers can use in the life cycle of a drug is to authorize a generic version at the end of the patent life of a brand name drug. A current example is Pfizer's brand name drug, Lipitor (atorvastatin). As of last December 1st, Watson Pharmaceuticals has been authorized to sell a generic version of the drug for six months, as per current law. The Watson generic will be exactly the same as Lipitor and will be supplied to Watson by Pfizer, but will not bear the Pfizer logo or the Lipitor brand name. It is estimated that Pfizer will receive 70% of Watson's sales of the authorized generic atorvastatin.