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Employee Benefits

Generics of Lipitor, Plavix Coming This Year

Versions of those drugs will be cheaper, but overall Rx costs will rise.

Generic copies of the two best-selling drugs, Lipitor and Plavix, will reach pharmacy shelves this year, providing less-expensive alternatives to lowering cholesterol and preventing blood clots.

The drugs are among six blockbusters that will lose patent protection this year. The others are Levaquin, an antibiotic; Taxotere, a cancer drug; Concerta, for attention deficit hyperactivity disorder; and Zyprexa, for treatment of schizophrenia.

Lipitor and Plavix account for $13.1 billion in combined annual sales.

The availability of generic equivalents will help users and employers save money. In 2009, the average retail price was 75% lower than the price of name-brand drugs. In addition to the lower cost, many prescription drug plans require lower copays for generics than for brand-name medications.

Generic drugs claimed about 75% of the market in 2009. The share is expected to reach 85% by 2014.

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Despite generic availability of some monster drugs, you should expect a 5% increase in overall drug costs in 2011, the third straight year of single-digit increases. Part of the reason is that generics will be phased in. The Lipitor equivalent, for example, won’t be available until late fall.

The generics shouldn’t have much impact on drug company stock prices when they hit the market. The coming end of patent protection has been known well in advance, so any adjustment is likely already factored into share prices.