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Pfizer Inc. (PFE), VIVUS, Inc. (VVUS): Cheap Viagra That Americans Can’t Buy

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Cheap generic versions of Pfizer Inc. (NYSE:PFE)‘s Viagra are coming to Europe, according the generic-drug maker Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). The patent on the drug expired in multiple European countries — Germany, the United Kingdom, Italy, the Netherlands, Switzerland, Ireland, Austria, Belgium, and Denmark — today. Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) was already selling the drug in Spain, Canada, and a few other countries.

Americans will have to wait. In 2011,

Pfizer Inc. (NYSE:PFE)

Pfizer Inc. (NYSE:PFE) successfully defended a patent covering Viagra’s method of use as an erectile dysfunction drug. The active compound was originally developed as Revatio for high blood pressure until Pfizer Inc. (NYSE:PFE) realized that patients taking the drug were feeling better in more than one way.

Today’s European launch wasn’t a big surprise; the nice thing about patent expirations is that investors can see them coming and price in the reduction of sales accordingly.

In the first quarter, sales in the U.S. were greater than all the other countries combined, so Pfizer Inc. (NYSE:PFE) will still enjoy about $1 billion worth of exclusive sales until April 2020. That’s six months later than when the aforementioned method-of-use patent expires because Pfizer Inc. (NYSE:PFE) got a pediatric extension for testing Revatio in children with high blood pressure. Since it shares the same active ingredient, the added exclusivity period ironically extends to Viagra as well.

With cheap generics available elsewhere, we could see an increase in the number of people selling drugs over the Internet, which could be the onus for Pfizer Inc. (NYSE:PFE)’s recent move to sell Viagra directly through its website.

Guilt by association
Generic Viagra will hurt more than just Pfizer. With a cheap erectile dysfunction drug on the market, patients may be interested in switching from brand-name versions of Eli Lilly & Co. (NYSE:LLY)‘s Cialis and Bayer AG (ADR) (OTCMKTS:BAYRY) and GlaxoSmithKline plc (ADR) (NYSE:GSK)‘s Levitra. In the U.K., the Globes newspaper reported that Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) will sell the pill for a tenth of the cost of the brand-name drug. That’s quite a motivation to switch.

The biggest loser is probably VIVUS, Inc. (NASDAQ:VVUS), which has an erectile dysfunction drug, Spedra, that should gain EU approval shortly after the Committee for Medicinal Products for Human Use signed off on the drug in April. That drug seems to have a faster onset, but it’s hard to see how VIVUS, Inc. (NASDAQ:VVUS) or a yet-to-be-named marketing partner will be able to convince patients to pay a higher price just to get going a little quicker.

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