CNBC announced that MRK was up today on a Lehman Bros. upgrading of its target price to $50 a share. That would be virtually 20 times the '07 estimate of $2.54. Pfizer in '07 will earn only 10% less per share than what MRK earns. And of course Pfizer doesn't have the lawsuit overhang that MRK does.
He is obviously talking about the fact the PFE made some contractual deals with PBMs and other providers to ensure Lipitor stayed on the Formulary for 2007, by making some price concessions for 2006 before cheap Zocor is available. Even the PBMs can be tempted to give away some future cost savings to get something "right now."
But clearly the impact of these deals will go away when 2008 hits, meaning there is a good chance Lipitor market share will then take another quantum jump downwards.
The last big expiration in this 34-month period of six big clustered expirations comes to an end in only ten months with the Norvasc expiration. Once that has worked its way through the system, there will be some years of truly outsized earnings growth as there will be few expirations to retard that growth.<<<<
LOL That is exactly the problem. After that comes the Lipitor expiration and stop acting as if there is a replacement when there may not be one.