As cholesterol fighter Lipitor goes generic, its maker Pfizer Inc is hoping to hold onto perhaps a third of the 3 million Americans who take the biggest-selling drug of all time.

Lipitor, which became available in 1997 and generated annual sales of $13 billion at its peak, reduces bad LDL cholesterol and the risk of heart attack and stroke. It loses U.S. patent protection on Wednesday.

More than one-third of patients currently taking Lipitor would like to stay on Lipitor, David Simmons, president of emerging markets and established products for Pfizer, said on Tuesday, citing internal company research.

Pfizer is employing unprecedented tactics to hold onto as many Lipitor prescriptions as it can during the first six months of generic competition, when only two copycat versions will be on the market.

It plans to pull back on the aggressive marketing plan afterward, when a slew of other generics will be introduced. Lipitor's chemical name is atorvastatin.

Watson Pharmaceuticals Inc will sell an authorized generic form of Lipitor made by Pfizer, with an estimated 70 percent of its sales going to Pfizer. Watson said early on Wednesday it has begun shipping the pills, calling it the largest generic product launch in U.S. history.

Late on Wednesday, the U.S. Food and Drug Administration said it had given approval for the first generic version of Lipitor to Indian drugmaker Ranbaxy Laboratories Ltd.

Ranbaxy had been ready to sell its version as the result of a settlement with Pfizer in 2008, but the launch had been dependent on U.S. regulators lifting a ban that kept the company from exporting some products to the United States after quality control issues at its Indian factories.

Some industry watchers had expected that Israel's Teva Pharmaceutical Industries Ltd might step in and help supply Ranbaxy if the FDA were not to approve shipments from its main facility in Paonta Sahib, India.

Teva shares closed up 3 percent on the Nasdaq, while Watson fell 4 percent and Pfizer rose 3.5 percent on the New York Stock Exchange. Ranbaxy closed down 3.9 percent in India.

PROTECTING THE BRAND

Watson has forecast branded Lipitor will keep 40 percent of its prescription volume in the next six months. That is about twice as much as brand companies typically retain in the initial 180-day period, according to Leerink Swann analyst Jason Gerberry.

Why would patients prefer Lipitor even though Watson's generic is identical to the branded product and Ranbaxy's generic has the same active ingredient?

When I go into a pharmacy and if I'm going to be dispensed a generic, I have no idea where it is coming from, Simmons said. I know if I get Lipitor, I know it's coming from Pfizer.

Pfizer said it reached deals with some health insurers and pharmacy benefit managers (PBMs) -- firms that negotiate drug prices for companies and health plans -- that will allow patients to obtain branded Lipitor at similar or even lower co-payments than those assigned for Lipitor generics.

The arrangements also mean health insurers working with Pfizer will pay no more for branded Lipitor than for the generics, Simmons said.

He forecast the cost of the generics would likely be 20 percent to 30 percent lower than the original price of Lipitor during the first six months and fall dramatically afterward.

Pfizer is offering patients a card that covers all but $4 of their co-payment for Lipitor, up to a maximum discount of $50. It can be ordered at the website LipitorForYou.com.

Lipitor has chalked up more than $130 billion in sales during its 14 years on the market and many investors doubt another drug of its magnitude is likely any time soon.

But industry experts say a major advance in treating diabetes, obesity or Alzheimer's disease would have a good shot at matching or even eclipsing Lipitor's gargantuan sales.

(Reporting by Ransdell Pierson; additional reporting by Lewis Krauskopf and Alina Selyukh; editing by Gary Hill and Maureen Bavdek)

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