Drug patent costs hit Pfizer's earningsPfizer, the pharmaceutical and biotechnology giant, said this week a drop in sales of one of its blockbuster drugs dragged down earnings in its most recent fiscal quarter.

Pfizer, the largest U.S. pharmaceutical company, said Tuesday its net income dropped in its first fiscal quarter. The New York-based firm affirmed its net income decreased 19 percent to $1.79 billion during the first three months of this year. In 2011, the company reported net income of $2.2 billion.

The single most significant factor contributing to the decline in earnings was a drop in sales of Lipitor, the company's cholesterol-lowering drug. Lipitor was one of the most successful drugs in the company's – and indeed the nation's – history. However, the company lost its patent on the medication last year, allowing generic drug makers to begin selling non-branded iterations of the medicine.

Pfizer has endeavored to bolster cost savings initiatives in an effort to improve profitability. The company has cut biotechnology costs by trimming its research and development divisions, and it has intensified business cost reduction campaigns amid an overall restructuring of its pharma supply chain.

The pharmaceutical company also said it logged $15.4 billion in revenue in the first quarter, representing a 7 percent drop from the $16.5 billion it reported the same period the year prior. Revenue in the U.S. fell 15 percent to $6 billion. Company executives attributed the decline in revenue in the U.S. to the effects of drug patent costs.

U.S. revenues accounted for 39 percent of the company's total revenues in the first quarter of this year. That figure represents a decline from 2011, when revenues in the U.S. represented 43 percent of the firm's total revenues. Pfizer chief executive Ian Read downplayed the results, which CNBC reports missed analysts' expectations.

"I am pleased with our first-quarter 2012 financial performance, which was driven primarily by growth in certain brands including Celebrex, Enbrel and Lyrica, growth in key geographies such as China, as well as our continued ability to realize cost savings and efficiently allocate our shareholders’ capital," he said in a statement. "These and various other factors have mitigated the negative financial impact of product losses of exclusivity of approximately $1.3 billion compared with the year-ago quarter, including Lipitor in the U.S., and have enabled us to generate adjusted diluted EPS(1) that is nearly comparable to the year-ago period."

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