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The world of generic drugs has a big year ahead of it. Actually, it has a few big years ahead of it. But 2011 in particular carries a certain symbolic value as the year in which Pfizer, the world’s biggest drug maker, loses control of its patent for the cholesterol-lowering drug Lipitor (atorvastatin calcium), the world’s top-selling drug. While it’s not a moment quite as dramatic as the fall of the Roman Empire or the Soviet Union’s launch of the Sputnik satellite — Pfizer will continue to be the world’s biggest drug maker for the foreseeable future, and it likely will continue to perform well even if it loses that position — it marks a sort of apogee of the evolution of the generic drug industry.
To be sure, Pfizer stands to lose quite a lot in sales when Gurgaon, India-based Ranbaxy Labs — now a subsidiary of Japan’s Daiichi-Sankyo—begins marketing its cheaper, generic version of Lipitor next year. Under the Hatch-Waxman Act of 1984, Ranbaxy will get 180 days in which to market its version, after which the drug will become fair game for any generic company that can win approval for a version of its own, and the price of generic Lipitor will dip even further, leading to a commoditization of the market for it.
New generic launches — outlook remains robust
|PRODUCT||SALES*||GENERIC||LAUNCH DATE||PRODUCT||SALES*||GENERIC||LAUNCH DATE||PRODUCT||SALES*||GENERIC||LAUNCH DATE|
|Mirapex||$500||Teva (Barr)||Jan. 1||Lotrel (5/40 mg, 10/40 mg)||$320||Par Pharmaceutical||Jan. 1||Avapro||$500||Teva||March 30|
|Flomax||2,200||Impax Labs||March 2||Rythmol SR||130||Par||Jan. 1||Avandamet||230||Teva||March|
|Cozaar/Hyzaar||1,500||Teva||April 6||Femara||590||Mylan||Likely 2Q||Avandia||520||Teva||March|
|Effexor XR||2,800||Teva||July||Nasacort AQ||285||Teva (Barr)||June 15||Provigil||1,000||Teva (Barr), Mylan, Ranbaxy||April|
|Gemzar||770||Teva||Likely Nov. 15||Yaz||780||Teva (Barr)||July 1||Xopenex (1.25 mg/3 mL,0.63/mL, 0.31/3 mL||540||Watson (Breath, Arrow)||August|
|Lovenox||2,700||Amphastar/ Watson, Teva, Sandoz/Momenta||NA||Solodyn||475||Impax, Sandoz, Teva||November||Actos||3,400||Mylan, Watson, Ranbaxy||Aug. 17|
|Lipitor||7,600||Ranbaxy, Watson (Cobalt)||Nov. 30||Detrol LA||920||Teva||Sept. 25|
|Tricor (145 mg)3||1,600||Teva||NA|
|Ambien CR4||970||Anchen, Actavis||NA|
|Aricept||$2,300||Multiple||May 25||Lexapro||$2,800||Multiple||March 14|
|Levaquin||1,600||Multiple||June 20||Seroquel||4,200||Multiple||March 26|
|Xalatan||630||Multiple||Sept. 22||Plavix||5,600||Multiple||May 17|
“The prodfitability always depends on whether there’s an exclusivity period and how many competitors are in the marketplace,” IMS Health VP industry relations Doug Long told Drug Store News. It’s not uncommon to see a dozen or more companies making their own generic versions of a drug soon after the 180-day exclusivity period has ended.
The story of Lipitor also is symbolic because it points to what the pharmaceutical environment will look like in the years to come. According to IMS Health, generics accounted for 57.7% of prescriptions dispensed five years ago; now, that number is close to 75%. “In 2010, generics represent more than 70% of all dispensed products from retail pharmacies, and in 2011, that number will continue to climb due to four major drugs becoming generically available,” Jody Fisher, VP marketing for healthcare analytics firm SDI Health, told Drug Store News.
Indeed, many analysts already have sounded the funeral dirge for the age of blockbuster drugs, defined as drugs that earn at least $1 billion a year in the United States and usually see significant uptake among physicians for treating common illnesses. That doesn’t mean new drugs won’t be launched that make $1 billion in sales, but it does mean that drug companies no longer can rely on them as their main source of growth, though this is truer for some therapeutic classes than for others.
For example, according to Decision Resources, the market for hypertension drugs will become so commoditized as a result of generic competition that the market research firm expected no blockbuster hypertension drugs over the next decade. While the firm limited its prediction to hypertension drugs and didn’t make a similar one for other therapeutic classes, it stands to reason that a drug that works as well as Lipitor or GlaxoSmithKline’s asthma and chronic obstructive pulmonary disease drug Advair Diskus (fluticasone propionate and salmeterol) is a hard act to follow. So, with generic versions depressing prices, a company searching for “the next Lipitor” could have a tough time finding it.
Generic penetration report: total prescriptions*
|2005||2006||2007||2008||2009||YTD SEPT. 2010|
Sales of unbranded generics by leading corps†
|TOP 10 TOTAL||$22,754||65.7%||15.1%|
|TOTAL U.S. INDUSTRY||$34,654||100.0%||13.8%|
Oncology generic pipeline
|ESTIMATED LAUNCH||BRAND||USE||EXCLUSIVITY||BRANDED U.S. SALES EST.*|
|August 2009||Eloxitan||Colon cancer||No; Teva, Hospira||$1,300|
|June 2010||Arimidex||Breast cancer||No; multiple||850|
|November 2010||Gemzar||Ovarian, lung, breast, pancreatic cancer||Yes; Teva||770|
|November 2010†||Taxotere||Breast, prostate, lung cancer||NA; Sanofi patent was invalidated in court in September||1,100|
|December 2011††||Femara||Breast cancer||Yes; Mylan||550|
|2011||Alimta||Lung cancer||Yes; Teva||850|
|2012||Zometa||Breast, prostate, lung cancer; Multiple myeloma, renal cell carcinoma||Yes; Teva||650|
Rx of unbranded generics by leading corps†
|CORPORATION||TOTAL Rx*||%SHARE TOTAL Rx||%CHANGE|
|Dr. Reddy’s Labs||57.79||2.3||2.0|
IMS’ Long said the success of a new drug depends on how well-differentiated it is from drugs in the same class or from those that treat the same condition. Many branded companies have responded by branching into biologics and specialty drugs that treat less-common conditions but are more expensive, with Pfizer, Merck and Bristol-Myers Squibb being notable examples.
In total, drugs worth nearly $25 billion in sales will come off patent in 2011, according to Barclays Capital, followed by a big spike in expiries in 2012, when nearly $35 billion worth of drugs will lose protection. By 2014, the industry will have reached the patent cliff, creating a new era of challenges for generic and branded drug companies alike.
The years preceding the 2014 patent cliff will be great for generics companies, which will have a wide range of top-selling drugs they can bring to market. But once their 180-day exclusivity periods run out, and the number of expiring patents for blockbuster drugs runs out as well, those generic companies will have difficulty finding sources of significant growth like they’ve become accustomed to over the last few years.
Some companies will counteract this by branching out into follow-on biologics, as many already have, while some analysts, including Long, have predicted a wave of consolidation among generic drug makers in the near future, which particularly will affect smaller manufacturers.
“I think the consolidation is likely to happen after this patent cliff is over—more like 2015 and beyond—because there’s not as many generic opportunities post-2014,” Long said.
Generic manufacturers have followed branded manufacturers by adapting to stay competitive, expanding their expertise and eagerly seeking to enter the biosimilars market and make more complex pharmaceuticals. Long foresees more of this happening. “With the slowdown of small-molecule opportunities, you’ll see biologics losing exclusivity during the same time frame,” Long said. “At first, everyone had expertise in small molecules, then they started doing creams and ointments, then injectables, then products with devices.”
Total branded and generic prescriptions by disease state
|DISEASE STATE||TOTAL Rx*||%SHARE OF TOTAL Rx||%CHANGE||DISEASE STATE||TOTAL Rx*||%SHARE OF TOTAL Rx||%CHANGE|
|TOTAL HYPERTENSION MARKET||609.70||17%†||-0.9%||TOTAL PAIN MARKET||300.17||8.4%†||1.1%|
|Total generic||526.35||86.3%||2.0%||Total generic||259.40||86.4%||2.1%|
|Amlodipine Besylate||48.68||9.2||11.6||Oxycodone w/APAP||28.23||10.9||6.0|
|All others||355.75||67.6||0.7||All others||85.46||32.9||1.8|
|Total branded||83.35||13.7%||-16.0%||Total branded||40.77||13.6%||-4.5%|
|All others||50.79||60.9||-21.4||All others||21.19||52.0||-7.9|
|TOTAL SYSTEMIC ANTIBIOTICS||256.76||7.2%†||-1.6%||TOTAL DEPRESSION MARKET||226.40||6.3%†||1.3%|
|Total generic||92.6%||237.79||-0.7%||Total generic||166.88||73.7%||7.9%|
|All others||116.63||49.0||-1.5||All others||82.83||49.6||8.1|
|Total branded||18.97||7.4%||-11.0%||Total branded||59.51||26.3%||-13.5%|
|All others||5.13||27.0||-11.4||All others||11.72||19.7||-21.1|
|TOTAL CHOLESTEROL MARKET||224.86||6.3%†||1.7%||TOTAL DIABETES MARKET||149.22||4.2%†||0.6%|
|Total generic||122.73||54.6%||10.1%||Total generic||85.27||57.1%||1.9%|
|Lovastatin||16.43||13.4||8.4||Metformin HCl ER||8.06||9.5||4.4|
|All others||10.46||8.5||12.5||All others||24.04||28.2||-6.3|
|Total branded||102.13||45.4%||-6.9%||Total branded||63.95||42.9%||-1.1%|
|All others||35.24||34.5||-5.7||All others||37.94||59.3||1.1|
|TOTAL ASTHMA MARKET||129.59||3.6%†||1.8%||TOTAL GERD MARKET||126.30||3.5%†||1.0%|
|Total branded||111.82||86.3%||2.7%||Total generic||84.35||66.8%||19.6%|
|ProAir HFA||19.68||17.6||-5.3||Ranitidine HCl||14.52||17.2||7.6|
|All others||50.58||45.2||10.7||All others||14.60||17.3||96.9|
|Total generic||17.77||13.7%||-3.2%||Total branded||41.95||33.2%||-23.1%|
|Albuterol Neb Soln||9.64||54.2||10.6||Nexium||25.86||61.6||-3.0|
|All others||5.10||28.7||-30.7||All others||8.77||20.9||20.0|
|TOTAL ARTHRITIS MARKET||90.29||2.5%†||0.9%||TOTAL CONTRACEPTIVES MARKET||84.04||2.3%†||-4.5%|
|Total generic||77.08||85.4%||2.0%||Total branded||73.94||88.0%||-4.3%|
|Naproxen||13.87||18.0||6.7||Loestrin 24 Fe||6.07||8.2||65.4|
|All others||22.97||29.8||-1.7||All others||55.17||74.6||-3.2|
|Total branded||13.21||14.6%||-5.4%||Total generic||10.10||12.0%||-6.2%|
|Voltaren Gel||1.79||13.5||42.3||Microgestin Fe 1/20||1.28||12.7||-22.6|
|All others||1.85||14.0||1.3||All others||3.99||39.5||13.6|