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Patents on $82 billion worth of brand-name medications to expire by 2013


NEW YORK A Lehman Brothers analyst last week projected that $82 billion worth of brand-name medications would lose their patents between 2009 and 2013.

The prediction was made during a conference call entitled Generic Drugs: An Update from Multiple Perspectives. The call was aimed at such areas as patent expirations, implications of generics in the market and generic drug pricing.

Analyst Rich Silver, who covers Specialty Pharmaceuticals, announced the $82 billion number and predicted some of the biggest opportunities for generic introductions in 2009 to be the stomach medication Prevacid, manufactured by TAP Pharmaceuticals, the attention deficit hyperactivity disorder medication Adderall XR, by Shire Pharmaceuticals and the deep vein thrombosis treatment drug Lovenox, by Aventis Pharmaceuticals. The three drugs combined have had sales of almost $6 billion.

Once these generics hit the market, Silver said, he has seen the successful generic substitution rate increase dramatically in pharmacies as compared to a few years ago. Back then, only 60 percent of generic substitution occurred with medications and that took six to eight months to occur. Now, 80 percent conversion occurs with generic drugs in just four to six weeks.

But brand companies use such excuses as authorized generics and citizen’s petitions to hold on to the market share for as long as possible. The authorized generic has the biggest impact; as with some medications like Allegra, the authorized generic manufacturer—in this case Prasco—can gain almost the same amount of market share as a generic company who has 180-day exclusivity for the generic version.

When it comes to pricing these drugs, the Medicare Part D prescription drug plan has started to play a vital factor in the growth of generic drugs. Some plans now will offer coverage in the so-called donut hole or coverage gap but they will only coverage generic drugs for the patient. Also, retailers have seen a steady increase in generic drug usage by their patients. CVS Caremark for example, has seen an increase in generic usage of almost 20 percent from the first quarter of 2003 until the first quarter of 2008, with the figure now showing the total to be 64.1 percent.

Finally, the call ended with a discussion about follow-on biologics and when will they have an impact on the market. According to Tony Clapsis, who covers Washington Healthcare, he expects to see the first generic biologic drug on the market somewhere in the middle of 2012 and for competition for products to start occurring in 2015, with the market share increasing from 10 percent in the first year to 35 percent by 2016.

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