Countdown to 2011: A big year for generics

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
Temodar 375 Teva NA
Tricor (145 mg)3 1,600 Teva NA
Concerta 1,200 Teva/Impax, Watson NA
Ambien CR4 970 Anchen, Actavis NA
SUBTOTAL SUBTOTAL SUBTOTAL
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
Clarinex 240 Multiple July 1
Taxotere 1,300 Multiple July 3
Singulair 2,800 Multiple Aug. 3
TOTAL TOTAL TOTAL

 

“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
Total generic 1,696.54 1,883.38 2,100.43 2,329.61 2,428.69 1,899.07
Total branded 1,496.46 1,424.47 1,356.48 1,220.46 1,139.88 772.44
TOTAL MARKET 3,192.99 3,307.85 3,456.92 3,550.06 3,568.57 2,671.51

 

Sales of unbranded generics by leading corps†

CORPORATION SALES* %MARKET SHARE %GROWTH
Teva $7,379 21.3% 1.1%
Mylan 3,557 10.3 6.3
Sandoz (Novartis) 3,007 8.7 36.5
Watson Pharma 2,059 5.9 0.9
Greenstone (Pfizer) 1,599 4.6 1.6
Par Pharma 1,398 4.0 44.0
Hospira 1,213 3.5 37.2
Global Pharm 899 2.6 276.9
Actavis 873 2.5 74.8
Boehringer Ingelheim 768 2.2 7.8
TOP 10 TOTAL $22,754 65.7% 15.1%
TOTAL U.S. INDUSTRY $34,654 100.0% 13.8%
*In millions

 

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
*In millions

 

Rx of unbranded generics by leading corps†

CORPORATION TOTAL Rx* %SHARE TOTAL Rx %CHANGE
Teva 473.33 18.7% -2.1%
Mylan 301.31 11.9 1.0
Novartis 218.64 8.7 17.6
Watson Pharma 162.53 6.4 -4.0
Qualitest 118.65 4.7 21.8
Covidien 91.45 3.6 -8.5
Pfizer 89.96 3.6 8.2
Lupin 84.92 3.4 17.3
Dr. Reddy’s Labs 57.79 2.3 2.0
King Pharm 50.59 2.0 -2.4
All others 875.92 34.7 8.7
TOTAL MARKET 2,525.11 100.0% 5.0%
*In millions

 

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%
  Lisinopril 76.08 14.5 4.4   Hydrocodone/APAP 121.12 46.7 0.2
  Amlodipine Besylate 48.68 9.2 11.6   Oxycodone w/APAP 28.23 10.9 6.0
  Hydrochlorothiazide 45.83 8.7 -1.4   Tramadol 24.58 9.5 8.5
  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%
  Diovan 14.50 17.4 -4.3   Lyrica 8.74 21.4 -8.0
  Diovan HCT 11.70 14.0 -7.4   OxyContin 7.01 17.2 13.2
  Benicar 6.36 7.6 -6.9   Endocet 3.84 9.4 -4.1
  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%
  Amoxicillin 50.97 21.4 -0.1   Sertraline 32.71 19.6 7.7
  Azithromycin 48.44 20.4 -0.6   Citalopram HBR 27.28 16.3 10.3
  Cephalexin 21.74 9.1 1.9   Fluoxetine 24.06 14.4 5.1
  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%
  Levaquin 9.71 51.2 -13.2   Lexapro 23.24 39.1 -5.5
  Avelox 2.85 15.0 -13.3   Cymbalta 14.61 24.5 -1.6
  Solodyn 1.29 6.8 22.2   Effexor XR 9.94 16.7 -31.4
  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%
  Simvastatin 76.50 62.3 7.9   Metformin 43.81 51.4 5.5
  Pravastatin 19.34 15.8 20.0   Glimepiride 9.36 11.0 6.8
  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%
  Lipitor 38.52 37.7 -13.0   Actos 11.18 17.5 -6.0
  Crestor 20.34 19.9 15.6   Lantus 9.04 14.1 -6.9
  Tricor 8.04 7.9 -22.9   Januvia 5.79 9.1 4.4
  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%
  Singulair 24.62 22.0 -1.3   Omeprazole 43.61 51.7 20.3
  ProAir HFA 19.68 17.6 -5.3   Ranitidine HCl 14.52 17.2 7.6
  Advair Diskus 16.94 15.1 -3.2   Pantoprazole 11.62 13.8 -12.9
  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
  Theophylline SR 1.55 8.7 -1.3   Aciphex 4.12 9.8 -17.5
  Budesonide 1.49 8.4 103.4   Prevacid 3.20 7.6 -79.5
  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%
  Ibuprofen 25.89 33.6 2.5   Tri-Sprintec 6.60 8.9 11.2
  Meloxicam 14.36 18.6 3.2   Yaz 6.10 8.2 -42.9
  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%
  Celebrex 8.78 66.5 -11.7   Trinessa 3.55 35.2 -21.7
  Voltaren Gel 1.79 13.5 42.3   Microgestin Fe 1/20 1.28 12.7 -22.6
  Arthrotec 787.28 6.0 -15.5   Notrel 1/35 1.28 12.6 19.8
  All others 1.85 14.0 1.3   All others 3.99 39.5 13.6
*In millions

 

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