Perhaps the iconic scene at the end of Ridley Scott’s 1991 movie “Thelma & Louise” — with Gina Davis’ and Susan Sarandon’s characters hurdling into the Grand Canyon in a green convertible — is a good metaphor for what’s happening in the generic drug industry these days.
All right, maybe that’s a little too dramatic, but the so-called “patent cliff” is here. But unlike Thelma and Louise, it’s not too late for drug makers to adapt to an environment in which the supply of top-selling primary-care drugs with expiring patents begins to dwindle, leaving entire disease-state categories commoditized.
“Eventually, that patent cliff will not be there,” IMS Health VP industry relations Doug Long told Drug Store News. “When you have a brand innovation drought, particularly in primary care or pill forms, eventually that will create a generic small molecule opportunity drought, and that’s likely to happen at the end of the decade.”
The response for both generic and branded drug makers has been to move up the value chain, Long said, which includes moving into specialty drugs for diseases like cancer and autoimmune disorders.
According to IMS Health, the specialty drug market was worth $42.8 billion during the 12-month period ended in June, and according to Medco Health Solutions, now part of Express Scripts, specialty pharmacy costs could account for 40% of drug spending by 2020. So it should come as no surprise that a huge number of drug makers, retailers and others hope to grab a piece of it.
One of the ways generic drug makers hope to do this is with biosimilars. The Patient Protection and Affordable Care Act included a mandate for the Food and Drug Administration to create an abbreviated regulatory approval pathway for biosimilars, similar to the one for generic pharmaceutical drugs that the Hatch-Waxman Act created 28 years ago.
The regulations aren’t in place yet, but some drug makers aren’t content to wait — and some are seeking approval for biosimilars using the pathway for novel biologics already in place. At the end of August, the FDA approved Teva Pharmaceutical Industries’ tbo-filgrastim for treating neutropenia, a condition in which the number of white blood cells is decreased, making patients more susceptible to life-threatening bacterial infections. The company sought approval using a biologics license application, or BLA, the same approval pathway used for novel biotech drugs because while the Patient Protection and Affordable Care Act created a regulatory approval pathway for biosimilars, the regulations have not yet been established. Teva markets tbo-filgrastim in Europe under the trade name Tevagrastim, which is a biosimilar version of Amgen’s Neupogen. Teva plans to market tbo-filgrastim starting in November 2013, under an agreement with Amgen.
Another area of opportunity in the future will be oral solids for cancer. Most of those drugs are brand-new and won’t lose patent protection for at least a decade. “The chance for generic entry is some place off in the future, but then that will still follow the same pattern,” Long said.
Click here for the full 2012 Generics Report.