Looking ahead: Steer clear of the patent cliff
One trend that generic companies and pharmacy retailers alike should keep an eye on is the patent cliff. One of the reasons why generic prescriptions will likely peak at 86% to 87%, Long said, is that after the patent on Crestor expires In 2016, there simply won’t be a lot of top-selling branded drugs.
Typically, when a generic drug maker is the first to file an abbreviated new drug application with the Food and Drug Administration to market a generic drug, it is entitled to 180 days of market exclusivity upon FDA approval in which to compete directly with the branded version. For generic companies, opportunities like this are what gold veins are to mining companies. As soon as a cheaper generic becomes available for a drug, many payers will automatically switch from the branded to the generic, and a generic drug maker could stand to rake in billions.
Take India-based Ranbaxy Labs, for example. In November 2011, Pfizer’s patent for the cholesterol treatment Lipitor (atorvastatin) expired, and Ranbaxy launched its generic version. At the time, according to Ranbaxy financial reports, Lipitor had sales in the United States of $7.9 billion. But at the peak of its 180-day exclusivity period, Ranbaxy captured 50% of market share in the United States. Generic atorvastatin ranked 21st on the list of the top 25 drugs for 2012, with $2.3 billion in sales, while branded Lipitor had disappeared. Pfizer’s Alzheimer’s disease drug Arlcept (donepezil) is another example. Ranbaxy launched the first generic version in 2010, capturing 36% of Aricept’s $2.6 billion market share. In 2012, its generic captured 30% of the market share for Takeda’s $2.7 billion diabetes drug Actos (pioglitazone).
About $13 billion in drugs will lose patent protection in 2013, Including Purdue Pharma’s Oxycontin (oxycodone); Eisai and Johnson & Johnson’s Aciphex (rabeprazole sodium); Novartis’ Zometa (zoledronic acid); Genentech’s Xeloda (capeticabine); Endo’s Opana ER (oxymorphone); and Warner Chilcott’s Asacol (mesalamine), according to IMS. Drugs that will lose protection next year include AstraZeneca’s Nexium (esomeprazole); Eli Lilly’s Cymbalta (duloxetine); Pfizer’s Celebrex (celecoxlb); AstraZeneca’s Symbicort (budesonide; formoterol fumarate dihydrate); Sunovion’s Lunesta (eszopiclone); Allergan’s Restasis (cyclosporine); E11 Lilly’s Evista (raloxifene); Novartis’ Sandostatin LAR (octreotide acetate); and Warner Chilcott’s Actonel (risedronate sodium).
According to IMS, drugs losing patent protection between 2008 and 2012 had total pre-expiration sales of about $101 billion. But between 2013 and 2017, that total will drop to $86 billion. That’s still a significant figure, but the Lipitor-sized opportunities won’t be appearing again for a while, at least until generic drug makers master the art of manufacturing biosimilars, particularly versions of the biotech drugs with the highest sales.
The opportunity there could be enormous. According to IMS, of the top 25 drugs in the United States as measured by sales, seven are biotech drugs. AbbVie’s autoimmune disease treatment Humira (adalimumab) is in sixth place, with $4.6 billion in sales in 2012, followed by Pfizer’s and Amgen’s Enbrel (etanercept), also used for autoimmune diseases, with $4.3 billion. Remicade (Infliximab), another autoimmune disease drug made by Johnson & Johnson, ranks eighth with sales of $3.9 billion, followed by Teva Pharmaceutical Industries’ multiple sclerosis treatment Copaxone (glatiramer acetate) — officially a pharmaceutical drug, but sometimes considered a biologic due to Its molecular complexity — and Amgen’s Neulasta (pegfilgrastim), used to improve immune system function in patients on chemotherapy.
But there’s a potential threat to biosimilars in the form of state-level, carve-out laws supported by biotech companies whose products are at risk from biosimilar competition. The laws generally require pharmacists to inform physicians and patients if they swap out a branded biotech drug for a biosimilar, and also allow the physician to present substitution by writing "Do not substitute" on the prescription. As of last month, California’s state legislature had passed such a bill, which was awaiting a decision by the governor. (For more on biosimilars, see page 20.)
Colgate’s Optic White line continues to shine
NEW YORK — It also is important to note the success of Colgate’s Optic White toothpaste. According to IRI, it raked in $141.1 million in year-one dollar sales and took the No. 2 spot in IRI’s 2012 New Product Pacesetters: Top 10 Non-Food Brands report released earlier this year.
Still room to grow within oral care market
The oral care market is likely to continue to experience an upswing in sales going forward, but there are opportunities for even greater growth.
(For the full category review, including sales data, click here.)
The oral care market generated U.S. retail sales of $6.4 billion in 2012, research firm Mintel stated in its "Oral Care–U.S.–May 2013" report. The market is expected to grow modestly about 2% per year, reaching about $7.1 billion in 2017.
The market no doubt benefits from the fact that oral care is a regular part of people’s personal hygiene routine, but industry sources suggest that there’s room for more robust growth, especially for those brands that further educate consumers on the link between general health and oral health.
A lack of proper oral hygiene can lead to such oral infections as gum disease and tooth decay and studies have found connections between oral health and many chronic conditions and diseases.
"The relationship between oral health and general health may be a selling point for marketers to leverage to drive further sales of oral care products and to encourage users to widen their product repertoires and care regimens." Mintel stated.
The opportunities to further educate consumers become increasingly evident when you look at the statistics.
According to the Kaiser Family Foundation, about l-in-4 nonelderly adults have untreated tooth decay. The rate among low-income adults is twice that of adults with more income (41% versus 19%). Furthermore, in 2010, 22% of low-income adults had gone five years or more without a dental visit, or had never had a visit.
In addition to education, providing today’s consumers with more for their money is also an attractive selling point. Shoppers have shown that they love products that offer multiple benefits, and this also is playing out within oral care.
Multipurpose toothpaste, especially one that promises to brighten one’s smile as it cleans and protects, is the most popular form of toothpaste, and has led to the prevalence of whitening toothpastes and accompanying oral care products.
And the mouthwash segment is enjoying an uptick in sales as consumers increasingly look to add it to their daily oral care routine to help kill germs and bacteria, and freshen breath.
"Consumers also may be willing to trade up to more expensive products if companies and brands integrate benefits that consumers find valuable, such as toothpaste that repairs and rejuvenates teeth and gums" Mintel stated. "Added cosmetic benefits also will help drive sales as many consumers are concerned about the visual appearance of their teeth."