HEALTH

NACDS conference discusses patent cliff, future of generics

BY Alaric DeArment

Like a freighter in the Atlantic Ocean during hurricane season, anyone with a stake in the generic drug industry will encounter smooth and bumpy sailing alike over the next few years, according to a recent presentation by an industry expert.

IMS Health VP industry relations Doug Long appeared at the end of August at the National Association of Chain Drug Stores’ Pharmacy and Technology Conference in San Diego to talk about the current state of the drug industry and what the near future holds. Over the next decade, according to his remarks, the U.S. drug market will present opportunities as well as uncertainties.

For the generics industry, the so-called “patent cliff” is of particular concern. For the last several years, generics companies have profited handsomely from a steady supply of generic drugs losing patent protection and thus becoming open to generic competition. Under the Hatch-Waxman Act of 1984, the first company to win approval from the Food and Drug Administration for a generic version of a drug gets to compete directly with the branded version for six months, which has allowed many generics companies to grow into giants, especially Israel-based Teva Pharmaceutical Industries, which ranks as one of the largest drug makers in the world.

But that will all slow down pretty soon. A slideshow shown during Long’s presentation listed 20 drugs that will lose patent protection between 2010 and 2014, whose sales by the time of their patents’ expirations will total $107 billion; IMS estimated the expirations will dampen sales by $79 billion. These include Pfizer’s cholesterol-lowering drug Lipitor (atorvastatin calcium), currently the world’s top-selling drug, which will lose protection next year and face generic competition from Indian drug maker Ranbaxy Labs, and Purdue Pharma’s opioid painkiller OxyContin (oxycodone hydrochloride), which will lose patent protection in 2013. Eight of the drugs listed ranked on IMS’ list of the top 10 in terms of sales, while Teva will itself lose protection for one of its own branded drugs, the injectable multiple sclerosis treatment Copaxone (glatiramer acetate), in 2014. “So you have this patent cliff, which means there are going to be plenty of generic opportunities between now and 2014,” Long said.

Sales growth for the top 10 generics companies

UNBRANDED GENERICS SALES BY LEADING CORPORATIONS SALES* %MARKET SHARE %GROWTH
U.S. industry $34,654 11.4% 13.8%
Teva 7,379 21.3 1.1
Mylan Labs 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 US 873 2.5 74.8
Boehringer Ingelheim 768 2.2 7.8
TOP 10 $22,754 65.7% 15.1%

 

However, 2015 is the worrisome year, the year of the patent cliff, when the number of big-name drugs losing patent protection will suddenly drop. That, Long said, could affect not just generic drug companies, but also retailers and other businesses that benefit from generics. In other words, the party won’t be over, but it’ll reach the point when a few guests remain, even though the VIP guests have left and refreshments have dwindled to flat soda and potato chips.

Despite the patent cliff, use of generics has been strong and will likely continue to remain so, and Long said that coinciding with the economic crisis, a growing trend had emerged of patients starting or continuing therapies with generics rather than branded drugs. In 2005, generics accounted for 57.7% of total prescriptions dispensed, according to IMS. By July 2010, that number came close to 75%, even as generics’ market share in terms of percentage of dollars fell from 85.4% to 80.7% during the same period. Sales for the top 10 generic drug companies have grown by 15.1% in the 12-month period ended in June, with Teva and Mylan accounting for 34.4% of generic prescriptions and Teva ranking as the eighth largest drug maker overall in terms of sales.

Among generic companies, Teva had $7.4 billion in generics sales during the 12 months ended in June as sales grew by 1.1%, and the company had a 21.3% market share. Mylan accounted for $3.6 billion in sales, while sales grew by 6.3% and the company commanded a market share of 10.3%. Other companies have grown considerably while commanding a relatively small market share. Global Pharmaceuticals, despite having 2.6% of the market and $899 million in sales, grew by nearly 277%. The U.S. subsidiary of Iceland’s Actavis had $873 million in sales and 2.5% of the market, though its sales grew by almost 75%. Only four of the companies in IMS’ top-20 list—Covidien, Dr. Reddy’s Labs, Apotex and Baxter Healthcare—had declines in sales.

On the branded side, according to the FDA and IMS, the FDA has approved fewer primary care drugs and more specialty drugs—drugs typically prescribed by specialist physicians—every year between 1998 and 2009, except for 2002. Long noted that development seemed skewed toward specialty drugs and orphan drugs, drugs used to treat rare and dangerous diseases and conditions.

Many top-selling branded drugs continue to have strong sales growth. Aside from Lipitor, which had a sales decline by 4.3%, all of the drugs that IMS listed as the top 20 in terms of sales grew during the 12 months ended in June, and sometimes quite strongly. AstraZeneca’s cholesterol-lowering drug Crestor (rosuvastatin calcium) had $3.5 billion in sales, growing by 34.7%, while the antipsychotic and antidepressant Abilify (aripiprazole), made by Bristol-Myers Squibb and Otsuka America Pharmaceutical, had $4.3 billion in sales, growing by 22.3%. Purdue’s OxyContin had sales of $3.1 billion, growing by 18.6%.

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Dr. Siegal’s Cookie Diet introduces CalciOs

BY Allison Cerra

VIENNA, Va. Dr. Siegal’s Cookie Diet has expanded its offerings to include calcium-fortified cookies designed to treat occasional heartburn.

CalciOs cookies are vanilla-flavored cookies, each one providing 30% of the daily value of dietary calcium, Dr. Siegal’s Cookie Diet said. The cookies contain calcium carbonate, designed to treat heartburn relief. CalciOs also are free of artificial colors and preservatives.

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Pharmacies should get out of tobacco-selling, into smoking-cessation game

BY Antoinette Alexander

WHAT IT MEANS AND WHY IT’S IMPORTANT The news that San Francisco’s board of supervisors gave preliminary approval to ban tobacco sales at all retailers that operate pharmacies, including mass merchants and grocers, is a step in the right direction, because if drug stores are going to be banned from selling them, then all retail pharmacy outlets should be banned. However, there’s an even bigger picture to consider.

(THE NEWS: Report: San Francisco supervisors OK tobacco sales ban at pharmacies. For the full story, click here)

As many dollars as pharmacy retailers made selling cigarettes, there is much more to be gained in medication therapy management, and there is a significant opportunity for retail pharmacy to have a greater stake in the future of health care.

Cigarette smoking has been identified as the most important source of preventable disease, illness and death worldwide, according to the American Lung Association. Smoking-related diseases claim an estimated 443,000 American lives each year, including those affected indirectly by "secondhand" smoke.

Furthermore, smoking-related healthcare expenditures are a major drain on the U.S. healthcare system. According to the Centers for Disease Control and Prevention, smoking cost the United States more than $193 billion in 2004, including $97 billion in lost productivity and $96 billion in direct healthcare expenditures, or an average of $4,260 per adult smoker.

Clearly, there’s a positive role that pharmacists can play in smoking cessation. To further support this, a recently published study on the "effect of a pharmacist-managed smoking-cessation clinic on quit rates" found that pharmacists can play a vital role in smoking cessation, especially in a group setting, as they can reach more people within the same time frame.

The study found that at three months and six months, 47.6% and 52.4% of patients reported being smoke-free, respectively. The study was conducted on patients that had participated in the pharmacist-managed Smoking Cessation Group Clinic at the University of Iowa Hospitals and Clinics. Participants received structured group counseling on various topics associated with cessation.

It also should be noted that in August, the Centers for Medicare and Medicaid Services announced that Medicare coverage for seniors trying to quit smoking was expanded to include everyone on Medicare.

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