Pharmas to lose $100bn to generics
by Anna Lewcock
22-Feb-2007 - A report to be published next week predicts that US and EU pharmas will lose up to $100bn in revenues over the next five years as generic products take advantage of major branded products losing patent protection.
The greatest impact will seen be between 2010 and 2012 as the patents covering Pfizer's blockbuster drug Lipitor (astorvastatin calcium) expire, according to the new report "Generic Competition 2007 to 2011 - The impact of patent expiries on sales of major drugs." The drug achieved worldwide sales of almost $13bn (€9.9bn) in 2006, representing the biggest opportunity ever for the generics industry, according to the report.
Patent expiration can cause revenues for the supplier to drop 10-fold over a period of just two years, said report author, Dr Peter Norman. Eli Lilly experienced this first hand on expiration of Prozac's (fluoxetine) patent, and Bristol-Myers Squibb saw revenues for Plavix (clopidogrel bisulfate) drop 90 per cent within a quarter as generic clopidogrel hit the market following the branded product's patent expiry.
However, successful identification and exploitation of potential opportunities provided by patent expiration of branded products can offer a significant growth driver for pharmas who focus their business on generic therapeutics.
The opportunities offered as major drugs such as Lipitor and Plavix come off patent will sustain the revenue growth for generics suppliers over the next five years, and will ensure that revenue growth of the generics sector will continue to outstrip that of innovative pharmaceutical companies, says the report.
In 2005, generic drugs captured 15 per cent of the global healthcare market, with combined revenues of $65bn. 74 major drugs are due to come off patent in the period 2007-2011.
According to the report, the five-year period 2007-2011 could see $20bn of additional revenues per year generated by generics companies such as Sandoz and Teva. Big pharmas likely to be hit hardest by the imminent generics flood include Bristol-Myers Squibb, Takeda, AstraZeneca and Eli Lilly, with over 40 per cent of their revenues under threat, while Merck and Pfizer risk losing 50 per cent of their 2005 revenues, says the report.
"There is a considerable difference between the top 20 pharmaceutical companies in both the number of products and the amount of revenues under threat from potential introduction of generics," says Dr Norman.
"Neither Amgen, which currently markets only biological products, nor Merck KgaA, whose portfolio is primarily mature products, face any threat from generic competition, while Roche, Bayer-Schering, Abbott and Schering-Plough face limited threats to their revenues."
Fourteen major drugs are due to lose patent expiry in the US during 2007, including blockbusters Norvasc (amlodipine) from Pfizer, AstraZeneca's Nexium (esomeprazole magnesium) and Janssen's Risperdal (risperidone), while in Europe Risperdal is the only significant drug losing protection this year according to Dr Norman. |
Generic Plavix opens door for API manufacturers
By Nick Taylor
13-May-2008 - Switzerland-based Schweizerhall appears to have circumnavigated patent law, with approval of its generic version of Bristol-Myers Squibb's (BSM) and Sanofi-Aventis' Plavix (clopidogrel bisulfate) in Germany "expected shortly".
Plavix's European patent is not due to expire until 2013 but approval of the generic in Germany and Luxemburg is predicted for this year, with Schweizerhall planning to launch the drug throughout the European Union.
Schweizerhall's move could lead to the opening up of the European generics market, which would have a positive knock on effect on sales of active pharmaceutical ingredients.
The approval process appears to be at a late stage, with Luzi von Bidder, chairman of Schweizerhall saying: "A first license agreement with a major generics company was already concluded and the signing of a contract with another generics provider is imminent. We expect first sales already in the current quarter."
Schweizerhall's initial release failed to identify the generics company and provider but Novartis AG's Sandoz and Germany-based Ratiopharm have since confirmed their involvement.
Both companies were already in partnership with Schweizerhall, which develops and registers generic medicines for the two companies.
What is less certain is how Schweizerhall's product has gained approval but a previous case in the US serves to reveal a possible chink in Plavix's patent.
Canada-based Apotex previously marketed a generic version of Plavix in the US until June 2007 when a court barred them from doing so. Apotex felt its product did not infringe an active patent as it contained both enantiomers of the active ingredient, whereas Plavix only has one.
BSM and Sanofi successfully fought off that challenge and plan to do the same in Europe, with Sanofi stating it will "vigorously defend intellectual property rights, including patent protection, in Germany".
Regardless of the eventual success of Sanofi's challenge it appears likely that the generic competitor will eat away at Plavix's sales in the short term.
Merrill Lynch analysts are warning investors that there is no guarantee Sanofi will get the generic quickly removed from the market. A significant period of generic competition would see Plavix's sales drop as they did in the US.
The case's outcome will clearly affect all the companies directly involved. However, the repercussions on the wider industry could be more dramatic, with significant implications for brand pharmaceuticals, generics and API sectors. |
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First version of activery web: Challenges in drug delivery The combination of the following three factors pushed pharmaceutical
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Cycle Management: - Dramatic reduction of the number of new drug approvals in
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- Increasing share of generic drugs through expiration of
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Maximizing Product Returns Through Reformulation: Old Molecules, New Opportunities Introduction Pharmaceutical profit margins are being squeezed by rising costs, high promotional investment and a pipeline crisis. Alongside restoring productivity companies must implement strategies that fully exploit the commercial potential of existing molecules. Whether seeking to expand a market or protect sales following patent expiry, reformulation is one strategy available for maximizing ROI. Scope Benchmarks the performance of reformulations against competitive differentiation, promotional support, pricing and launch timing in the US market Review of reformulations in cardiovascular, CNS, dermatology, gastrointestinal, infectious disease, oncology, urology and women's health therapy areas Case studies, analysis and interactive Datapack based on a basket of more than 30 reformulations launched in the US market between Q1 1999 and Q4 2003 Examines the role of reformulations in growing sales, expanding the scope of molecules, countering generics and seizing untapped market opportunities Highlights While only 41% of reformulations are deemed to be therapeutically superior to other formulations within their brand franchises, even when poorly differentiated, manufacturers can still achieve market success through effectively managing relative pricing, promotional support and launch timing. Companies are effectively employing reformulations to boost franchise growth. 87% of 'switch and grow' franchises exhibited an increase in the rate of sales growth following reformulation launch. Competitive differentiation and promotional activity are key factors influencing the success of 'switch and grow' reformulations. 'Generic defense' reformulations do not receive the same degree of promotional support as 'switch and grow' reformulations and are not sufficiently differentiated from their predecessors to prevent rapid generic erosion. Manufacturers must review their use of reformulations in anti-generic strategies with a focus on promotional support and timing. |
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Drug delivery notes 
