Pace Alliance News
OUTLOOK IS CUT FOR U.S. DRUG SALES
Gain of 1%-2% Now Seen; Emerging Markets Increasingly Picking Up Some Slack
Source: Wall Street Journal, October 29, 2008
Pharmaceutical sales in the U.S., the world’s biggest market, will grow far less than originally forecast this year and are in for meager growth next year as economic turmoil and a lack of new products take their toll, according to a closely watched annual forecast.
U.S. drug sales this year are expected to rise just 1% to 2%, to as much as $297 billion, according to IMS Health Inc. The consulting firm forecasts U.S. sales to rise another 1% to 2% next year. IMS a year ago forecast 4% to 5% sales growth for this year.
The dramatic slowdown is helping reshape the industry by propelling drug companies to devote more attention and resources to emerging markets. Early this decade, the U.S. accounted for 40% to 50% of the growth in global pharmaceutical sales each year. Next year, the U.S. will account for just 9%, IMS forecast in its report, which was scheduled for release Wednesday.
Emerging markets should help the global pharmaceutical market grow 4.5% to 5.5% to as much as $830 billion next year. But with the global economy in flux, IMS said an exact forecast is difficult. IMS includes branded and generic prescription drugs in its forecast.
With emerging markets increasingly picking up the slack, drug companies are scrambling to increase their sales forces in such countries. GlaxoSmithKline PLC, Novartis AG and Sanofi-Aventis SA have been among the most aggressive at introducing new products in emerging markets. “It’s quite a dramatic shift,” Murray Aitken, senior vice president of Healthcare Insight at IMS, said in an interview.
The top seven emerging markets will account for about 34% of global sales growth next year, up from 7% in 2000, IMS said. But sales could be hurt if economic turmoil continues in the top emerging markets, IMS said. Many consumers in countries such as Brazil, India and Russia pay out-of-pocket for drugs, so any damage to those economies could quickly affect drug sales.
In the U.S., economic uncertainty appears to be making Americans less likely to visit their doctors or to fill prescriptions, hurting drug sales, Mr. Aitken said. Also, drug companies aren’t discovering as many new drugs these days, and the U.S. Food and Drug Administration is approving fewer medicines as it becomes more safety conscious.
Insurers also are hurting sales by not quickly covering new drugs and by pushing consumers and doctors toward low-cost generic drugs, Mr. Aitken said. Novartis’s Tekturna for high blood pressure, for example, has been a weak starter because there are many good generic drugs for hypertension on the market.
That said, IMS also expects a slowdown in generic drug sales. Intense competition among generic-drug makers in the U.S. and Europe is driving down prices. IMS predicted the global generic market will grow by 5% to 7% next year, to more than $68 billion, down from double-digit growth in the past.
WELLBUTRIN GENERIC FACES STUDY
Source: Wall Street Journal, September 23, 2008
Five months after declaring a generic version of antidepressant Wellbutrin XL safe, the U.S. Food and Drug Administration says it is prepared to conduct a human trial to get to the bottom of consumer complaints about the drug.
In April, the FDA released an evaluation of the once-daily generic drug, which is made by Impax Laboratories Inc. and distributed by Teva Pharmaceuticals Ltd., calling the medicine a “safe and effective choice for consumers.”
The review was prompted by hundreds of posting on the People’s Pharmacy Web site, which contained complaints of side effects from patients who switched to the less-expensive generic version of the drug, called Budeprion XL. An independent study published by ConsumerLab.com showed that the generic dissolved more rapidly than the branded version, made by Canada’s Biovail Corp. and sold by GlaxoSmithKline PLC.
“The FDA agrees it is important to study further the cause of these reports,” agency spokeswoman Sandy Walsh said.
More than 100 complaints about the drug were filed with the FDA between December 2006 and the end of this January. Among the most common complaints were that the drug was ineffective or aggravated the condition, or caused nausea, anxiety or headache.
Joe Graedon, a pharmacologist and co-founder of the People’s Pharmacy, wasn’t satisfied with the FDA review and says complaints about the generic are still being logged on his Web site. He argued that the agency’s probe was unsatisfactory because it was based on data from the 150-milligram dose that is at the center of the complaints.
Mr. Graedon said there was a “consensus” by the end of the meeting that the two sides could collaborate on a study that would involve patients who reported problems with the generic after taking the branded version. But he can’t begin a recruitment effort until he is given the details of the study design, and he is still waiting to hear from the FDA on that.
Ms. Walsh said the FDA continues to support its conclusions released in April. While it believes that critics “are attributing the wrong cause for the problem,” the agency also believes the complaints are “sincere” and is therefore prepared to do more work on the matter. “The FDA agrees it is important to study further if there is some specific reason…for the product to be not effective in these patients,” she said.
Officials from Teva weren’t available to comment.
DRUG CO-PAYS FALL AS GENERIC USE INCREASES
Source: AP, April 17; Express Scripts; Bear Stearns & Co., Inc.
According to a report by Express Scripts, the average prescription drug copay in 2007 decreased for the first time in five years, dropping by 25 cents to $13.20. The report attributed the decrease to an increase in the number of customers who switched to generics. We would argue that the $0.25 drop in copay’s is not proportional to the increase in generic utilization. This implies that Express Scripts is not passing along the proportional cost savings on generics to customers through lower copays. It could b argued that a $10 to $15 copay for generic simvastatin (generic name for Zocor) or generic fluoxetine (generic name for Prozac) are at excessive levels. For example, a 30 day supply of simvastatin 10 mg is only $0.90 and fluoxetine 20 mg is only $0.45, providing a material profit margin on generic drugs. Express Scripts analysts found that 64% of claims filed in 2007 involved generic drugs, compared with 42% in 2002.
The report said that the average copay for preferred brand-name drugs increased by $4.52 to $19.18 between 2002 and 2007, and the average copay for nonpreferred brand-name products increased by $11.28 to $28.44 during the same period. By comparison, the average copay for generic drugs increased by 86 cents to $7.57. The report is available at www.express-scripts.com/industryresearch/industryreports/drugtrendreport/2007.
