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Generic assault lurks for branded heart-health meds

BY Drew Buono

At the beginning of last year, the heart disease market was expected to see large capital gains and new drug arrivals that would further the growth in the market. Now, as the retail pharmacy market edges closer and closer to the years when patents will begin to expire on the top-selling drugs in this category, the danger is that the pipeline is drying up and the sales figures will be negatively impacted by the impending patent expirations.

The cardiovascular market has been one of the mainstays of the pharmaceutical industry over the last 20 years. But as the market matures, sales growth is expected to be negligible as leading brands lose patent protection and companies are unable to develop new products to replace revenue streams.

The loss of patent life on big-selling pioneer medicines affects the whole branded pharmaceuticals industry, but it is particularly pronounced within the arena of cardiovascular medications. Six of the current top 10 brands, totaling $30.9 billion in sales in the United States, Japan and major European Union countries, are slated to lose patent protection between 2010 and 2013, according to Datamonitor.

Last year, the heart market saw the introduction of two drugs by Novartis: Tekturna and Exforge. Tekturna became the first new treatment for high blood pressure in more than a decade when it was approved. The drug acts within the renin system, which is central to blood pressure regulation. Exforge is a combination of two drugs, Diovan and Norvasc, and is used to treat hypertension.

Top cholesterol products by U.S. sales dollars*

Source: IMS Health, IMS National Sales Perspectives*January to June 2007 in thousands
HMG-COA Reductase Inhib Rank Total dollar* $ 6,397,057 % market share 100.0% % growth -26% 2006 dollar total*$16,510,453
Lipitor 1 4,162,145 65.1 -6 8,674,944
Crestor 2 830,301 13.0 42 1,320,364
Simvastatin 3 743,022 11.6 382 1,502,049
Lovastatin 4 166,797 2.6 19 278,156
Zocor 5 157,016 2.5 -94 3,188,076
Total others   337,775 5.3 -64 1,546,866
Cholesterol Red Comb   1,277,351 100.0 38 2,023,898
Vytorin 1 1,197,102 93.7 42 1,861,372
Advicor 2 80,249 6.3 1 162,507
Pravigard Pac 3 0 0.0 -98 19
Cholesterol absorption   897,130 100.0 25 1,539,231
Zetia 1 897,130 100.0 25 1,539,231

For the heart-health therapeutic class in general, however, the future may be a different story. Generic competition is expected to wipe $67 billion from top companies’ annual U.S. sales between 2007 and 2012 as more than three dozen drugs lose patent protection. That is roughly half of the companies’ combined 2007 U.S. sales.

“The volume of sales will continue to increase for these drugs, but revenues will drop because we will see more generics on the market,” noted a report from Datamonitor. Result: The heart-health market will take a significant hit over the next couple of years as more patents expire, researchers predicted.

Pfizer will be particularly hard-hit when its patent on Lipitor, the cholesterol-lowering blockbuster that ranks as the most successful drug ever, expires as early as 2010. Pharmacists and managed care companies are likely to aggressively fill prescriptions with generics, reducing annual Lipitor sales to a fraction of last year’s $13 billion.

Torcetrapib was supposed to help Pfizer offset its Lipitor patent loss, but the drug was withdrawn from consideration by the FDA due to the number of deaths that occurred during clinical trials. It was expected that since Torcetrapib raised HDL, or good cholesterol, and Lipitor lowered LDL, or bad cholesterol, that Pfizer would have eventually combined the two into one drug.

Pfizer reportedly spent more than $800 million on the drug’s development before pulling the plug.

Another cholesterol drug facing scrutiny—this time by Congress—is Zetia. The House Committee on Energy and Commerce recently asked the makers of the drug, Merck and Schering-Plough, for more information as to what is taking the two companies so long in releasing the information from a drug trial in April 2006.

The trial, named Enhance, covered 720 patients with very high cholesterol, and was intended to prove that the combination of Zetia and an older cholesterol medicine would reduce the growth of plaque in the arteries more than the older medicine alone.

Schering and Merck originally were expected to release the results of the trial at a conference in spring 2007. That release date was pushed back to fall 2007, and two months ago, after being criticized by cardiologists, the companies said they would release the results in March 2008.

Zetia is one of the newer cholesterol medicines. It works by limiting the body’s absorption of cholesterol, unlike such statin drugs as Lipitor, which slow the liver’s ability to produce cholesterol.

Zetia racked up sales of almost $900 million for the first half of 2007, though this paled in comparison to the more than $4 billion brought in by Lipitor during the same period.

The biggest drug in the heart-health category to be affected by a generic introduction has to be Zocor.

In 2005—the last full year of market exclusivity for Zocor before the onset of generic competition—the big-selling statin drug brought in almost $4.5 billion. In 2006, that total fell to a little more than $3 billion in the face of the launch of the first me-too version of the product, simvastatin, which generated more than $1.5 billion in sales between the time of its rollout in mid-2006 to the end of the year.

Nevertheless, while Merck took a big hit with Zocor’s loss of patent protection, the company hopes to bounce back in 2008 with a few new drugs for the heart-health category.

Among them: Merck’s experimental drug anacetrapib, which is aimed at both raising levels of good cholesterol and lowering bad cholesterol. Anacetrapib will enter final-stage testing in 2008.

Merck also plans to market the drug Cordaptive, a niacin drug used to raise good cholesterol. Cordaptive could have annual sales of $420 million by 2012, according to projections. Also, last month a new study showed that Schering-Plough’s erectile dysfunction drug Levitra could successfully treat patients with high cholesterol.

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S&P revises outlook on Rite Aid

BY Michael Johnsen

NEW YORK Standard & Poor’s Ratings Services revised its outlook on chain drug retailer Rite Aid to negative from stable, the firm reported Friday. At the same time, S&P affirmed the ‘B’ corporate credit rating on Rite Aid.

“The outlook change reflects the company’s weak same-store sales and our expectation that this trend will continue over the next few quarters,” stated Standard & Poor’s credit analyst Diane Shand. Rite Aid faces a more cautious consumer, strong growth of lower-priced generics and intense competition, she said. In addition, the current environment could make it more challenging for the company to integrate its recently-acquired Brooks/Eckerd stores.

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Boston Mayor decries in-store health clinics

BY Antoinette Alexander

BOSTON On the heels of the Massachusetts Public Health Council approving regulations allowing for in-store health clinics in the state, Boston Mayor Thomas Menino is reportedly looking to ban the clinics from opening in the city.

The decision by the health council “jeopardizes patient safety,” Menino said in a written statement, according to a Boston Globe report. “Limited service medical clinics run by merchants in for-profit corporations will seriously compromise quality of care and hygiene. Allowing retailers to make money off of sick people is wrong.”

The newspaper also reported that, in a separate letter, the mayor urged members of the city’s Public Health Commission to consider banning the clinics from opening within Boston. CVS has plans to open 20 to 30 MinuteClinics in the Greater Boston area but it is unclear how many of those would be within the city’s limits.

Defending its decision to allow clinics to operate, the state Public Health Council issued a statement that read: “The members of the Public Health Council were deliberative and thoughtful in their review of the limited service clinic regulation. We believe these types of clinics, operated either as part of a retail operation or in a nonprofit setting, can provide the public access to safe, convenient, and quality care for minor health issues.”

Officials at MinuteClinic were not immediately available for comment.

On Jan. 9, the state Public Health Council approved rules for limited service medical clinics. The new regulations took effect immediately.

“This is a new model for health care delivery that can benefit many people in the Commonwealth. These regulations will improve consumer convenience and make it easier for non-profit organizations to establish satellite clinics in a variety of settings to serve vulnerable populations,” stated secretary of Health and Human Services JudyAnn Bigby in a statement issued after the approval.

Added John Auerbach, commissioner of the Department of Public Health and chair of the PHC, “Properly regulated, these types of clinics will serve an important function, making care for minor medical care more convenient. The council was mindful of not wanting to create a stand-alone system of health care, so these regulations require coordination and linkages to primary care providers.”

The approval came at the end of a long review process that included two public hearings and the submission of hundreds of pages of testimony regarding the regulations, including testimony in favor of the clinics from the Convenient Care Association.

“We appreciate the Public Health Council’s careful deliberation regarding the adopted regulations that will now guide the operation of limited services clinics in Massachusetts. These retail-based clinics are providing consumers in 35 other states with easy access to high-quality, affordable health care in the face of a nationwide primary care physician shortage. Since this growing shortage is well documented in Massachusetts, and its related health care access issues have been exacerbated by the state’s near-universal healthcare coverage, we appreciate the Council embracing limited services clinics as a partial solution to these serious problems,” said Web Golinkin, president of the CCA and chief executive officer of in-store clinic operator RediClinic, in a statement issued after the council’s decision.

Sparking the move to create specialized regulations for these clinics was CVS’ application to open a MinuteClinic in one of its stores in Weymouth. According to the council, early in the application review process it became clear that DPH regulations governing medical clinics did not address the operation of medical clinics with limited scope of services. Rather than consider applications requiring numerous waivers from full-service clinic regulations, the department decided to create a specialized set of rules.

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