Generics to save $70 bn
NEW YORK — The U.S. healthcare system could get at least $70 billion in savings over the next four years thanks to loss of patent protection for branded drugs, according to published reports.
IMS Health SVP Murray Aitken said at the Reuters Health Summit that generics also would increase their dominance in terms of prescriptions dispensed, increasing from 77% during the first half of this year to perhaps 85% by 2014, Reuters reported.
A number of blockbuster drugs are expected to lose patent protection and face generic competition in the years to come, notably Pfizer’s cholesterol drug Lipitor (atorvastatin calcium) –– the world’s top-selling drug, with more than $7 billion in sales in the United States alone, according to IMS –– which will lose protection next year and face generic competition from Ranbaxy Labs.
Three issues that will define 2011
Years 2009 and 2010 were up and down for the generic drug industry and its main trade group, the Generic Pharmaceutical Association. On one hand, there were the departures of president and CEO Kathleen Jaeger and member company Teva Pharmaceutical Industries. On the other, a regulatory approval pathway for follow-on biologics was created — though it granted longer market exclusivity periods to biotech drugs than the GPhA desired — and there were increases in the use of generics, which accounted for 77% of dispensed prescriptions in the first half of 2010, according to IMS Health.
But 2009 and 2010 are behind the industry, literally and figuratively. In interviews with Drug Store News, GPhA VP regulatory science Gordon Johnston and IMS Health VP industry relations Doug Long spoke about three issues that will be important for the industry in 2011 — probably in a good way.
1. Drug safety : Drug approval in the United States is no easy task because of the strength of the Food and Drug Administration’s regulatory system. But the system still has weak points — particularly the inspection of foreign manufacturing plants. According to a September 2010 Government Accountability Office report, while the FDA inspected more than 1,000 domestic manufacturing plants in fiscal 2009, it inspected 424 in other countries, around 11% of the total.
That could change soon. “Whether supply chain safety comes in the form of legislation or FDA regulations, we … expect to see something coming down the pike in 2011,” Johnston said. Long, however, told Drug Store News he didn’t expect to see “anything major” this year.
2. Generic user fees : A perennial problem facing the generic drug industry is the backlog of applications at the FDA’s Office of Generic Drugs — and it keeps getting bigger. According to the GPhA, the number of applications submitted to the office increased from 361 in 2002, to 830 in 2008, creating a backlog of almost 2,000 applications in 2010, according to a presentation by office director Gary Buehler at the GPhA’s 2010 annual meeting. While federal regulations allow six months’ review time for an application, in practice it often takes 21 months.
Johnston said he expected a user fee program to be implemented by 2013. “I expect that a user fee program will be designed and recommended this year, with [the] industry and FDA working together,” he said.
Long agreed. “There is a very good possibility that user fees will be passed by Congress in 2011,” he said.
3. Patent settlements : When a generics company wants to market its version of a drug ahead of the branded version’s patent expiration, it will file an application with a paragraph-IV certification, asserting the patent is invalid, unenforceable or won’t be infringed, thus usually prompting a lawsuit from the branded drug’s manufacturer. In most cases, the two companies will settle, allowing the generics company to market its drug ahead of patent expiration in exchange for not immediately launching. Delaying launch after a patent has expired would be illegal.
The Federal Trade Commission has assailed the settlements as “pay-for-delay” deals and has sought to ban them, asserting they cost taxpayers $3.5 billion per year. The FTC may find its efforts frustrated with the Republican majority in the House, but it could use other means as well. Johnston said the outcome in Congress was difficult to determine. “Regardless of what happens on the legislative front, this issue may go to the Supreme Court to decide,” Long said.
ReportersNotebook — Chain Pharmacy, 2/7/11
SUPPLIER NEWS — The Food and Drug Administration has approved a generic drug made by Watson Pharmaceuticals for cancer-related breakthrough pain, Watson said. The drug is a generic version of Cephalon’s Fentora, which had sales of around $179 million during the 12-month period ended in November 2010, according to IMS Health.
The FDA has approved a generic version of Duramed’s contraceptive Seasonale (levonorgestrel and ethinyl estradiol) made by Sandoz, the generics arm of Swiss drug maker Novartis. Branded and generic versions of Seasonale had sales of around $91 million during the 12 months ended in November 2010, according to IMS Health.
Spectrum Pharmaceuticals and Viropro plan to develop a biosimilar of Genentech’s Rituxan (rituximab), used to treat cancer and autoimmune disorders. The companies plan to develop the biosimilar in anticipation of expirations on Rituxan’s patent protection over the next few years. Rituxan had sales of $5.6 billion in 2009, according to Spectrum.
Merck plans to develop biosimilars under a partnership with drug industry services organization Parexel International that will give Merck access to its clinical and regulatory services. Financial terms of the deal were not disclosed.
Mylan subsidiary Dey Pharma has launched MyEpiPenn, a smart phone application for patients at risk of severe allergic reactions, which is tied to its EpiPen product.