[Ed.   In its foolish attempt to make the pharmaceutical industry pay for more and more idiotic, purposeless and wasteful reforms of the NHS Mrs Hewitt, Secretary of State for Health, and this government have been compelling the British medical profession to use generic medicines.   Equally foolishly senior members of the profession, who should know better, have been supporting these demands.

For their part, pharmacists, in an effort to maintain let alone increase, their profits have been sourcing their supply of generics in India.   Boots were highlighted as doing this in the London Evening Standard of 15 November 2006.    Apart from increasing the damage to the British pharma industry, as India is a major source of counterfeit medicines pharmacists may inadvertently be admitting counterfeits drugs into the NHS system and, thereby, putting patients at risk.    Doctors should beware.]

Antihypertensives: Generics striking at heart of the market

London Thursday November 16 2006- Despite almost 200 million people suffering from hypertension or high blood pressure in the western world* alone, the growth rate of the antihypertensive market is actually slowing. In 2005 the antihypertensive market* grew by only 4.3%, and independent market analyst Datamonitor** (DTM.L) forecasts that growth between 2006 and 2010 will slow even further, largely due to the ever-increasing presence of generics in the market. While the generic invasion is slowing branded drug sales in all markets, the US is expected to be the hardest hit. In fact many pharmaceutical companies- including those with strong cardiovascular portfolios currently- are turning their back on the cardiovascular market in favour of more profitable indications, such as oncology.

The generic invasion
The number of sufferers of hypertension is expected to climb to over 210m by 2015, however pharmaceutical companies with an interest in the cardiovascular face a number of challenges which will impact heavily- most notably brand erosion and healthcare reforms, says Datamonitor cardiovascular analyst Laura Greenwood.. "The slow and declining growth rate does not reflect a stationary market, but the battle between the drugs - both branded and generic- that make up the market."

Pfizer’s Norvasc (amlodipine), the biggest selling Calcium Chanel Blocker (CCB) has already lost patent protection in Spain and the UK. In the UK alone, sales of Norvasc decreased by more than 50% between 2004 and 2005. The expected patent expiry of Norvasc in the US in September 2007 is therefore set to be a major event in the antihypertensive market. Genericization of the product is certain to start almost immediately and Dr Reddy’s Laboratories has already attempted to launch a generic version of a slightly different amlodipine salt (amlodipine besylate versus amlodipine mesylate).

Pfizer has attempted to protect amlodipine revenues by launching Caduet (amlodipine and atorvastatin) in advance of the Norvasc patent loss, but so far this strategy has been disappointing, Greenwood says. "The impact of Norvasc’s patent loss in the US on Pfizer’s sales will be very significant, as has been the case in certain EU markets where the Norvasc patent has already expired. With sales of Caduet reaching only $178m in the US in 2005, Pfizer will need to develop additional strategies to protect Norvasc revenues, as Caduet is unlikely to make up the loss in revenues expected after Norvasc loses patent protection," she says.

The first Angiotensin Receptor Blocker (ARB) to lose patent protection will be Merck’s Cozaar (losartan) in Spain in 2007. In the US, Cozaar will lose protection in 2010. This event has the potential to not only dramatically affect the antihypertensive market, but alter its entire structure. Threats of generic and therapeutic substitution alongside money-saving healthcare strategies which have plagued other markets, are now intruding upon the successful ARB class, Greenwood says. "This will have an impact on the whole antihypertensive market. As the ARBs are popular therapies and are the last major class to be losing patent protection, the effects on the whole market may be damaging."

"Throughout the next ten years, the market will see a rise and fall of different therapies and drug classes as the impact of patent expiries and generic versions hit home," she says.

Healthcare reforms
In the US, healthcare regulations and reforms are working to make generic substitution policies widely implemented. Pharmacists are now incentivized to dispense generics, generic ATM type dispensers make dispensing generics easier, patient co-payments are less for generic products, and some healthcare providers are giving away generics free. The generic revolution is only limited by physicians that order ‘dispense as written’ which can prevent substitution. Carve-out systems (a group of drugs that are not allowed to be substituted for generics due to the generic version being slightly different to the branded product) also prevent generic substitution, as does the fact that patient awareness of generics has only recently been addressed.

In the face of sky-rocketing healthcare costs, public and private payers across Europe, the US and Japan are all implementing cost containment policies, which are having an impact on the margins of drug-makers. The pricing of a drug has a direct impact on the revenue created for the company: sales, and thus returns, can be restricted if a drug is priced too high or too low, Greenwood says. "Selecting the correct pricing level is an important factor in ensuring a strong return on investment (ROI). Drug pricing strategies can be segmented into three stages: setting the price for a new drug, maintaining the price throughout the drug’s life, and finally identifying the correct price to use when the drug loses its patent protection."

An equally important strategy in identifying the correct price for a drug in generating strong ROI is the level of reimbursement that a manufacturer is able to capture for its drug. The industry’s awareness of the importance of reimbursement has gained momentum over the past few years, bringing with it a change in attitude. Drug developers used to address reimbursement in a similar way to gaining approval; by focusing on efficacy and safety, with pricing and reimbursement factors (P&R) playing only a minimal role, Greenwood says. "This has changed in recent years, with P&R factors being prioritized earlier in the drug development process and playing a more central role in clinical trial design. However, it only adds to the challenges faced by the antihypertensives market."

Big pharma changes strategy
The snowball effect of all this is that a number of large pharmaceutical companies are actually re-examining their involvement in the cardiovascular market. Novartis has enjoyed previous success in the cardiovascular franchise but is now actively exploring other avenues of growth, steering away from further development in the antihypertensive market. While still continuing to enjoy large revenues from its cardiovascular arm, an examination of Novartis’ R&D activities shows that it is now investing elsewhere, where it sees more future profit, Greenwood says.

"Novartis’ focus is instead moving towards oncology, and to other less developed markets that are exploiting new developments and technologies in biologic therapies to deliver sales growth."

"This trend can also be seen in the product-pipeline of other companies, such as Roche, which may have double the number of products in development in areas like oncology than in the cardio-related markets. Big pharma are strategically shifting their developments to gain a maximum return of investment, however, with less R&D investment in the cardio-related markets, there is less chance for the development of new and novel products to advance treatment for diseases like hypertension," she says.

Datamonitor’s (DTM.L) report Commercial Insight: Antihypertensives - New challenges for a maturing market, provides in-depth analysis of the current status and future potential of the marketed antihypertensive drug classes across the seven major markets. Drug classes covered include ACE inhibitors, ARBs, CCBs, Beta Blockers, Diuretics and Renin Inhibitors.

(16/11/06)