Pharma Forecast: Into the Woods - Pharmaceutical Executive


Pharma Forecast: Into the Woods

Pharmaceutical Executive

Welcome to the New Normal.

Profits, Patents, and Products

Despite the doomsaying, pharma remains immensely profitable. In 2008, the global market is expected to grow 5 to 6 percent to a new high of $745 billion. On the 2006 Fortune 500 list, only Big Oil outperformed Big Pharma.

But, as IMS forecasts, it will be a very different market:
  • The top-seven markets will account for just under half of global sales growth, their lowest amount ever.
  • US-market sales have dropped from one-half to one-third of the global total over the past five years.
  • This year will also mark the first time the worldwide primary-care drug market heads south. Growth is limited to the specialty market and, of course, generics, both of which will increase by 15 percent.

Daniel Kracov, Arnold & Porter
"There's a tidal wave of generic drugs, and we are just in the beginning of the tidal wave," says Medco Health Solutions' Laizer Kornwasser. Generics will account for two-thirds of all US prescriptions this year, as payers squeeze spending on the spiking demand for meds. Of the estimated $70 billion total for generic sales, $20 billion will be the result of name-brand blockbusters losing market exclusivity this year. The CNS category will take the biggest hit, with two cash cows, Johnson & Johnson's antipsychotic Risperdal and Wyeth's antidepressant Effexor XR (pending resolution of a patent challenge by Teva), going generic. Meantime, J&J, GlaxoSmithKline, and Abbott will have fits as their three blockbuster anticonvulsants—Topamax, Lamictal, and Depakote, respectively—fall to knockoffs. Merck's Fosamax for osteoporosis and Wyeth's Protonix for acid reflux will join them.

And what new starlets will replace these old stalwarts? The 2008 pipeline will deliver 25 to 30 innovative products, says IMS, a full 80 percent in the specialty category. However, given the sorry rate of recent approvals, it's anybody's guess how many will make it to market.

Oncology is out in front with a crop of targeted treatments for small populations worth $45 billion, or 17 percent, of market growth. Leading the list are two human monoclonal antibodies, Pfizer's tremelimumab (formerly ticilimumab) and Bristol-Myers Squibb's ipilimumab for malignant melanoma. For chronic lymphocytic leukemia, Cephalon's Treanda will vie with HuMax-CD20, for which Glaxo just inked a $2.1 billion licensing deal with little Danish biotech Genmab. Another biotech, Tennessee-based GTx, is hoping to market its first product, Acapodene, for prostate cancer.

There are important advances against other diseases too. Pfizer, J&J, and Targanta Therapeutics all expect to file MRSA-battling antibiotics. In HIV, Schering-Plough's vicriviroc, a CCR5 entry inhibitor, is due to compete with Pfizer's first-in-class contender, while Merck will launch its novel integrase inhibitor, Raltegravir, approved late last year.

In the primary care market, big-ticket launches are few. Closely watched will be Lilly's novel blood thinner, the potent-but-problematic Prasugrel; Abbott's Simcor, a combo of Niaspan and simvastatin, a generic version of Zocor; and Roche's rheumatoid arthritis drug, Actemra. Bazedoxifene, Wyeth/Ligand's osteoporosis drug, could make a splash as Merck's Fosamax goes off patent.

Two of the industry's most trumpeted-but-troubled blockbusters-to-be could escape FDA's safety snares on their second try if Novartis and Sanofi-Aventis resubmit Galvus and Acomplia, respectively, both for diabetes.


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