A major marketing campaign has allowed Allergan to go against the grain of Rx-to-OTC switching, but with at least three competitors angling for a piece of the dry-eye market, the maverick firm can't get too comfortable.
The company--best known for turning an eye-spasm drug into cosmetic bonanza Botox--is now seeing returns on its marketing investment in Restasis, a prescription eye drop for chronic dry eye.
"Allergan really had to change the paradigm of treatment from over-the-counter remedies to prescription remedies--which is a little bit against the current," said Calvin Roberts, an ophthalmologist at the Weill Medical College of Cornell University. "They persevered--and it's now opened up this field."
The anti-inflammatory drug encountered resistance from physicians after its 2002 approval because of concerns about long-term safety, the length of time it took for patients to see improvement, and its high price tag. Yet Roberts noted that safety doubts have been alleviated, and "many, if not most," formularies now cover Restasis. (An Allergan representative noted that about 95 percent of insurance plans reimburse for Restasis, with patient copays averaging $26.72.)
In its 2006 earnings report, Allergan noted that it hiked the price of Restasis 7 percent, after a 3.5 percent increase in 2005. The product last year brought in $270.2 million in revenue, a 41.6 percent jump over the previous year.
"There's no doubt that dry eye is moving from an over-the-counter palliative paradigm to a prescription therapeutic paradigm," said Eric Donnenfeld, an Allergan consultant and ophthalmologist at Nassau University Medical Center. Aging patients are also asking their doctors about the eye drop, which has been heavily promoted with a celebrity campaign. "Patients are definitely more knowledgeable. It's the Baby-Boomers who are taking control of their medical care," Donnenfeld added.
Factors like an aging population and a greater demand for LASIK surgery have increased the number of dry-eye complaints, which together account for about 25 percent of patient cases, according to Elise Brisco, an optometrist at the Hollywood Vision Center in Los Angeles and a spokesperson for the California Optometric Association. "Restasis is not for everyone," she said, since it only treats inflammatory conditions, "but when it works, it works well."
Over the past two years, Allergan has expanded its sales force and marketing budget; its selling, general, and administrative expenses increased 18.3 percent in 2006, primarily due to the Restasis campaign.
That push has occurred alongside changes in how doctors approach the condition, and the Wilmer Eye Institute recently assembled an international panel to create a single set of treatment guidelines. Among its recommendations: more aggressive use of anti-inflammatory drugs like Restasis for patients with moderate symptoms.
Not surprisingly, competitors are revving up to give Restasis a run for its money. Inspire has been in back-and-forth discussions with FDA since 2003 over Prolacria, while Alcon and biotech Lantibio are betting on treatments that are still in Phase III trials.