Drug Delivery Ka-Ching!

The drug-delivery market came close to shattering the $10 billion ceiling last year, driven by looming patent expirations, consumer demand for easier-to-use products, and new biologics that can't be administered in pill form.

Not surprisingly, pharma has taken note of the trend, with more and more companies adjusting business strategies to take advantage of these new technologies, according to Greystone Associates. The tech consulting firm reports that the number of alliances between drug makers and drug deliverers has escalated over the past year, and often these partnerships involved administering an old drug in a new way--as a tool to extend patent life or even restart the clock on a generic drug.

The therapeutic areas benefiting from the technology span the spectrum, including cancer, ophthalmology, attention deficit and hyperactivity disorder, and virology (most notably flu vaccines.) Last week, for instance, Teikoku and Dermatrends signed a deal to codevelop a transdermal patch for schizophrenia and bipolar disorder. Two high-profile acquisitions last year also met drug-delivery needs: Teva tapped Antares to be its sole provider of mini-needle and needle-free injection technology, while Barr Laboratories cited Pliva's ointment and injection technologies as key drivers in its decision to buy the firm.

The largest portion of the $9.8 billion market--$7.3 billion--belongs to implantable, sustained-release, and targeted injectable products, according to a study from Kalorama Information, and this segment is expected to rake in $9 billion by 2010. A smaller piece belongs to needle-free technologies, which are more convenient for patients and safer for healthcare workers. That segment should reach in $3 billion by 2010, the report found.

But not all patient-friendlier drug delivery has been rosy. Pfizer had tagged its inhaled insulin product, Exubera, as another blockbuster in its arsenal, but so far uptake has been slow because of reimbursement and safety issues. The company has tried to remedy these problems through aggressive contracting with payers and a 24-7 call center staffed by healthcare professionals. "Sales to date have been minimal, reflecting a phased rollout of this product in connection with our education and training programs for healthcare specialists" is how Pfizer put it in its annual report.