In anticipation of the patent expiry of Diovan (valsartan, a medication to manage high blood pressure), Novartis recently announced a US workforce restructure totalling some 2000 job losses, mainly in sales. While Novartis acknowledged that the steps to be taken were difficult, it also stated that they were necessary to free up resources to invest in the future—presumably in the form of strengthened R&D efforts. The changes are expected to take place in the second quarter of this year.
On the other side of the coin though, according to recent reports, Pfizer's Lipitor sales have levelled off rather than continuing to plummet since losing US patent protection on November 30. If media reports are to be believed, the reason for Pfizer being able to hang onto a lion's share of market is down to fighting hard on the frontline of sales and a heavily advertised copay programme called "Lipitor For You". This is a somewhat unusual tactic; in the past, generic competition and subsequent declining revenue was considered a lost cause. All eyes are on Pfizer.This optimistic versus pessimistic approach puts me in mind of questions over R&D strategies. Hopeful companies are throwing extra resources at R&D while others are cutting back, but frankly, neither camp is fully confident about the risks of their choice.
One thing is certain: generics are destined for continued growth. The question that remains is what effect spiralling prices from increasing cost competition could have on quality.