Cliffhanger - Pharmaceutical Technology

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Cliffhanger


Pharmaceutical Technology Europe
Volume 24, Issue 2


Rich Whitworth
"The patent expiry of several major blockbuster drugs worth $150 billion [€119 billion] between 2010 and 2017 will fuel the growth of the global generic pharmaceuticals market," so says a press release announcing new analysis from Frost & Sullivan. Good news for generics companies and for patients who will potentially have access to lower cost medication, but what about Big Pharma? This lost revenue comes in the midst of an economic low and at a time when R&D pipelines are looking a little shaky. It is unclear as to whether this number also includes biosimilar opportunities; if not, then it could be double trouble. It was interesting to read in the media this week two quite different strategies to counter the patent cliff.

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.

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