Generic Market in the US Set For Growth

Pharma IQ

With Pfizer's blockbuster Lipitor set to fall off the patent cliff at the end of November, the generics market is being viewed with a new focus.

Over the past few years, the market in the United States has experienced huge growth, despite the global recession. Countless new products have been introduced and the market was valued at $81.5 billion (£51.7 billion) in 2010, according to figures from RNCOS.

As the name suggests, the Booming US Generic Drug Market report predicted significant future growth in the sector in the coming years. By 2013, it expects the value of the market to increase to over $100 billion.

Driving much of this growth is the number of generic drugs issued as prescriptions, the report notes. While just 28 percent of the United States market terms is expected to be held by generics, by 2013 it is thought around 80 percent of prescriptions dispensed could be for generics.

Independent analysis conducted by IMS Health on behalf of the Generic Pharmaceutical Association (GPhA) found that during 2010 alone, generic drug use generated $158 billion in savings, which equates to around $3 billion per week.

Ralph G Neas, GPhA President and chief executive officer, said: "It is significant that the savings delivered by generics are system-wide and not the result of simply cost shifting. As such, the savings gained through the use of generic medicines benefit both the public and private sectors."

In particular, the report advocated the greater use of generics by Medicaid, claiming that boosting generic drug use by two percentage points could lead to savings of more than $1.3 billion annually. Currently, 70 percent of Medicaid prescriptions are for generics, compared to 78 percent overall.

Neas added: "When the generic drug industry was established by Congress in 1984, it was predicted that generic drugs would save our country $1 billion a year.

"As this analysis shows, the savings generated by generic prescription drugs are now three times that amount every week."

However, not all are as enthusiastic about the strong future generics are expected to have in the United States, in particular those who are going to see their blockbuster drugs fall off the patent cliff in the not too distant future.

AstraZeneca recently announced its plans to reduce its workforce by around 400 at its Wilmington headquarters and some non-sales field-based staff. The moved formed part of a general streamlining of operations, which were said to be the result of "continuing growth of generic medicines" among other things.

Tensions are also ramping up between major players in the pharmaceutical company, as Pfizer prepares for its Lipitor patent to expire on November 30th. The company has launched a patent suit against Merck for its new Lipitor-plus-Zetia combination pill.

According to figures from the Wall Street Journal, the pill could bring in $500 million by 2015, but Pfizer says it infringes a patent on Lipitor's structure which is not set to expire until 2017.

Regardless of the final decision, the drug has now been subject to a 30-month regulatory delay, which could in the long-run harm its commercial viability. The same patent has also been used in other lawsuits.

Issues like these relating to patents are only likely to increase as the generics market grows and more blockbusters fall off the cliff.

In 2011, so-called pro-consumer patent settlements have played a key role in the release of generics, GPhA claims.

Figures from the body suggest 17 of the 23 generics hitting shelves this year will be available before the patent expires because of settlements made.

GPhA executive director Bob Billings said: "It is also important to recognise that many of these drugs — including the generic versions of Lipitor and Plavix - will become available later this year because of a pro-consumer patent settlement.

"If such agreements were outlawed, patients could be forced to wait at least an additional five years for access to either of these lifesaving medications, a delay that would cost consumers and the United States healthcare system billions of dollars."

Plavix has already succeeded in having its patent extended for six months, and companies understandably will not be too keen on giving up their patents. However, the figures suggest this is not going to dampen the 'booming' market in the United States.

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