Specialty Rx offers pharma a patent cliff parachute

NEW YORK —While Big Pharma hurdles toward the edge of the patent cliff, some of the latest emerging data seem to indicate that the cliff won’t be too far off the ground. It’s been widely reported that large drug makers are in trouble, with many of their top-selling drugs set to lose patent protection over the next decade—chief among them Pfizer’s Lipitor (atorvastatin), which IMS Health ranks as the top-selling drug, with sales of $7.5 billion in 2009. Lipitor will lose patent protection next year, when Ranbaxy Labs will begin marketing its own version.

But now, it seems some big drug makers are set to bounce back and stay high. Thanks to its acquisition of Wyeth, Pfizer got a major revenue boost from specialty drugs in first-quarter 2010, with sales increasing by 141%, to $3.5 billion. Biotech drugs increased by 44%, from $10.1 billion in first-quarter 2009 to $14.5 billion in 2010. Merck, thanks to its May 11 acquisition of Schering-Plough, that it had more than 20 investigational drugs in late-stage clinical development, with a pipeline that included such drugs as the osteoporosis treatment MK-0822 (odanacatib), the hepatitis C treatment SCH 503034 (boceprevir) and the cancer treatment MK-0646 (dalotuzumab).

It’s no coincidence the two companies are banking on high-cost specialty drugs. According to some experts, it’s specialty drugs with large price tags rather than conventional drugs with large patient populations that will be the sources of growth for Big Pharma. According to IMS Health, a number of specialty drugs, including Pfizer’s and Amgen’s autoimmune disorder drug Enbrel (etanercept) and Genentech’s cancer treatment Avastin (bevacizumab), already had blockbuster-level 2009 sales of $3.3 billion and $3 billion, respectively, though neither made IMS’ list of the top 15 drugs measured by dispensed prescriptions.

This trend will have major implications in the years to come, according to British drug market analysis firm EvaluatePharma. The firm forecasted that by 2016, Pfizer and Merck will be the top two drug makers in the world, followed by Novartis, Roche and Sanofi-Aventis, which also have significant presences in the specialty drug market. Enbrel will become the third highest-selling drug in the world, with forecasted sales of $7.3 billion, while the autoimmune disorder drug Remicade (infliximab)—made by Merck, Johnson & Johnson and Mitsubishi Tanabe—will take the seventh spot, with $5.7 billion in sales. Biotech drugs for treating autoimmune disorders and cancer will dominate the market, while GlaxoSmithKline’s asthma and chronic obstructive pulmonary disease drug Advair (fluticasone and salmeterol) and AstraZeneca’s cholesterol drug Crestor (rosuvastatin) will have the highest sales among conventional drugs.

EvaluatePharma CEO Jonathan de Pass said he expects “huge growth in sales of complex biologics, driven in part by the premium price they can command and the industry’s productivity in getting these compounds to market. We will also see generics players…achieving impressive growth due to a continued sales erosion of blockbuster products coming off patent.”

Worldwide prescription pharmaceutical sales


  Worldwide annual sales (US$ billions) Market share Market rank *Proforma data in 2009 (Pfizer + Wyeth/Merck + Schering-Plough) † Ranked by projected 2016 sales Source: Evaluate Pharma World Preview 2016
Rank† Company 2009 2016 Annual growth (’09-’16) 2009 2016 2009 2016
1 Pfizer* $55.3 $47.1 -2% 8.6% 6.0% 1 1
2 Merck* 41.6 46.3 2 6.5 5.9 2 2
3 Novartis 37.3 46.0 3 5.8 5.9 4 3
4 Roche 36.0 43.9 3 5.6 5.6 6 4
5 Sanofi-Aventis 38.3 38.9 0 6.0 5.0 3 5
6 GlaxoSmithKline 36.3 38.7 1 5.6 4.9 5 6
7 Abbott Laboratories 16.5 26.1 7 2.6 3.3 10 7
8 Johnson & Johnson 21.3 24.8 2 3.3 3.2 8 8
9 AstraZeneca 31.6 22.1 -5 4.9 2.8 7 9
10 Teva Pharmaceutical Industries 12.6 20.8 7 2.0 2.7 15 10