These look to be good times for the generic drug makers. Copycat drugs accounted for 75% of the U.S. prescription drug volume last year, up from 57% just five years ago, data tracker IMS Health reported just last week.
All well and good, but even with billions in potential sales coming available as branded blockbusters lose their patent protection, makers of generics are likely to face a tougher road ahead on several fronts, the WSJ’s Heard on the Street column argues this morning. The key dangers cited in the column:
- New upstarts are boosting generic competition. One analyst cites the case of Camber Pharmaceuticals’ recently introduced generic version of the blood-pressure drug Norvasc. It took nine percentage points of market share over just a few months, largely at the expense of Mylan, itself a big generic manufacturer.
- Branded giants like Pfizer have gained experience with generics. Pfizer’s market share of its epilepsy drug Neurontin slipped to 10% when the compound went off patent in 2004, but has said that after it introduced a generic Neurontin, its share returned to 50% of U.S. prescriptions.
- Stepped-up product recalls make safety a greater concern. The big Indian generic maker Dr. Reddy’s has recently recalled batches of four different drugs and slowed overall production.
One positive for generic makers is that the new health legislation in the U.S. doesn’t seem to pose problems for them, the column says. A proposal to do away with so-called pay-for-delay deals — under which generic and branded makers reach deals that often slow the introduction of the copycat versions — didn’t make the final version of the overhaul bill.
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