Generic Industry Experiencing a ‘Golden Age’

An aging population, increasingly consumer-directed healthcare, Medicare Part D and a surge in generic drug availability in key therapeutic areas are the main drivers of growth in the generic market, according to healthcare industry experts.

Generic drugs accounted for 60 percent of total drugs dispensed in 2006, and further growth predicted in 2007 and 2008 make this the “golden age” of generics, Ed Pezalla, vice president and medical director of Prescription Solutions, said at the Pharmaceutical Care Management Association’s Pharmacy Benefit Management & Generic Pharmaceutical Issues Symposium last month.

Medco Chairman and CEO David Snow, who gave the keynote address at the conference, said that more than $62 billion worth of brand drugs are expected to go off patent within the next five years, presenting boundless generic product growth opportunity.

In 2006, new generic drug availability in three important categories — statins, antidepressants and inhaled nasal steroids — resulted in 22 percent growth in generic sales in these classes, Brian Sweet, chief clinical pharmacy officer at WellPoint, said at the conference. Top sellers last year included Teva Pharmaceutical’s generic Zocor (simvastatin) with $911 million and Apotex’s generic Plavix (clopidogrel bisulfate) with $902 million, he added.

This year, generic prescription volume, which increased more than 11 percent from April 2006 to April 2007, is driving overall prescription volume growth, Sweet said.
Key drugs that have gone generic so far this year have been Norvasc (amlodipine besylate) and Ambien (zolpidem tartrate), which had $4.7 billion and $2.8 billion in sales last year, Sweet said. Final approval of generic Zyrtec (cetirizine HCl), which had sales of $1 billion last year, is expected later in 2007, he added.

The market entry this year of generic Ambien and Norvasc will continue to drive generic prescription and sales growth in the future, Sweet said. He noted that generics will have greater influence on the drug market in 2007 than any other year as the market realizes the full impact of the $14 billion in branded drugs that were subject to generic competition in 2006.
 
In 2008, several more important drugs have the potential to go generic, including Fosamax (alendronate sodium), which had sales of $1.4 million in 2006. Pezalla predicted that when osteoporosis drugs such as Fosamax go generic, there is bound to be an upsurge in prescriptions because patients are probably foregoing treatment with the expensive brand drugs. “I think there are a lot of unfilled prescriptions,” he said.

The two experts also addressed how follow-on biologics might affect the generic market in the future. The Senate Health, Education, Labor and Pensions Committee recently passed the Biologics Price Competition and Innovation Act, S. 1695, which would allow the FDA to approve products as biosimilar to or interchangeable with brand biologics. The bill’s authors, including Sen. Edward Kennedy (D-Mass.), plan to attach the bill to the Prescription Drug User Fee Act reauthorization bill when the Senate and House meet to negotiate the final version later this month.

While generic companies are able to quickly manufacture and ship vast quantities of small-molecule generic drugs as soon as they are approved, it may not be so easy with biotech products. Nationwide availability of follow-on biologics might be “spotty,” Pezalla said, and unless products are approved as interchangeable, patients would not be able to switch back and forth between the brand and the low-cost follow-on.

Even at pharmacies where the follow-on products are available, patients are likely to be less trustworthy of biosimilar versions of life-sustaining cancer or diabetes treatments, so manufacturers and health plans may have to launch educational campaigns, Pezalla continued.

Snow, during his keynote address, called for support of follow-on biologics legislation, which he said would not only spur growth in the generic industry, but would promote new developments among innovator companies. — Breda Lund