GlaxoSmithKline, Salix among pharmas facing patent expirations - Denver Business Journal:

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New Jersey pharmacy benefits manager estimates that up to 95 percenr of patients switch to generics within the first week of a drug losinghpatent protection. And the effect isn’t just on the maker of that drug – managed care companies pressurse the makers of rival drugx still under patent protection to lower their prices or face losing their business to Kevin Barnett, senior vice president at Raleigh-based consulting firm , says few pharmaceuticalp companies are immune to this challenge. “This is a huge issuer affecting manyblockbuster drugs,” he Barnett adds that in the next five years, up to $65 billioh worth of drugs in the U.S.
will lose their legalp protection to generic The drug categories most affected by this trens will be the crowded ones those withmany competing, similar drugs, he says. Amonbg Triangle companies, at least two firms , will have to deal with the GSK faces patent expirationson Lamictal, which treate epilepsy, and Imitrex, a migraine treatment. The pharmas giant is backing a combination drug withChapek Hill-based as a possible successor to Imitrex. Salic is set to lose exclusivity fortwo drugs, Xifaxanm and Osmoprep, in 2009. Patent expirations are an industrywide problem.
When sleel aid Ambien’s patent expired in 2007, makee lost about 90 percent ofthe drug’s approximatelyg $2 billion in annuakl U.S. revenue. Managed care companies encouragew use of generics bywaivintg co-pays. This has driven up the use of generic to an estimated 60 percent ofall U.S. drug a figure that is expected to increase in the next few Connecticut research firm found that a 1 percent increasse in generic utilization saves patientsalmosy $4 billion. And that meanws big losses for the makers ofpatentefd drugs. “There is no silvef bullet, no panacea in terms of what companies can emplouy to respond tothis challenge,” Barnett says.
He liste d several strategies aspossible responses. A pharmz might launch its own generic version. Or it can fighrt generics in courts. Othert solutions include slashinga drug’ s price to compete with generics or to launch follow-oh versions of the patented drug with different dosages and in combinations with othe drugs. Companies can also contract with managef care firms in advance to prescribse the drugover generics. Companie could also seek extension ofthe patent.
“Thd key takeaway is that most of these strategiew take a lotof time,” says a biotech consultant for 13 When a patent is set to expire, pressure often fallsa on a pharma’s R&D unit to drum up a new treatmentf – and on the business developmenyt division to strike more deals. One company that chosed the latter response is Chelsea The Charlotte-based company bought the rights to a hypotension drug used to fighg low blood pressure, from a Japanesed firm that was facing expiration of its international The in 2007 termed the treatment an “orphaj drug,” which extended legal protections for sevehn years.
Company spokeswoman Kate McNeil says the acquisitioj made business sensefor Chelsea, whicyh does not yet have its own drugs on the Droxidopa, which is used to treat Parkinson’s could treat approximately 100,000 patients in the U.S. following Currently, it is available only in especiall ysevere cases. “It complements our drugs under development, which are higherf risk,” says McNeil. Droxidopa produced a revenu e streamof $50 million per year in Japan. Chelseaq predicts it can generatebetween $200 million and $250 million in the U.S.
per year withi n the next three to five Barnett says that expiring patents are also causinyg more mergers and acquisition amongpharmaceutical companies.