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Pharmaceutical manufacturers have a rough road ahead this year, pockmarked by generic competition and managed care issues. In fact, Doug Long, IMS Health vice president of industry relations, named generic erosion and the potential impact three-tiered co-pay systems will have on the drug business as two of the largest road blocks facing pharmaceutical companies this year.

Indeed, three blockbuster drugs recently lost patent protection and gained subsequent generic competition: AstraZeneca's Priosec (omeprazole), Bristol-Myer Squibb's Glucophage (metformin hydrochloride tablets) and Schering-Plough's Claritin (loratadine)--which switched to over-the-counter status.

Overall, generic use reached an all-time high last year, according to an Express Scripts' year-end review. Market share for generics reached 452 percent in 2002, compared with a market share of 42.1 percent in 2001. This year, generic utilization might get a slight push from the loss of patent protection for Bayer's antibiotic Cipro (ciprofloxacin) and the antide-pressent Celexa (citalopram hydrobromide) from Forest Pharmaceuticals. Generic usage also should get a major shove from sales of the equivalent to Prilosec. Eon Labs received final approval for its omeprazole 10 mg and 20 mg delayed-release capsules at the top of the year, but has delayed the launch of its Prilosec-equivalent until patent litigation with AstraZeneca is resolved.

"Generic competition has ... reduced industry growth rates," wrote Ken Nover, A.G. Edwards pharmaceutical analyst in a November industry outlook sizing up the industry.

The switch of the antihistamine Claritin to OTC status last month combined with the loss of patent protection of the proton-pump inhibitor Prilosec--which is slated to switch to OTC status in the fall--may prove to be a pair of devastating blows to overall sales of prescription medicines. Both proton-pump inhibitiors and non-sedating anthistamines as classes of drugs have been driving pharmaceutical sales for several years, and now the leading drugs in each category are going away.

And as those leading blockbuster remedies fade into the pharmaceutical market sunset, so goes the entire class of drugs. With the Claritin switch to OTC status last month, many third party payors placed the prescription competition on its non-preferred formulary status, making it more difficult for patients to treat their allergies with Aventis' Allegra (fexofenadine hydrochloride), Schering-Plough's Clarinex (desloratadine) and Pfizer's Zyrtec (cetirizine hydrochloride). In many cases, managed care is requiring pre-approval be fore allowing those drugs to be prescribed. "Clearly, the launch of OTC Claritin will hurt all of the existing non-sedating prescription products," Nover told Drug Store News.

The only upturn in this category currently benefits Merck. The company's Singulair (montelukast sodium) asthma remedy was approved against seasonal allergies earlier this month. And unlike antihistamines, Singulair treats seasonal allergies by blocking leukotrienes instead of blocking histamine.

If what's happening in the non-sedating antihistamine market is any tell, marketers of proton-pump inhibitors may see a loss of market share, as well, should Prilosec switch as expected later this year. Accordingly, Tap's Prevacid (lansoprazole), AstraZeneca's Nexium (esomeprazole magnesium), Janssen Pharmaceuticals' Aciphex (rabeprazole sodium) and Wyeth's Protonix (pantoprazole sodium) may be moved off managed care's preferred branded formularies come fall.

In more apparent bad news for the pharmaceutical industry, last month the Journal of the American Medical Assocation reported the results from the Antihypertensive and Lipid-Lowering Treatment to Prevent Heart Attack Trial, one of the largest such trials that followed more than 42,000 participants over eight years. In treating for antihypertensive therapy, ALLHAT found less expensive diuretics were just as effective as newer, branded antihypertensives like calcium blockers or ace inhibitors, which collectively generated more than $8.6 billion in revenue for the 12 months ended September 2002, according to IMS Heath. After trial results were released, many experts recommended diuretics be prescribed as the first line of defense for patients on a heart health regimen.

Currently, Claude Lenfant, director of the National Heart, Lung and Blood Institute that co-sponsored ALLHAT along with Pfizer, is putting together a committee to incorporate the new findings and other recent research with new clinical guidelines for high blood pressure. Lenfant hopes to announce the new guidelines by May.

A.G. Edwards' Nover had suggested that the ALLHAT study would have less of an immediate impact on doctor's prescribing habits, however. "The market for ace inhibitors and calcium blockers will not change dramatically because of this," he said, "because of the strong efficacy of the [respective] products across many patient groups" doctors will not change their prescribing habits, he reasoned.

But not all hope is lost. Several products have received Food an Drug Administration approval in the last few months that should have a positive impact on sales of pharmaceuticals this year.

Pharmacia's Inspra (eplerenone tablets) got clearance in September for the treatment of hypertension. And Schering-Plough and Merck are co-marketing the cholesterol absorption inhibitor Zetia (ezetimibe), approved in October. Bristol-Myers Squibb launched the antipsychotic Abilify (aripiprazole) in November.

Of course, there are plenty of drugs that may become available over the course of 2003, as well. "The one that people are waiting for in 2003 is Crestor [rosuvastatin] from AstraZeneca," Long said. Crestor is billed as a more effective statin than those currently on the market.

A look ahead

Looking forward, Nover identified other promising drugs that soon may get a nod from the FDA. An approved lower-dose version of Wyeth's Premarin (conjugated estroens tablets) and Prempro conjugated estrogens/medroxyprogesterone acetate tablets) may counter last year's news highlighting the slight increased risk in breast cancer for patients on hormone-replacement therapy.

There are several NDAs likely to be filed early this year. For example, Bristol-Myers is expected to submit its HIV treatment atazanavir and the antibiotic Garenoxacin to the FDA for approval soon.

Lilly recently brought its duloxetine formulation for the treatment of stress urinary incontinence and the olanzapine/fluoxetine combination OFC for bipolar depression to the FDA for market approval. Merck is working on a new drug application for aprepitant to treat nausea and vomiting among chemotherapy patients. Wyeth is hoping to introduce a Premarin/trimgestone combo drug this year. And Pfizer is expected to file an NDA during the first quarter of 2003 for another combo therapy-Lipitor (atorvastatin)/Norvasc (amlodipine besylate).

Abbott Laboratories announced earlier this month the launching of what it hopes will be a billion-dollar blockbuster with the recently approved rheumatoid arthritis drug Humira (adalimumab). The drug should garner some $150 million worldwide in its first year on the market, Abbott executives told analysts and reporters in a conference call. The company foresees $1 billion in worldwide sales within two years--especially if up to five other indications for the medicine are approved, including an indication against Crohn's disease and psonasis.

And even though the drug is delivered through injection--the company has designed a user-friendly syringe to facilitate at-home use. This will serve as an attractive point of distinction over Johnson & Johnson's Remicade (infliximab) and Amgen's Enbrel (etanercept), analysts contend. The prefilled Humira syringes will need to be administered only twice monthly, as opposed to a regimen of eight monthly injections for Enbrel.

Top 10 Rx manufacturers

                                % change     Market
                      $ sales  vs. year ago  share

Pfizer                 $19.3        15%      10.1%
GlaxoSmithKline         17.3        16        9.0
Merck                   12.9        11        6.7
Johnson & Johnson       12.5        24        6.5
AstraZeneca             11.0        16        5.7
Bristol-Myers Squibb     9.4        -7        4.9
Novartis                 7.6        18        4.0
Wyeth                    7.4        14        3.9
Pharmacia                7.1        13        3.7

* Sales are in millions and reflect prescription products and insulin;
excludes co-marketing and joint venture agreements

Source: IMS Health for 12 months ended September 2002

Top 10 drugs by dollar sales

                                                    % change
Drug              Drug class             $ sales  vs. year ago

Lipitor (Pfizer)  cholesterol reducer     $6.0         22%
Zocor (Merck)     cholesterol reducer      4.3         29
Prilosec          proton pump inhibitor    3.9        -16
 (AstraZeneca)
Prevacid (TAP)    proton pump inhibitor    3.7          6
Procrit (J&J)     erythropoietin           3.0         33
Zyprexa (Lilly)   anti-psychotic           2.8         20
Epogen (Amgen)    erythropoietin           2.8         16
Celebrex          cox-2 inhibitor          2.7          6
 (Pharmacia)
Zoloft (Pfizer)   SSRI                     2.5         28
Paxil (GSK)       SSRI                     2.4         18

Source: IMS Health for 12 months ended September 2002

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