Down to the wire: When Patented Blockbuster Drugs go generic!
Despite the fact that some popular patented drugs are about to expire this year, giving room for generic drugs multiplication of famous brands like Lipitor from Pfizer, Zyprexa from Eli Lily, Levaquin from Johnson and Johnson, many of these manufactures would like to hold an edge in the market for these products. A couple of these brands are already household names and command enough users to keep on raking in billions. Many of their manufacturers generally have this inkling or tacit dream of extending their patent over their inventions. There are other famous drugs that have sold billions of dollars in the open market and the thought of these drugs going for cheaper prices, or their manufacturers losing their tight grip on pricing, are just too discomforting for many pioneer drug manufacturers.
Take for example, in the next twelve months, these are the top best-seller drugs about to lose their patent protection rights; the conditions they treat; the pharmaceutical manufacturing company; and, their 2010 U.S Sales. According to IBIS World and www.thestreet.com, the following drugs will have their patent expiring in 2011: 1) Lipitor for treatment of cholesterol, manufactured by Pfizer, with 2010 US Sales of $5,329,000,000; 2) Zyprexa for treatment of anti-psychotic condition, manufactured by Eli Lily, with 2010 US Sales of $2,496,000,000; 3) Levaquin for treatment of antibodies or antibiotics, manufactured by Johnson and Johnson, with 2010 US Sales of $1,312,000,000; 4) Concerta for treatment of ADHD/ADD condition, manufactured by Johnson and Johnson, with 2010 US Sales of $929,000,000; and, 5) Protonix to deal with antacid, manufactured by Pfizer, with 2010 US Sales of $690,000,000.
In the next 24 months, 2012, the following patents would be expiring: 1) Plavix for treatment of anti-patelet, manufactured by Bristol-Myers Squib/Sanofi-Aventis, with 2010 US Sales of $6,154,000,000; 2) Seroquel for treatment of anti-psychotic condition, manufactured by AstraZeneca, with 2010 US Sales of $3,747,000,000; 3) Singulair for treatment of asthma, manufactured by Merck, with 2010 US Sales of $3,224,000,000; 4) Actos for treatment of type 2 diabetes, manufactured by Takeda, with 2010 US Sales of $3,351,000,000; and 5) Enbrel for treatment of arthritis, manufactured by Amgen, with 2010 US Sales of $3,304,000,000.
Some drug manufacturers have argued that there ought to be a lapse time between when the patent on invented drugs losing their patented rights and when other interested companies can produce the generic versions of the drugs. Furthermore, a few drug manufacturers want to be able to pick companies that will have the first crack at making generic versions of some popular drugs, through some converted licensing agreement(s). As a patient and consumer of some of these drugs, my neighbor and a few of the elderly at nursing homes around the nation, argue that such prerogative licensing deals are just ways or means through which inventor- licensing pharmaceutical manufacturers want to continue to bilk the unfortunate life-time drug consumers. Thus, an idea of having generic manufacturer licensing the right to make versions of popular drugs is just out of date or essentially inimical to progress in generic development of some popular drugs. In addition, the licensing arrangement is perhaps a forerunner to other devious means through which patients, mostly the elderly on Medicare and other government subsidized health insurance programs, suffer in the hands of pharmaceutical drug manufacturers.
Despite the ire that a licensing agreement for a generic drug production of a popular drug, after the expiration of patent on some drugs, there are still some deep seated resentment by a few inventor manufacturer, who would like to hold on to coveted privileges for life on some few cash cows drugs. Further, there are emerging crusade in support of preferential licensing deals in such a way that manufacture of a generic to a popular drug cost more for some manufacturers and less for others, through just the licensing agreements. Just as inventor drug manufacturer long to retain the rights and privileges of expiring patents, there are other generic manufacturers who want to cut deals to ensure that their unit cost of production is better-off than other generic manufacturers entering into the market. It is hardly anything new for manufacturers to want to have an edge in making generic versions of popular drugs; however, is this necessarily in the interest of some patients who have a life-time consumer experience with these drug?.
Although many pharmaceutical drug manufacturers, with huge edge on number of drugs patented, condemn some release arrangements where generic drug manufacturers license the production rights to a popular drug with some caviars, there is an inclination that some of these industry leaders are tacit culprits in some of these arrangements. It is not uncommon for a subsidiary of a hugely successful drug with patients and on the market, to begin making generics to the same drug, immediately the patent to the drug expires. These lead edge pharmaceutical drug manufacturers see this alternative arrangement as another means of enjoying the old privilege, if only at a marginally smaller profit. The first choice of these industry leaders is often to acquire and retain patents in perpetuity, not in the range of fifteen years or more. Yes, initial capital for drug invention is huge and in some cases the National Institute of Health have helped financed or defrayed the costs of initial exploratory researches into inventing a drug, the early bird in the invention of some of these drugs, still want to make as much money from the invention as is allowed or as is legally permissible, if not even more.
Due in part to some legalistic arrangements or wordings of agreements by some in-house or retained attorneys by these huge pharmaceutical drug patent holders, the competition in the generics market, is probably not at a level playing field. In as much as many consumers will like to believe that generics are bargains to the usually over-priced and somewhat expensive patented drugs, there are reasons to believe that the patient-user can still do better with the pricing to generics when manufactured by an independent and separate company from the initial patent holder. An examination of defrayed costs of inventing new popular drugs, if only pharmaceutical drug manufacturers are willing to provide full information on the true cost of inventing a drug, or assuming that we can actually find out what contribution research grants from National Institute of Health, Philanthropic organizations or University research grants have on the invention, maybe we will be able to factor the true cost of developing a new drug. Frankly, the marketing of many of these drugs is where the overhead is, and where the pharmaceutical drug companies expend most of their resources. It is also the area where the pharmaceutical drug manufacturers seek to recoup their investments; and, not the actual invention and or manufacturing costs of many of the popular drugs.
At the end of 2010, the pharmaceutical industry saw an increase in their sales over the previous year of about three percent. Of the $860 billion worldwide sales, over a third of the market were accounted for by blockbuster drugs; many of these drugs however, are about to lose their patent protection come 2013. What does this mean? Well in the short run, many generic manufacturers are about to have a field day which in turn will lower the prices paid by consumers. Unfortunately, for some of the reasons earlier discussed, both consumers and generic manufactures may not completely or totally enjoy the opportunity of cashing in on the patents’ expiration. Of the IBIS World reported thirteen blockbuster drugs set to lose their patents in 2012, maybe eight of them would actually turn to a complete wind fall for generic manufacturers; and subsequently to the millions of consumers who are on the drugs or who will be getting on.
Competition in price is usually the ultimate source of bargain for long time users; however, if one of the subsidiaries of the major pharmaceutical maker gets on the game, the imminent patent cliff, often touted in the industry, may actually be a soft landing for the inventor of the drug who is losing the patent protection. Despite the fact that loss of patent protection(s) may lead to lower prices for previously patented drugs, manufacturers have found alternative means of ensuring that the chicken that lay the golden egg, continues to do likewise, even if only at a lower margin. The objective is to retain market share for the drug or its generics. What a crafty way to get a subsidiary to manufacturer generics, even if it is done in India or China! Pharmaceutical drug companies could have easily passed on the lower price to the consumer by directly selling the brand at lower price; however, the marketing geniuses in their companies are often out to protect that marketing and advertising cost; both of which are irrelevant to consumers as often, their physicians continue to identify the brand in their prescriptions. One of the retired pharmaceutical sales executives once indicated that occasionally, some of the physicians are paid to actually write the brand name in their prescription, despite the fact that there are generics to the brand.