Pharmaceutical Commerce - January/February 2012 - (Page 1)

JANUARY/FEBRUARY 2012 Business Finance Legal Regulatory Generics Manufacturers Grapple With Tight Economics But the global picture is sunny as most of the global market growth benefits the generic makers Suzanne Shelley Aggregate Spending Rules Arrive, But Industry Is Still Gearing Up The ‘Sunshine Act’ provisions of the Affordable Care Act require records to be kept beginning Jan. 1 By Nicholas Basta Last year, in the week after Thanksgiving, the long-anticipated end of patent exclusivity on Pfizer’s Lipitor (atorvastatin) ended—signaling an acceleration in the “patent cliff” that the branded pharma industry has been dealing with for the past couple years. With Lipitor, one of the most successful products in the history of the pharma industry (reaching annual revenues in the vicinity of $13.5 billion at its peak) losing exclusivity, Pfizer initiated a series of novel actions to retain market share for its brand, including a direct-sales pathway (patients would contact Diplomat Health, a Flint, MI specialty pharmacy) to fill prescriptions by mail; and dropping its price so that, in some instances, it is cheaper than the generic from Ranbaxy on the market. Meanwhile, Pfizer and other branded pharma companies are intensifying their pursuit of specialty pharmaceuticals— higher-priced drugs, generally biologic in origin, but with much more limited patient populations. From the perspective of the generics pharma industry, however, this is a go-go era of market growth. Generics have grown from $124 billion in 2005 The Generic Drug to $234 billion in 2010, and are expected to reach $400-450 billion by 2015, User Fee Act “will according to projections by IMS Health. Nearly 70% of this demand will help ensure that any come from outside developed markets—the “pharmerging” economies, as non-compliant players IMS has labeled them, including the BRIC (Brazil, Russia, India and China) within the drug supply countries and a dozen or so others. chain, wherever they “The next three years will be a ‘golden age’ of generics,” says Marc Kikuchi, VP of global generic sourcing for AmerisourceBergen (Valley may be based, are Forge, PA). “There are more than 30 known generic new product launches identified.” anticipated in 2012 alone.” Specifically, between now and 2015, countryspecific patents in one or more of the developed markets will expire for 11 —Heather Bresch, CEO, Mylan Labs of the top 20 leading medications (or 6 of the top 10). The drugs that are up for grabs by generic manufacturers have such household names as Plavix, Advair, Diskus, Nexium, Zyprexa, Singulair, Oxycontin, Abilify, Gleevec, Levaquin, Actos, Celebrex and Seroquel. Meanwhile, a next patent-cliff era is beginning to come into view: biotech products, some of which have already been on the market for decades. By 2019, 80% of current oncology and rheumatoid arthritis drugs will lose their patent exclusivity, notes Murielle Thinard-McLane, VP Generics, McKesson Specialty Health (San Francisco, CA). “Although this will undoubtedly create opportunities, most of that cliff comes from biologic drugs, and for those types of therapies, the FDA approval pathway is still quite uncertain.” continued on page 12 With the calendar turning over for the new year, the window is officially open for collecting data on where life sciences companies spend money on healthcare professionals, the “Physicians Payment Sunshine Act” that got incorporated into the Patient Protection and Affordable Care Act of 2010. Discussions with industry managers and vendors show that many of the biggest pharma companies are well along in implementing the reporting systems, but many smaller companies are not—and some are simply going to wait until March 2013, when the data from the full preceding year are to be delivered to the Centers for Medicare and Medicaid Services (CMS). Payments to physicians have long been under regulatory scrutiny, and many pharma companies operating under Corporate Integrity Agreements have been obliged to report aggregated spending prior to the Sunshine Act provisions. Many of those, however, specifically involved interactions between healthcare professionals (HCPs) and sales and marketing staffs. The new agg spending rules apply across the board to continued on page 25 Manufacturing & Packaging Brand Owner-CMO Collaboration Is Growing—But Is Far From Mature The long-recommended practice of shared data and plans between bipharma companies and their contract manufacturing organizations (CMOs) is beginning to take hold By F.J. Quinn The business of contract manufacturing in biopharma—heading toward $40 billion/year globally by mid-decade, by some estimates— continues to evolve even as the business volume grows. Manufacturers/ brand owners currently look to two models—the close network between major consumer-goods retailers ad their extended chain of suppliers, and suppliers to those suppliers; and the high-volume, high-growth pattern of consumer electronics, where billion-dollar products are changed annually if not faster with barely a hiccup. There are signs that biopharma is tracking these progressions closely—but still from a follower position. In the past, biopharma could comfortably operate with production quotas determined semiannually, and products sitting in warehouses for weeks if not months; now, the push is on to have lean, fast-changing supply chains, low inventories, and, above all, tightly knitted coordination between the brand owner and the network of CMOs. continued on page 22 MENDOTA, IL PERMIT 232 PRSRT STD US POSTAGE PAID http://www.pharmaceuticalcommerce.com

Table of Contents for the Digital Edition of Pharmaceutical Commerce - January/February 2012

Pharmaceutical Commerce - January/February 2012
Editorial
Contents
Op-Ed
Top News
Business/Finance
Brand Marketing & Communications
Supply Chain/Logistics
Information Technology
Manufacturing & Packaging
Legal & Regulatory
Meetings and Editorial Index

Pharmaceutical Commerce - January/February 2012

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