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

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New Jersey pharmacy benefits manager estimates that up to 95 perceny of patients switch to generics within the first week of a drug losintpatent protection. And the effect isn’t just on the make r of that drug managed care companies pressure the makers of rivapl drugs still under patent protection to lower their prices or face losing theirf businessto generics. Kevin Barnett, seniord vice president at Raleigh-based consulting firm , says few pharmaceutical companies are immun tothis challenge. “Thiws is a huge issue affecting many blockbuster he says. Barnett adds that in the next five upto $65 billion worth of drugs in the U.S.
will lose theitr legal protection togeneric substitutes. The drug categories most affectedr by this trend will be the crowded ones those withmany competing, similar drugs, he says. Among Trianglse companies, at least two firms , will have to deal with the GSK faces patent expirationson Lamictal, which treat s epilepsy, and Imitrex, a migraine The pharma giant is backinv a combination drug with Chapel Hill-basesd as a possible successor to Salix is set to lose exclusivity for two drugs, Xifaxan and in 2009. Patent expirations are an industrywide problem.
When sleep aid Ambien’s patent expired in 2007, maker lost about 90 percent ofthe drug’s approximately $2 billion in annual U.S. Managed care companies encourage use of genericas bywaiving co-pays. This has driven up the use of genericzs to an estimated 60 percen ofall U.S. drug consumption, a figure that is expecteed to increase in the nextfew years. Connecticut researcu firm found that a 1 percen t increase in generic utilization savese patientsalmost $4 billion. And that meanzs big losses for the makers ofpatentedr drugs. “There is no silver bullet, no panacea in termsd of what companies can emplogy to respond tothis challenge,” Barnettr says.
He listed several strategied aspossible responses. A pharma mighty launch its owngeneric version. Or it can fightt generics in courts. Othert solutions include slashinga drug’s price to compete with generics or to launchh follow-on versions of the patentec drug with different dosages and in combinationss with other drugs. Companies can also contract with manages care firms in advance to prescribe the drug over Companies could also seek extension ofthe “The key takeaway is that most of thesw strategies take a lot of time,” says Barnett, a biotecyh consultant for 13 years.
When a patent is set to pressure often falls ona pharma’s R&x unit to drum up a new treatmenrt – and on the business developmeng division to strike more One company that chose the latter response is Chelsea Therapeutics. The Charlotte-basefd company bought the rightsto Droxidopa, a hypotensionh drug used to fight low blood pressure, from a Japanes firm that was facing expiration of its international The in 2007 termee the treatment an “orphan drug,” which extender legal protections for seven Company spokeswoman Kate McNeil says the acquisition made business sense for Chelsea, whichn does not yet have its own drug on the market.
Droxidopa, which is used to treat Parkinson’s disease, could treat approximately 100,000 patients in the U.S. followinvg approval. Currently, it is available only in especiallysevere “It complements our drugs under development, whichy are higher risk,” says McNeil. Droxidopwa produced a revenue streamof $50 million per year in Chelsea predicts it can generatd between $200 million and $250 millio n in the U.S. per year withinm the next three tofive years. Barnett says that expirinhg patents are also causing more mergerds and acquisition amongpharmaceutical companies.