We talk a lot in this magazine about a massive expansion in the aging population and what that means for optometry. In health care in general, it means that more patients will need more visits for more problems. And yet, despite this inevitable boom, the pharmaceutical giants will not be reaping many of the benefits that come along with such growth. Why? The simple answer: They’ve run out of ideas. And soon, they may run out of money too.
Indeed, the pharmaceutical sector is entering an era of declining revenues and profits. Consider Pfizer, maker of Xalatan, for example. In 2009, Pfizer’s Lipitor topped the best-selling prescription drug charts, generating $5.7 billion in sales in the United States alone.1 That’s great because more sales means more money for R&D for products that are important to the eye care industry. But, Lipitor is now only moments away from going off patent, which means a massive dip in profits for Pfizer who, to make matters worse, will lose patent exclusivity for Xalatan next month. And, Pfizer’s not alone. Frost & Sullivan healthcare consultant Shabeer Hussain said in a press statement that approximately $99 billion worth of branded drugs will lose exclusivity in the next five years.2
We have also seen—or will soon see—other big-name drugs disappear from prime-time commercial spots, thanks to patent expiration. Goodbye Vioxx, Nexium, Zoloft and Plavix, to name but a few. These “blockbuster drugs,” as they are called, are meds designed to treat patients who suffer from the most common diseases. So, what does a dry pipeline mean for tomorrow’s patients? Some say, “Probably not much.” After all, as one Businessweek report put it: “50% of blockbusters are just heavily marketed me-too drugs, offering little benefit over others in their class.”3 Whether you believe that to be true or not, the eye care industry will, no doubt, fall victim to the aftershocks of what promises to be a massive pharmaceutical shakeup.
Representatives from the investment management firm AXA Framlington have said that the leading pharmaceutical companies will lose between 14% and 41% of their existing revenues because of patent expiration.1 In fact, Wall Street has coined the term “patent cliff” to describe what it believes will be a devastating phenomenon.
“The number of new medicines is at an all-time low and is as low as it has been since the Second World War,” says Professor Clive Page, chairman of Verona Pharma.1 And yet, global census figures suggest that future consumer demand could be stronger than ever. The United Nations projects that the world’s population will grow to 7.6 billion by 2020. Of that, around 719.4 million, or 9.4%, will be 65 or older—up from 477.4 million two years ago.1
But, it looks like the aging population won’t be the main focus of new drug discovery efforts. Rather, patients suffering from rare diseases will reap most of the benefits from the direction in which pharma is heading. And, what exactly is that direction? According to market analysts, orphan drugs may help pharmaceutical companies reduce the impact of revenue loss caused by patent expiration.4
“The current economic situation plus the huge generic competition shifted the focus of pharmaceutical companies and they are moving to a new business model—‘niche busters,’ also called orphan drugs,” says Mr. Hussain. More on this next month.
Until then, we hope you enjoy this month’s issue. The focus is pharmaceuticals. On page 82 you’ll find an excellent submission by Ernie Bowling, O.D., titled “Generics: Friend or Foe.”
You be the judge.
1. Big pharma kisses its blockbuster years goodbye. The Independent. Available at: www.independent.co.uk/news/business/analysis-and-features/big-pharma-kisses-its-blockbuster-years-goodbye-2064636.html (Accessed: January 2011).
2. Frost & Sullivan: Orphan Drugs to Create Paradigm Shift in the Pharmaceutical Industry! Available at: www.prnewswire.com/news-releases/frost--sullivan-orphan-drugs-to-create-paradigm-shift-in-the-pharmaceutical-industry-89979267.html (Accessed: January 2011).
3. The Waning Of The Blockbuster Drug. Bloomberg Businessweek. Available at: www.businessweek.com/magazine/content/04_42/b3904034_mz011.htm (Accessed: January 2011).
4. Orphan drugs to plug pipeline gaps. Pharmaceutical Technology Europe. Available at: http://pharmtech.findpharma.com/pharmtech/article/articleDetail.jsp?id=665095 (Accessed: January 2011).