Patent Expiry Impact Predictor

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1 Patent Expiry Impact Predictor Compiled and written by Datamonitor plc Datamonitor plc (DTML) is a premium business information company specialising in industry analysis and providing clients with unbiased expert analysis and in-depth forecasts for six industry sectors: Automotive Consumer markets Energy Financial services Healthcare Technology No part of this section may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the author, Datamonitor plc. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Datamonitor delivers are based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such, Datamonitor can accept no liability, whatever, for actions taken based on any information that may subsequently prove to be incorrect. Please contact: Matthew Dick Datamonitor plc Charles House Finchley Road London NW3 5JJ UK Datamonitor maintains its headquarters in London and has regional offices in New York, Frankfurt and Hong Kong.

2 Patent expiries in HIV Generics to take centre stage? The number of people living with HIV/ AIDS has increased dramatically since the disease was first discovered in the early 1980s. In the seven major markets, Datamonitor estimates that, in the past ten years, there has been a 95 per cent increase in the prevalence of HIV/AIDS, with between 1.1 and 2.2 million people currently living with the disease. There are currently 26 branded drugs available in the HIV antiretroviral market, with the patents on many of these set to expire within the next five to ten years, as highlighted in Figure 1. Although the first antiretroviral patent is not due to expire until 2005, there are currently several generics available in the seven major markets. In the USA, for example, Barr Pharmaceuticals obtained Food and Drug Administration (FDA) approval for its generic version of Bristol Myers Squibb s (BMS s) Videx EC (didanosine) in December The FDA granted expedited review of Barr s abbreviated new drug application (ANDA) under the President s Emergency Plan for AIDS Relief (PEPFAR) and, being the first company to file for an ANDA on Videx EC, Barr was granted 180 days exclusivity. President Bush initiated PEPFAR in January 2003, when he pledged US$15bn Figure 1: Expected antiretroviral patent expiries, Note: date shown is first expected patent expiry. Not shown Fortovase, will be withdrawn in 2006; Crixivan, expected 2011; Agenerase, expected 2012; Rescriptor, expected 2013; Fuzeon, expected 2013 Source: Datamonitor; Dolphin, 2004, Copyright: Thomson Scientific HENRY STEWART PUBLICATIONS JOURNAL OF GENERIC MEDICINES. VOL. 3. NO OCTOBER

3 Figure 2: Videx/Videx EC sales following generic didanosine approval Source: Bristol Myers Squibb press release, April 2005 for tackling HIV/AIDS around the world, primarily in the hardest hit countries of Africa. The initiative aims to: + prevent 7 million new infections, approximately 60 per cent of the projected new infections in the target countries, via large-scale prevention efforts including voluntary testing and counselling; + treat 2 million HIV-infected people, through the large-scale provision of antiretroviral therapy to the poorest, most afflicted countries; + care for 10 million HIV-infected individuals and AIDS orphans. Although a number of generic antiretrovirals are being manufactured, until recently none had been approved by the FDA, thereby precluding their inclusion in the PEPFAR. Recently, however, Barr s didanosine, Ranbaxy s lamivudine and nevirapine and Aurobindo Pharma s nevirapine generics have all been approved or tentatively approved by the FDA, making them available for consideration for purchase under the PEPFAR. In theory, this should not affect sales in the seven major markets, since all generic versions of antiretrovirals approved by the FDA are for use in the countries covered by the PEPFAR only (FDA website). Sales of Barr s generic didanosine have, however, been registered in the USA, with US$1.6m recorded in the last quarter of 2004 (MIDAS Sales Data, IMS Health, April 2005). Moreover, sales of branded Videx/Videx EC have fallen significantly over the last year, as Figure 2 demonstrates, particularly in the USA, suggesting some diversion of generics to American patients. GENERIC IMPACT IS LIKELY TO VARY CONSIDERABLY In light of the lifelong need for HIV therapy and the high percentage of infected patients being treated, generics manufacturers have demonstrated significant interest in the antiretroviral market. In addition, the considerable cost associated with highly active antiretroviral therapies (HAART) means there is little reluctance on the part of the physician to switch to generic versions, as highlighted by the following opinion leaders comments: I think they [generic antiretrovirals] will be extensively used, and this is a matter of money. (Spanish opinion leader) 86 HENRY STEWART PUBLICATIONS JOURNAL OF GENERIC MEDICINES. VOL. 3. NO OCTOBER 2005

4 It s a fairly significant market, I mean I would think that they would be interested in that. (US opinion leader) Yes, sure; I think there will be [a high level of generic interest] because the market is going to increase because the patients taking drugs for their whole life. Many generic manufacturers will be interested in putting generics on the market. (French opinion leader) Datamonitor believes the degree to which individual drugs will be affected by genericisation will vary depending on several factors, however, namely the volume use of the branded product, the number of generics already available when the branded product patent expires, the availability of new drugs, both in the same class and other classes, and the pricing differential implemented by the manufacturer of the branded product. OLDER PRODUCTS ARE NOT EXPECTED TO RAISE GENERIC INTEREST The first wave of patent expiries will affect products such as Retrovir, Videx and Zerit, all of which have experienced falling sales over the past five years. As new antiretrovirals have been launched, these products have been less frequently used in therapy, being replaced by more efficacious, convenient and tolerable drugs. As such, Datamonitor does not believe that generic versions of these drugs are likely to be widely used in therapy, despite the cost savings which may be achievable. I think the things coming off patent just now aren t very interesting in a sense because I think they re not drugs that are going to be widely used anyway. (UK opinion leader) THOSE HARDEST HIT WILL BE THE MOST WIDELY PRESCRIBED PRODUCTS EPIVIR, VIREAD, SUSTIVA AND KALETRA Datamonitor s physician research found that the most frequently prescribed antiretrovirals are likely to be severely impacted by generic incursion: Well, of course we will have new drugs in the different classes and new classes with the CCR5 inhibitors, but at the same time the drugs we have today the drugs which are going to be available in generic versions will still be used... as part of even the most modern regimens. (French opinion leader) I think they will be extensively used, and this is a matter of money. I mean if these generic versions are pre-qualified by the WHO, like the drugs we use right now in some under-developed countries, then we have to use them also here because we trust these prequalifications. We have to use them well, our managers at the hospital would say they can spend less money, so it is normal to use them. (Spanish opinion leader) And we could imagine having a regimen with a CCR5 inhibitor and a generic of Retrovir or Combivir. (French opinion leader) Given the relatively strong HIV pipeline, with 27 drugs in clinical development, it is possible that, by the time the majority (8 out of 17) of antiretroviral patents expire (between 2011 and 2013), today s leading products would have been replaced in therapeutic regimes by newer drugs. It is unlikely that any truly novel pipeline antiretrovirals will reach the market before , HENRY STEWART PUBLICATIONS JOURNAL OF GENERIC MEDICINES. VOL. 3. NO OCTOBER

5 Figure 3: Viread, Sustiva, Epivir and Kaletra forecast sales, in seven major markets, Source: Datamonitor however. As such, the majority of today s leading drugs, such as Sustiva, Kaletra and Combivir, will still be widely used in therapy for the next five to eight years, providing ample opportunity for generics manufacturers. Moreover, it is possible that the availability of generics may reduce the potential commercial success of some of the pipeline drugs as explained by the following opinion leader: I think generics will have quite a major impact by 2015 because I think treatments are already very satisfactory. To imagine that the new generation CCR5, Integrase etc. inhibitors are going to all have a magnitude of improved potency, that means that you are going to go on paying an enormous premium when you could unbelievably reduce the cost of prescription. (UK opinion leader) Therefore, following patent expiry, sales of the leading antiretrovirals are expected to experience significant generic incursion and, therefore, sales decline, as shown in Figure 3. Datamonitor plc 88 HENRY STEWART PUBLICATIONS JOURNAL OF GENERIC MEDICINES. VOL. 3. NO OCTOBER 2005