| To: IRWIN JAMES FRANKEL who wrote (132) | 6/29/2006 1:02:41 AM | | From: dr.praveen | | | | Pfizer to Make
Generic Version
Of Its Zoloft
By SCOTT HENSLEY
June 29, 2006; Page B1
<Here you go Jim :-)>
In the latest salvo of big drug companies' aggressive campaign against generic competition, Pfizer Inc. executives disclosed plans to introduce a heavily discounted generic version of the antidepressant Zoloft after the brand-name drug loses domestic patent protection tomorrow.
Pfizer's plans for Zoloft, the best-selling antidepressant in the U.S. and the company's third-biggest product, with $2.57 billion in U.S. sales last year, follow Merck & Co.'s move to undercut generic-drug makers offering copycat versions of Merck's blockbuster cholesterol fighter Zocor when it lost patent protection last week.
Until recently, brand-name drug makers practically walked away from hit medicines once their patent exclusivity elapsed. But facing patent losses on drugs with $39 billion in sales over the next couple of years, as well as a scarcity of new drugs, more brand-name companies are tapping into the generics business to retain a sliver of sales and, some critics say, to weaken competition from traditional makers of generics over the long haul.
Typically, when the patent for a branded drug is ruled invalid or expires, its maker continues to offer it to those patients who can afford to disdain generics; but at the same time, the brand-name company licenses the newly nonpatented but identical formula to selected generic-drug manufacturers, with whom it splits the revenue.
The practice, producing drugs known as authorized generics, preserves sales for the original maker but also serves as a jab in the eye of any generic-drug maker that might have successfully challenged the brand-name drug maker's patent on the product. A successful challenger wins a six-month period of exclusive sales.
Merrill Lynch specialty-drug analyst Gregg Gilbert estimates that a single generic typically is priced 35% to 40% less than the brand-name medicine during the six-month exclusive period and, if left alone, can capture 90% or more of the market from the brand-name it copies. But when an authorized generic is part of the mix, prices drop by 50% or more during the exclusive period, he said, and the patent challenger often winds up with roughly half the market share it would have had on its own.
Some critics say the real reason for the brand-name industry's sudden interest in generics is to discourage patent challenges in the first place. Brand-name pharmaceutical makers counter that authorized generics lower drug prices more quickly. But federal regulators are looking at whether the short-term savings are overshadowed by less competition over time.
Pfizer, legendary for its combative stance against generic challengers, is reluctant to share even a penny of sales. Instead, the company is making and marketing the generic versions of its drugs almost entirely by itself, through a little-known division called Greenstone Ltd. "We see an opportunity with our big medicines coming off patent," said Pfizer Chairman and Chief Executive Henry McKinnell. "The generic companies hate it, of course. They don't want the competition."
Bruce Downey, chairman and chief executive of Barr Pharmaceuticals Inc., a big generic maker that opposes the practice of authorized generics, says Pfizer has turned Greenstone "into an offensive weapon to discourage companies from trying to challenge their patents" by cutting into the exclusive sales period that is the prize of a legal victory.
Johnson & Johnson is testing Pfizer's approach with a few products through a subsidiary called Patriot Pharmaceuticals. Schering-Plough Corp.'s Warrick generics subsidiary does the same for a broader line of company has-beens. "It's not a very profitable business, but it helps us soak up some manufacturing overhead," said Fred Hassan, Schering-Plough's chairman and chief executive.
But Pfizer is far ahead. Greenstone's sales tripled to $722 million in 2005, making it the No. 7 generics concern in the U.S., according to data from IMS Health.
Pfizer doesn't disclose Greenstone's sales, but its top products include generic versions of blood-pressure pill Accupril, epilepsy medicine Neurontin and antibiotic Zithromax, which went generic late last year. Greenstone sells only Pfizer drugs, not knockoffs of other companies' brands, and operates exclusively in the U.S.
When Pfizer's Mr. McKinnell was asked recently whether Greenstone aimed mainly to give generic-drug makers fits or to preserve some sales for Pfizer, he quipped, "Both are good things."
The Federal Trade Commission is preparing to analyze the effects of authorized generics on drug prices and competition in a study that could be completed next year.
"Clearly, there ought to be a short-term benefit to consumers; prices should go down, but we're not certain of it," said Jon Leibowitz, an FTC commissioner. The larger question, he said, is whether authorized generics dissuade generics companies from pursuing some drugs, particularly those that aren't huge sellers, and lessen competition in the long run.
The combined effect of authorized generics on market share and price for a patent challenger guts the value of the exclusive period, according to Israel Makov, CEO of Teva Pharmaceutical Industries Ltd. "They make the prize an empty prize," he says.
At the end of this week Teva could begin selling generic Zoloft, or sertraline. Teva gained the exclusive right to sell sertraline for six months under a settlement between Pfizer and patent challenger Ivax Corp., acquired by Teva in March. As soon as Teva starts selling sertraline, Pfizer's Greenstone is expected to jump in too.
Pfizer's Mr. McKinnell said there is still plenty of sales and profits to go around even when an authorized generic is part of the mix.
"I don't think we're going to do too much damage to the generics companies," he said. "We're not going to put them out of business."
Write to Scott Hensley at scott.hensley@wsj.com |
| | Momenta Pharmaceuticals Inc. | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| To: dr.praveen who wrote (134) | 6/29/2006 2:19:19 PM | | From: rkrw | | | | Look at the long term chart though, a thing of beauty. I first invested in teva early on, I think around a $100M or so market cap. The stock was heavily correlated with the political activity in Israel back then. A bombing would set them back 10% and a few weeks of peace it would recover. Great stock for me, but I stupidly sold out way too soon.
I don't think zoloft or zocor have much to do with mnta. If mnta gets approved as a single generic, there's plenty of incentive for sanofi to keep their price high. |
| | Momenta Pharmaceuticals Inc. | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (2) |
|
| To: rkrw who wrote (135) | 6/29/2006 3:51:22 PM | | From: IRWIN JAMES FRANKEL | | | | >>If mnta gets approved as a single generic, there's plenty of incentive for sanofi to keep their price high.
No question about that. If there are only two sellers they only cut their own sales and profits by engaging in price competition.
But once you add lots of sellers all after the same buyers, then the competition turns to price destruction.
Pharma made a serious strategic error by not immediately destroying their own prices where many competitors was a given. The profits earned during the exclusivity period fueled the growth of competition that could not have grown if pharma had been willing to sacrifice current products on the alter of the future. They get it now.
ij |
| | Momenta Pharmaceuticals Inc. | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| To: rkrw who wrote (135) | 6/29/2006 4:26:59 PM | | From: dr.praveen | | | | | I don't have anything personal against TEVA. I just did n't like the way they pumped Copaxone after T's withdrawl. Now they are getting a taste of their own medicine from Big pharma. I am not saying all is doom n gloom for TEVA though :-) I felt their valuation was high 6 months ago. |
| | Momenta Pharmaceuticals Inc. | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (2) |
|
| To: dr.praveen who wrote (137) | 6/29/2006 5:05:46 PM | | From: IRWIN JAMES FRANKEL | | | | >>I felt their [TEVA] valuation was high 6 months ago.
It is still high. Best I can tell Copaxone accounts for most if not all of their net income and it is off-patent.
Who knows - maybe MNTA can dupe it and send TEVA to 15 where it belongs. (Pumping my positions - two with one post.) :-)
My wife has done fairly well on Copaxone and it does not make you sick every time you get a shot. So it seems the best of the choices when T is not available.
ij |
| | Momenta Pharmaceuticals Inc. | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last ReadRead Replies (1) |
|
| To: dr.praveen who wrote (137) | 6/29/2006 9:35:38 PM | | From: rkrw | | | | Today...
Biosimilar interferon gets negative opinion
The EMEA's CHMP issued a negative opinion on an MAA for Alpheon, a biosimilar recombinant human interferon alfa-2a from BioPartners (Zug, Switzerland), to treat chronic HCV. CHMP said it had "major" quality concerns and said there were differences between Alpheon and the reference product, Roferon-A interferon alfa-2a from Roche (SWX:ROCZ). |
| | Momenta Pharmaceuticals Inc. | Stock Discussion ForumsShare | RecommendKeepReplyMark as Last Read |
|
| |
