[Ip-health] AP: Generic drug prices falling in US

[Sarah Rimmington]

[snip] Between now and 2012, brand-name drugs with $139 billion in
annual sales in the world's top eight markets will face generic
competition, IMS noted. Those drugs include the world's top-selling
medicine, Pfizer Inc.'s cholesterol drug Lipitor, which has sales of
nearly $13 billion a year.

However, after that, the ongoing decline in the number of major new
brand-name drugs being approved will mean fewer new generics...

IMS expects what Aitken called "seismic change" in the global generics
industry over the next decade, as the pricing pressures lead to more
small generic manufacturers whose profit margins are being squeezed now
being acquired by the dominant players. Meanwhile, more of those big
companies are branching out into developing brand-name drugs, more
brand-name companies trying to compensate for slow growth are making
their own generics, and generic versions of biotech drugs =97 not yet
allowed in this country =97 are expected to become more common, expanding
the generic market. [snip]


http://www.google.com/hostednews/ap/article/ALeqM5jm1L--yEtru01hmgaN5gm9JQR=
25AD9501R501

AP
Generic drug prices falling in US
By LINDA A. JOHNSON

TRENTON, N.J. (AP) =97 Finally, a little good health care news for
consumers: U.S. prices for generic prescription drugs, which already
cost as little as one-third what their brand-name cousins do, have been
getting cheaper and likely will keep doing so.

The causes? The ultra-low prices for generic prescriptions offered by
giant retailers and drugstore chains and intense competition among the
many generic drugmakers fighting for sales, according to health
information firm IMS Health.

Those pricing pressures forced down dollar sales of generic drugs in the
U.S. by 2.7 percent in the year ending in September, even though the
number of generic prescriptions filled actually increased by 5.4 percent
over the year before, IMS reported Wednesday.

"We're seeing the combination of pressure from large retailers to make
generics available at ever-lower prices for their customers" and the
intensified competition among generic drugmakers leading them to cut
prices, said Murray Aitken, senior vice president of the Healthcare
Insight unit at IMS.

Aitken said the price competition is particularly intense for drugs that
had been brand-name blockbusters =97 recent examples include osteoporosis
drug Fosamax and cholesterol fighter Zocor =97 where "there can be as many
as 20 generic manufacturers competing for share."

Meanwhile, in 2006 discounter Kmart, followed by Wal-Mart Stores Inc.
and Target Corp., began offering a large number of popular generic drugs
for just $4 or $5 per month, passing on their savings from buying in
large volume as a strategy to draw more shoppers into their stores.

Some other major retailers with in-store pharmacies and even drugstore
chains have followed suit with similar programs, with some now offering
generic drugs for as little as $10 for a three-month supply.

"I think we'll continue to see very intense levels of competition" in
the U.S., Aitken said. "It's a very good story for the health care system."

And more popular generics will be coming soon.

Between now and 2012, brand-name drugs with $139 billion in annual sales
in the world's top eight markets will face generic competition, IMS
noted. Those drugs include the world's top-selling medicine, Pfizer
Inc.'s cholesterol drug Lipitor, which has sales of nearly $13 billion a
year.

However, after that, the ongoing decline in the number of major new
brand-name drugs being approved will mean fewer new generics.

Generics generated $78 billion in revenue in the top eight countries
with the highest sales in the year ending in September, an increase of
only 3.6 percent over the prior year, according to IMS. Revenue had been
climbing by double digits for several years and jumped 11.4 percent in 2007=
.

The report noted U.S. generic sales dipped from $34 billion in 2007 to
$33 billion in the year ending in September, when generic drugs
accounted for nearly 64 percent of all prescriptions filled.

Among other major markets, revenue from generic drugs also declined in
the U.K., driven by pricing pressure from its national health system,
but increased by double digits in France, Italy, Japan and Spain.

IMS expects what Aitken called "seismic change" in the global generics
industry over the next decade, as the pricing pressures lead to more
small generic manufacturers whose profit margins are being squeezed now
being acquired by the dominant players. Meanwhile, more of those big
companies are branching out into developing brand-name drugs, more
brand-name companies trying to compensate for slow growth are making
their own generics, and generic versions of biotech drugs =97 not yet
allowed in this country =97 are expected to become more common, expanding
the generic market.

--
Sarah Rimmington
Attorney
Essential Action, Access to Medicines Project
Washington, DC
Tel: (202) 387-8030
Cell: (202) 422-2687
www.essentialaction.org/access/