Lipitor and Zyprexa Patent Expirations To Sock 2012 US Drug Sales - WSJ.com

By Peter Loftus  Of DOW JONES NEWSWIRES

Cheaper generic versions of two of the 10 best-selling drugs in the world are due to hit U.S. pharmacy shelves this fall, kicking off a wave of patent expirations that will deal a huge blow to U.S. drug sales in 2012 and beyond.

Drug makers have already made some preparations for this patent cliff by cutting costs and doing deals to beef up drug-research pipelines. But experts say more cost cuts are likely as the patent expirations get closer, and there's not much more companies can do to offset the revenue hit.

All told, research firm EvaluatePharma Ltd. estimates medicines now generating $133 billion in annual U.S. sales could become exposed to generic competition by 2016. The shift is seen helping not only patients and generic drug makers, but also drug wholesalers and distributors.

The No. 1-selling drug in the world, Pfizer Inc.'s (PFE) cholesterol-lowering Lipitor, will go generic Nov. 30 under the terms of a patent-litigation settlement Pfizer reached with an Indian generics manufacturer in 2008. A month earlier, in October, Eli Lilly & Co.'s (LLY) antipsychotic Zyprexa will go off patent.

Together, Lipitor and Zyprexa generated $15.7 billion in global sales for 2010--with half of that from the U.S. alone. But those sales are expected to be decimated, as generic competitors come to market with copycat versions that ultimately may sell at a 90% discount, and health plans and pharmacies encourage their use.

Branded-drug manufacturers can take some steps to mitigate the pain, such as marketing their own generic products, but their options are largely limited.

"We're planning on a very significant and rapid erosion" of Zyprexa sales, Lilly Chief Executive John Lechleiter said. "I think this is prudent." Zyprexa's U.S. sales are seen dropping more than 80% to $339 million, according to EvaluatePharma, which aggregates estimates of financial analysts.

Pfizer's U.S. Lipitor sales are expected to plummet 90% to $492 million in 2012 from projected 2011 levels, a sales erosion that will happen "in no time," as EvaluatePharma editorial analyst Christian Glennie put it.

via online.wsj.com

Posted via email from Jack's posterous