Generics vs. branded drugs

Oct/05/2007 06:34 Filed in: Pharma Business
presrciption
It seems that big pharma will do anything to hold onto the sales of successful products. Usually they develop a new product to replace the old one but are these new producs that much more effective? Is Cymbalta really better than much better than fluoxetine? Is Nexium a lot more effective than OTC Prilosec? GM's union notes that they spent $110 million on prescriptions for Nexium last year. Using the generic brand could have saved over $70 million in a $1.3 billion health plan. Pharma had better take notice because drug costs are going to come under more and more scrutiny.



Now it should be noted that Percy Barnevik, the retired chairman of Astra Zenca, is a member of GM's Board. The AFL-CIO did send a letter to the SEC saying that it was concerned that GM agressively intervened to protect Nexium while Mr Barnevik was sitting on the board but they also acknowledged that they were not privy to decision making. Come on...when you see snow on the ground you have to assume it snowed last night. But this incident is sure to shine the light on a more serious problem..generics and OTC products vs branded expensive pharma products.


Sales of Lilly's Cymbalta are increasing and are now at $1.3 billion. However could patient who take Cymbalta could just as well on generic Prozac? When I recently received a subscription for Celebrex my insurance company sent me a letter citing some studies that showed generic ibuprofen was just as effective for muscle pain as Celebrex. Just imagine how much money could be shaved off our heath care costs if:


-People were switched from Cymbalta to generic fluoxetine


-People on Lipitor or Vytorin were switched to genric statins


-People on Nexium were switched to OTC Prilosec


The answer is a LOT !


On GM's board there are ties to Astra Zenca, Eli Lilly and Pfizer. Just a small conflict of interest there ha?


The other point that pops out is why are drug makets so determined to hold on to blockbusters with replacements? The answer is simple; because they spent a lot of money developing the market and to introduce a new product does not take much effort. Drug companies need to do a lot more to develop drugs that have clear advantages over generic drugs. They especially need to do head to head clinical studies against the older drug to show the difference in patient outcomes. Pharma also needs to acknowledge that benefit managers are going to come under increased scrutiny to cut costs. Chrysler, for example, will only prescribe Nexium when OTC or generics don't work.


I read about this story in today's NY TImes and I am sure it is going to get picked up by more media outlets as healthcare costs in this country continue to be in the news. Transparency is the model for most companies today but it's easy to see why pharma can't be transparent...they have too much too hide and protect.
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