Next-generation drug development: risky and costly, but worth it

Generic drugs, which drive a $40 billion dollar generics industry expected to hit $60 billion by 2007, account for 53% of all prescriptions filled in the United States today.

According to a new report from pharmaceutical research firm Cutting Edge Information, brand name companies have turned to the risky business of next- generation drug development to protect revenues from generic competitors.

"Next-generation drug development is chancy because substantial investment must be made up-front and without a guarantee of return," said Eric Bolesh, lead author of "Combating Generics: Pharmaceutical Brand Defense for 2007". "However, next-generation development is one of the most effective means of protecting revenue streams from off-brand challengers."

Next-generation development has had its successes and failures. The industry's ideal is AstraZeneca's Prilosec-to-Nexium switch. Before generic competitors hit the heartburn market, AstraZeneca had successfully switched 40% of its Prilosec customers to Nexium. By Prilosec's 2nd year of generic exposure, AstraZeneca managed to grow its franchise by almost 9%.

GlaxoSmithKline's Augmentin did not fare as well. Franchise sales plummeted 72% in the US - despite the launch of Augmentin XR, an extended release form - when Augmentin first faced its generic competitors in 2002.

Cutting Edge Information's study, "Combating Generics: Pharmaceutical Brand Defense for 2007", examines numerous strategies to counter generic drugs. The report, which contains illustrative case studies, explores a number of strategies in detail and identifies critical principles for success.

"Setting realistic goals and having a well-thought-out plan is important. Generic competition in any given market is inevitable. Start your next- generation drug development early -- just after product launch -- and be ready to show patients that the benefits gained from the scientific advances of a next-generation drug outweigh the savings that come from switching to generics," said Bolesh.


The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of News Medical.
Post a new comment
You might also like...
New research reveals that childhood omicron infections have been under-reported in Canadian schools