2005 Rx Market: The highs and lows

Moderate is the one-word summary for 2005. There were no blockbuster product launches, no blockbuster losses, and no blockbuster events to roil the pharmaceutical market. The biggest news of the year was a 3% increase in total prescriptions to 3.2 billion. That's hardly blockbuster growth, but it is an improvement over the 1% increase in total Rxs recorded for 2004.

A moderate 2% to 4% change from 2004 was common across the industry for 2005. Total pharmaceutical sales for the year topped $179 billion, up 3.8% from 2004, a moderate slowdown from the 5.7% growth recorded for 2004.

Growth in prescription pricing has also moderated. The average Rx acquisition cost was up 6% in 2005, to $73.40, compared with a 6.2% jump in 2004. At retail, the average Rx price grew a mere 2%, to $56.16, a moderate slide from the 4.6% average price increase in 2004.

Product launches by brand-name firms are falling, and patent expirations are climbing, which moderate growth on the innovator side of the industry. But every patent expiration is a potential generic launch, which boosts Rx volume and sales on the multisource side of the industry.

The biggest brand-name product launches of 2005 were Boniva (ibandronate, Roche/GlaxoSmithKline), Byetta (exenatide, Amylin/Lilly), Lyrica (pregabalin, Pfizer), and Vesicare (solifenacin, Astellas/GlaxoSmith- Kline). Solid sellers all, Hauben noted, but not a single blockbuster in the group.

No surprise, then, that total brand-name prescriptions dispensed fell by 6.1% in 2005, while generic scripts grew by 11.5%. In dollar terms, price increases added 1.6% to branded product sales for the year despite the decline in total scripts written. On the generic side, new product launches added 13.6% to generic dollar sales. The first generic to market typically enjoys 180 days of exclusivity-and higher prices-before other generic competitors drive prices even lower.

New scripts on rise

One of the few real surprises of 2005 was the relatively hefty growth in new prescriptions, up 4.1% compared with 1.9% growth in refills and 3% growth in total scripts. The growth in new scripts for 2005 follows a 1.1% drop in 2004. The key, Hauben said, was not in new Rxs for existing patients but entirely new patients entering the prescription drug market. New patients grew by 4.4% in 2005 after a 4% decline in 2004. "We are not looking at new pieces of paper," he said. "The increase in new Rxs is being driven by new patients coming into the marketplace."