2006 Rx market flashback: Generics take the lead, brands fall off, blockbusters were absent last year

April 2, 2007

Generics were the big winners in the prescription drug world of 2006. While generic prescription volume was surging 11.4% last year compared with 2005, brand-name Rx volume was falling by 5.1%. Generics now account for 56.9% of all scripts and 63.8% of new scripts.

Credit for the lopsided win for generics goes to the relative balance in New Drug Approvals (18) and patent expirations (19) in 2006.

There were no blockbuster product launches last year. Blockbusters Zocor (simvastatin, Merck) and Zoloft (sertraline, Pfizer) lost their patent protection, which helped fuel the rush to generics. So did the generic version of Plavix (clopidogrel, Bristol-Myers Squibb/ Sanofi-Aventis), which was on the market for a few days in August until legal squabbles intervened. Observers said Apotex sold enough clopidogrel into the supply chain to last at least through the end of 2006.

Total prescription volume grew 3.6%, to 3.3 billion scripts in 2006. That modest increase from the 2.5% growth in total Rx volume recorded for 2005 was due entirely to generics.

Prescription sales fared better. Total retail Rx dollars hit $192 billion last year, up 7.1%. That represents a healthy increase over the 3.8% increase in total retail dollars recorded in 2005. Dollar growth was spread evenly across new and refill Rxs in both years.

The numbers are even better in the generic sector. Prescription volume was up 11.4%, but the dollar value of those generic fills jumped 16.4% on the relatively high prices that the first generic to market can command. With 19 first-to-market introductions last year, there was plenty of opportunity to keep generic prices up during the 180-day exclusivity period granted the first successful generic challenger.

"The industry continues to do its best to turn a profit," said Timothy McGee, associate product manager for Vector One National (VONA) Rx/Dx Solutions at Verispan. The Newton, Pa., market research firm provided all of the data for this report unless otherwise noted. "The days of double-digit growth overall are pretty well behind us," he said. "The growing discrepancy between overall prescription increases and generic prescription increases is becoming more of a factor."

Goodbye to blockbusters

The other NMEs may become solid sellers, but all are indicated for relatively restricted conditions that affect less than blockbuster populations. Sutent (sunitinib, Pfizer), for example, attracted intense interest among kidney cancer clinicians and went largely unnoticed elsewhere.

On the other side of the equation, several iconic brands lost patent protection last year. Big names to go generic during 2006 included Effexor (venlafaxine, Wyeth), Mobic (meloxicam, Boehringer-Ingelheim), Pravachol (pravastatin, Bristol-Myers Squibb), Proscar (finasteride, Merck), and Zofran (ondansetron, GlaxoSmithKline) in addition to Zocor and Zoloft.