new study confirms the trend toward innovator pharmaceutical
companies switching their brand names to generics as
they come off patent.
The report, "Combating Generics: Pharmaceutical
Brand Defense" released last week by Cutting Edge
Information (Durham, NC, www.cuttingedgeinfo.com), notes
that most innovator companies hold off making the move
until a generic company announces its intentions to
enter the market. The innovator then switches into high
gear to reach the market first, taking advantage of
its existing resources to fix the generic drug's price
and claim a portion of generic revenues. According to
the report, generic drug prescriptions constitute 50%
of all US drug prescriptions.
Cutting Edge reports that "in the next five years,
participating companies will expose an average $541.7
million in aggregate revenue to generics competitors."
"If a pharmaceutical company's generic subsidiary
can be first-to-market, the company essentially retains
devalued market share for its off-patent drug,"
states Ion Hess, senior analyst for Cutting Edge Information
in the company's statement. "With patents for drugs
such as Prevacid and Zoloft set to expire in July and
December 2005, respectively, generic drug makers stand
poised to enter the market with competitive generic
products. It will be interesting to see which generic
defense strategies these brands utilize."