In case you think Big Pharma is completely powerless against the patent cliff and the forces of generics, we have ths new study from Express Scripps with some counter data. It seems generics have made a whopping impact on drug prices in 2012 -- as prices for these drugs dropped by an amazing 21.9% since last September. Markedly different from the meager 2.9% decrease seen for the same drugs in 2011.
On the other hand, a "market basket" of widely used brand name drugs was able to command a 13.3% increase in price during that same time period -- in a time when inflation was only 2%. Clearly, with loss of revenue facing them from drugs that have gone "over the cliff", Big Pharma has been able to counter by some degree with substantial price increases on brand name drugs. Biologics in fact were able to up their prices by 22.6%. Still these types of branded "specialty meds" represent only about 21% of the total market with generics making up the rest. So Big Pharma has to work hard to squeeze profits out of the existing pie.
Generics are making their impact clearly. Anyone doubt that pay for delay may actually prevent this from being worse (from Big Pharma point of view)? And Express Scripts uses the generic price drop coupled with the big biologics increase to lobby for more emphasis on getting a biosimilar pathway in place so it can start profiting from big drops in the biologicals arena too when the first biosimilar drugs are approved. Not such a rosy profit picture for Big Pharma unless they have the ability to get new brand products on the market and extend the indications for the existing brand drugs -- before either generics or biosimilars start eating their lunch.
Posted by Bruce Lehr Nov 28th 2012.