Despite Generic Rivals, Branded Drugs Sell Well


 
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Journal of Medicine - Though the loss of patent protection on a brand-name prescription drug tends to lead to a sharp drop in sales for that product in the United States, such older medicines have become a booming business for the pharmaceutical industry in emerging markets.

Take Abbott Laboratories, which reported that one of its fastest growing business lines last year was that of established pharmaceuticals, or “branded generics” as they are known in the industry. Sales of such products, which include branded generics outside the United States, were up nearly 20 percent to $5.4 billion last year, the company said in a news release.

Abbott and other drug makers see older brands as important in countries like India and China, where the economies are growing stronger but access to safe prescription medicines, particularly generics, remains an issue.

In addition, the patent expirations of big-name drugs like Pfizer’s cholesterol pill, Lipitor, has manufacturers trying to continue to win brand equity in emerging markets, where regulations on generic substitution of brands may not be as strong. (In the United States, the introduction of a generic copy is almost automatic once a brand’s patent expires, and multiple generics often flood the market, analysts say.)

“As companies like Pfizer, Sanofi and others run into a lot of patent exposure issues, they’re going to be looking more aggressively at pushing into branded generic markets,” Jason Gerberry, generics and specialty pharmaceutical analyst at Leerink Swann in Boston, said in an interview.

Doctors are looking for something that is older and reliable, the companies and analysts say. In India, for example, branded generics make up “70 to 80 percent of the retail market,” according to an October 2010 report by McKinsey & Company on India’s emerging pharmaceutical market.

“There is comfort in brand equity that companies can bring,” Mr. Gerberry said.

Abbott’s branded drugs include the antibiotic Clarithromycin, Duphaston for progesterone deficiency, Serc for vertigo and the prescription painkiller Brufen, which is a version of ibuprofen. Abbott’s 2010 acquisition of Solvay Pharmaceuticals added more than 100 branded generics that generate about $2 billion in annual sales, the company said.

Abbott’s chairman and chief executive officer, Miles D. White, last year separated branded generics into their own business unit, the “established products division,” or E.P.D.

“We’ve spent the better part of the last decade building E.P.D. into the global organization it is today,” Mr. White told analysts Wednesday. “Most recently, we completed the integration of Piramal Healthcare Solutions in 2011, which together with our existing business, made Abbott the largest pharmaceutical company in India, one of several rapidly growing emerging markets. The success of E.P.D. is built on literally hundreds of different products sold around the globe.”




Copyright 2012- National College of Physicians (NCNP.ORG)-All Rights Reserved

 



 
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