Patent Expirations Produce Top-selling Generic Drugs

A number of significant patentexpirations and challengesare shaping the generics market.Last year, more than a dozen top-sellingdrugs became available asgenerics for the first time, and severalof them rapidly climbed the list of theyear's top-selling generics. This trend issure to drive the current 57% genericutilization rate in chains higher.

The introduction of azithromycin,fexofenadine, and transdermal fentanylhelped generate strong sales of genericsoverall, according to IMS Health.Several big-selling generics launchedthe previous year also continued togrow strongly, including gabapentin,oxycodone HCl ER, and bupropion HClER, reported IMS. In general, accordingto Doug Long, vice president of industryrelations at IMS, the best-sellingbranded drugs continue to turn intothe best-selling generics.

These rapid shifts from branded togeneric versions of specific drugs aredue largely to the efforts of insurers,which are increasing their focus onquickly persuading members to moveaway from branded drugs as patentsexpire.

"Patent expiration is the real opportunity," said Eric Elliott, head of themedical-related products business unitat Aetna. Typically, he continued, 90%to 95% of the potential shift to a genericamong subscribers has beenachieved within the first 90 to 120days. Overall, generic utilization hasrisen to about 55% among members,Elliott reported.

Insurers often are employing a combinationof initiatives to increasegenerics use, with multiple programsaimed at pharmacists,members, physicians,and others. Some ofthese programs aim atpromoting specificgenerics. Aetna recentlylaunched a 6-monthcopay waiver pilot programin New Jersey formembers who switchto generic omeprazolefrom branded protonpump inhibitors.

In some cases, theinsurer looks to movegeneric utilization for aspecific drug by at least5%, Elliott said. Wherethe company wants toincrease the use of a particulargeneric, pharmacistreimbursement forthe generic may be set25% higher than for thebrand drug, he added.

Insurers also areusing broader incentivesto increase use,such as increasing brand copaymentswhile keeping generic copaymentssteady, Elliott pointed out.

The use of generics increasedmarkedly in several categories lastyear, among them diabetes care.Prescriptions for generic diabetesmedications—including metforminand multiple-drug therapies—grewdue to several factors, such aspatients switching from brand drugs,falling prices, and the increasing incidenceof the disease.

Increasing competition also hasdriven down prices in other categories,such as angiotensin-convertingenzyme inhibitors. As a result,although total prescriptions forlisinopril swelled by more than 11%,retail sales in dollars actually shrankslightly, according to retail prescriptiondata from Verispan.

One major focus for insurers, and forthe generics industry in general, hasbeen the Zocor (simvastatin) patent expirationthis year. Teva PharmaceuticalIndustries and Ranbaxy Laboratories won180-day exclusivity for their generic versions.Protection for the statin Pravacholhad already expired, and the FDA hadapproved the first generic pravastatin,also from Teva, earlier this year. Merck,however, decided to lower the price of itsoff-patent Zocor and signed an agreementwith Dr. Reddy's Laboratories to sell"authorized" generic simvastatin, withthe drug maker sharing the profits.

As long as blockbuster expirationscontinue, analysts expect the lineup oftop-selling generics to keep changing.

Mr. Faden is a freelance medicalwriter based in Portland, Ore.