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Schering-Plough launches generic hepatitis C drug By Bill Berkrot and Ransdell Pierson
  This still leaves Roche's ribavirin significantly less expensive (by 30-50%) than all ribavirins, generic or Rebetol.
NEW YORK, April 8 (Reuters) - Schering-Plough Corp said on Thursday it launched a generic version of its hepatitis C medicine ribavirin, just a day after two rival drugmakers won U.S. approval to market copycat versions.
ADVERTISEMENT The move sparked a 10 percent sell-off in shares of Pharmaceutical Resources Inc. (NYSE:PRX - News) , which had been given rights by privately held Three Rivers Pharmaceuticals LLC to market a generic version.
U.S. regulators on Wednesday agreed to allow Swiss drugmaker Novartis AG (NOVN.VX) (NYSE:NVS - News) and Three Rivers to launch their copycat versions of the drug immediately.
The arrival of generics will drive down the cost of treating hepatitis C, a virus believed to infect as many as 4 million Americans and the leading cause of liver transplants.
"We're pricing our generic ribavirin comparable to the generics already on the market," Schering-Plough spokesman Robert Consalvo told Reuters.
Analysts, however, said they believed Schering-Plough's generic will be sold to wholesalers at up to a 65 percent to 70 percent discount to its branded version of the drug, sold as Rebetol for about $12,000 for a 48-week regimen of four pills a day.
At that steep a discount, the Schering-Plough generic would deeply undercut prices of the other two generics, said analysts, noting that they were selling for a 35 percent to 40 percent discount to Rebetol.
Consalvo said Schering-Plough would continue to sell its branded drug, but acknowledged its sales were sure to fall as patients opt for the company's cheaper generic.
Jeffrey Long-McGie, an analyst for ThinkEquity Partners, said Schering-Plough could end up undercutting itself.
"Patients will be encouraged to switch to Schering-Plough's generic faster," Long-McGie said. "They could have held on to more of their Rebetol market share over the next few months."
As part of a patent litigation settlement, Schering-Plough was to have received royalty payments on sales of the other company's generics. By offering its own generic, it will not receive those payments, analysts said.
Wells Fargo Securities analyst Robert Uhl, in a research note, called the move by Schering-Plough "irrational."
Uhl lowered his 2004 sales forecast for Pharmaceutical Resources' version of the drug to $54 million from $64 million.
He dropped his 2004 Pharmaceutical Resources earnings forecast by 19 cents a share to $3.87 per share, and lowered his 2005 forecast to $3.65 from $3.90 per share, assuming the company will be forced to offer the drug "at a more aggressive price discount than the expected 35-40 percent reduction."
Long-McGie also lowered Pharmaceutical Resources earnings forecasts -- for this year to $3.68 per share from $3.87. He lowered his 2005 estimate to $3.81 per share from $3.92.
All forms of ribavirin are approved for use with interferon, an injectable medicine sold by both Schering-Plough and Swiss drugmaker Roche Holding AG (ROG.VX) that stimulates the immune system to fight the virus.
Schering-Plough had a U.S. monopoly on the dual therapy until Roche introduced its rival combination treatment in early 2003. The Roche combination now boasts the dominant market share, in part because its branded form of ribavirin costs about 40 percent less than Schering-Plough's.
Shares of Pharmaceutical Resources closed down $5.95 at $55.25 on the New York Stock Exchange .
Schering-Plough shares closed off 28 cents at $16.69.
"Pharmaceutical Resources is not in as good a competitive position long term, but the street has overreacted to the news," Long-McGie said.

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