UK government backs generic statins: pravastatin, simvastatin
The UK National Health Service could save at least 85 million a year through more efficient prescribing of cholesterol-lowering statins, says a new report from the Department of Health.
The volume of statin prescribing has gone up over 150% in the last five years, costing the NHS around 600 million in 2005, it says. However the costs of statins vary markedly, depending on whether they are branded drugs generics.
The report shows Primary Care Trust prescribing levels for generic versions of pravastatin and simvastatin, two of the five statins currently approved for use within the UK. They indicate that if every PCT prescribed pravastatin and simvastatin in 69% of cases, the level achieved by the top quarter of Trusts, over 84.7 million could be saved in a year.
"As new drugs become available, the local NHS will increasingly have to look closely at the resources it spends on common treatments to ensure it is getting value for money," said Health Minister Andy Burnham. "Statin prescription is one of the areas that can release the most savings which can be ploughed back into patient care.
Clinicians can help to treat more patients by prescribing one of the lower cost drugs where it is clinically appropriate. The National Institute for Health and Clinical Excellence (NICE) has confirmed that generic versions of statins are as effective for most patients as their more expensive, branded counterparts," he added. By Lynne Taylor
ABPI warns statin move could hurt R&D investment
The Association of the British Pharmaceutical Industry has voiced concern at the drive to use more generic drugs in the National Health Service after one health authority said that using an out-of-patent statin could save 24 million ($46m) a year in its patch.
The East of England Strategic Health Authority, which oversaw a deficit of more than 200 million last year, is aiming for 80% of all statin prescriptions in its area to be for simvastatin - now available as a generic drug. The authority's director of commissioning, Dr Paul Watson, said the move would save 23.8m a year. He said it was around one-sixth the cost of branded statins "and its effectiveness at reducing cholesterol has been proven."
The National Institute of Clinical Excellence has recommended the prescription of statins to a wide range of patients at risk of cardiovascular disease.
The SHA's move is in line with the Department of Health's efficiency programme and it was swiftly endorsed by Professor Roger Boyle, the national director for heart disease and stroke.
Dr Watson said: "We must ensure we use NHS funds carefully and concentrate our spending where it can do the most good."
But an ABPI spokesman warned the Whitehall-led drive to increase the use of generics could hit future R&D investment in the British pharma industry.
"We were concerned that there was no consultation on this policy as part of the NHS networks and we are now in on-going discussions with the department about our concerns," the spokesman said.
Statins 'underused' says BMJ study
Statin therapy has received another boost - this time from a report in the British Medical Journal claiming the cholesterol-lowering drugs are seriously under-used.
Analysis of data on over 20,000 people found that the drugs could benefit both younger people and people less as risk of heart attack than current guidelines suggest.
The Oxford Unversity team found that statin treatment was cost effective in people as young as 35 and as old as 85 with an annual risk of a major vascular event as low as 1%.
This is well below the risk threshold currently recommended by the National Institute for Health and Clinical Excellence (NICE).
Large trials have shown that lowering blood cholesterol levels with statins greatly reduces major vascular events, such as heart attacks and strokes, in people at high risk.
And research published in 2005 from the largest of those trials (the Heart Protection Study) showed that when cheaper generic versions are used, several years of statin treatment is cost effective for a wide range of people with vascular disease or diabetes.
The Heart Protection Study involved 20,536 men and women presenting at age 40-80 with heart disease or diabetes. They were randomly allocated to receive either 40 mg simvastatin daily or placebo for an average of five years.
Using data from this study, the Oxford researchers have now estimated the lifetime cost effectiveness of 40 mg of simvastatin daily for people in an even wider range of age and underlying vascular risk categories.
The research team found that treatment with generic simvastatin would be cost saving for most of the age and risk categories included in the heart protection study.
In other words, the reduced costs of hospital admissions as a result of fewer vascular events outweighed the increased costs of statin treatment in almost all of the categories studied.
Oxford Unversity health economist Dr Borislava Mihaylova, said: "Clearly these drugs are cost effect for this larger group of people as well. There are currently two million people on statins. It could be that millions more would benefit."
Professor Peter Weissberg, Medical Director at the British Heart Foundation, said: This analysis suggests that through the health benefits that simvastatin offers, it is cost effective to offer the treatment to many more people than are currently considered eligible.
He added: "However, of even more importance is the need to ensure that everyone at very high risk gets the treatment they need."
Can price-cutting take the shine off generics?
There are many ways to soften the impact of generic competition. A great deal of energy and money goes on strategies to delay generic entry, whether through aggressive litigation, lobbying for extended patent terms or incremental product development such as new indications or formulations, writes Peter Mansell .
Once intellectual property protection runs out, the assumption tends to be that the game is up. Yet there are options for limiting damage in the marketplace. The US, for example, has seen increasing recourse to 'authorised' generics, whereby the patent holder launches its own generic version either independently or by striking a deal with an experienced generic operator. Less discussed is the most direct means of fending off generic incursion: by competing on price.
In the last month, two key patent expiries in the US have prompted suggestions that the research-based industry may be entering a new era of generic defences. One was the antidepressant Zoloft (sertraline), where Pfizer hopes to take the edge off patent exposure by introducing its own generic version through its Greenstone subsidiary.
More notable was the loss of patent coverage on Merck & Co's cholesterol treatment Zocor (simvastatin).What has excited commentators about Merck's response is its unusual ploy of offering substantial rebates to health insurers that charge a lower co-payment for Zocor than for generic equivalents. Merck has also hedged its bets by launching an authorised generic simvastatin through Dr Reddy's Laboratories.
The discounting strategy drew a sharp response from Senator Charles Schumer, who urged the Federal Trade Commission (FTC) to investigate "these anticompetitive behaviours expeditiously". Manipulating "the consumer price of these drugs to preserve the market share of the more expensive product is unconscionable", he said.
Given that the prices of branded medicines are routinely lambasted, it may seem perverse to accuse Merck of impeding competition by undercutting generics. The fear, though, is that deep discounting and the widening flow of authorised generics will eventually dull the appetite of generic competitors to risk expensive patent challenges through Paragraph IV applications.
The recent resurgence of financial settlements that stave off generic entry may partly reflect the thinner pickings available to first filers through the Paragraph IV channel. The prize of a six-month exclusivity period is crucial to generic players for the same reason originators cling to their patent exclusivity: the less competition there is, the less reason to lower prices. First-filers generally make hay during the exclusivity period, with prices held at 70-80% of the brand.
Authorised generics can gatecrash this honeymoon because the FDA treats them as brands, so exclusivity provisions do not apply. Indeed, the Generic Pharmaceutical Association regards these products as "nothing more than brand pharmaceutical products masquerading as generics".
The FTC is taking a close look at whether authorised generics act as a damper on competition. It is also likely to continue pursuing the matter of settlements, despite a recent setback in the US Supreme Court. In the meantime, members of the Senate Judiciary Committee have announced legislation aimed at thwarting "sweetheart deals that delay the entry of low-cost drugs".
While authorised generics are now a routine occurrence with major patent expiries, the jury is out on whether the Zocor pricing strategy will prove a long-term trend. Teva, one of two companies awarded marketing exclusivity for generic simvastatin, claims its own generic launch has been an unqualified success.
There are a number of reasons why patent holders may be looking at fresh approaches to defending their assets. One is the high cost of litigation against the swelling ranks of patent challengers.
Another is that the assets in question are particularly valuable. Last year Zocor (simvastatin) was the number two brand in the US market with sales of US$4.4 billion; Zoloft ranked seventh with sales of US$3.1 billion (IMS Health data). A third factor is that a number of loopholes exploited by research-based companies to spin out patent life have now been closed, both in the US and Europe
While the threat of patent expiry is universal, its circumstances and consequences are a little different on this side of the Atlantic. For one thing, authorised generics are less of a phenomenon in Europe, particularly as there is no generic exclusivity for patent holders to undermine.
Nor is there such an incentive to discount, with price controls already narrowing the margin between brands and generics. "US companies, when they start discounting, are starting off from a much higher price level than European companies," points out Peter Wittner, founder of UK-based generics specialist Interpharm Consultancy.
In the UK, however, the intensity of generic competition is more akin to the US model. According to IMS MIDAS data, the average price differential between generics and branded equivalents four years after launch is 80%.
The British Generic Manufacturers Association (BGMA) says deep discounting has already arrived in the UK market, particularly just after patent expiry and during the first six months to a year of generic competition. Pricing flexibility under the Pharmaceutical Price Regulation Scheme allows research-based companies to pursue 'brand equalisation' policies. Some or all of a product is sold at the generic market price and pharmacists can dispense the brand against a generic prescription without losing out on reimbursement.
According to BGMA spokesman Alex Harris, this leeway enables brands to be discounted at levels "wholly detached from the realities of the marketplace". There are also authorised generics in the UK, he notes, although they are neither as visible nor as divisive as in the US market.
Wittner cites the case of GlaxoSmithKline, which gave Generics UK permission to market an unbranded version of ranitidine prior to patent expiry. But the practice is unlikely to take off in Europe with anything like the urgency seen in the US, given the lack of an exclusivity incentive or a regulatory equivalent to the FDA's role in checking patent status, he believes.
He envisages European brand holders relying less on discounting than on product modifications to lift drugs out of the range of the generic competition. As far as discounting goes, "it all depends on the company's philosophy as to whether it just writes off the product after patent expiry or decides to try to retain some of the prescription volume, albeit at a significantly reduced price", Wittner comments.
"Many branded companies, as part of their defence strategy, develop an improved, and usually cheaper, route of synthesis a few years after the original patent," he observes. This widens the opportunity "to market their own generic and so compete with generic companies who will be relying on an Active Pharmaceutical Ingredient that is manufactured according to the original, more complex and thus more expensive route of synthesis".
Roy Gentry, head of communications and public relations at the European generic medicines association, the EGA, agrees that the threat of discounting and authorised generics is less pronounced in Europe. Drug pricing is an altogether more complex proposition as companies rarely negotiate with private insurers.
If brand owners were to engage routinely in heavy discounting, though, it could be cataclysmic for some generic companies, Gentry adds. The industry already subsists on "extremely small" margins. Nonetheless, he sees more defensive activity from the branded sector at the regulatory level, particularly in respect of 'patent linkage' and the generic naming of biosimilar medicines.
Patent linkage, in which regulatory authorities come under pressure to stall approval of generics if reference drug's patent status is unresolved, is a marked problem for the generics industry in Central and Eastern Europe. While a Romanian law tying generic approvals to patents has recently been repealed, in the Slovak Republic a successful push for repeal of comparable legislation has been overruled.
Finland has also gone down the patent linkage route. Amendments to its Medicines Act allow marketing authorisation holders to ask for patented products and their generic equivalents to be withheld from the country's generic substitution list. More damagingly, this request may be made, inter alia, on the basis of a national process patent filed before 1 January 2005, when product patents were introduced in Finland.
Originators are also squeezing the generics industry in the emerging field of biosimilars. Here the aim is to deny generic versions of biotechnology products use of the reference drug's international non-proprietary name (INN), Gentry notes. Doing so would scotch any claims to therapeutic equivalence and effectively rule out generic substitution.
Despite these serious points of contention, Gentry says research-based and generic companies are no longer locked in the kind of "head-on battle" that used to characterise their relationship in Europe. All the same, it is clear neither side is ready to lay down its weapons quite yet.