A number of significant patent expirations and challenges are shaping the generics market. Last year, more than a dozen top-selling drugs became available as generics for the first time, and several of them rapidly climbed the list of the year's top-selling generics. This trend is sure to drive the current 57% generic utilization rate in chains higher.
The introduction of azithromycin, fexofenadine, and transdermal fentanyl helped generate strong sales of generics overall, according to IMS Health. Several big-selling generics launched the previous year also continued to grow strongly, including gabapentin, oxycodone HCl ER, and bupropion HCl ER, reported IMS. In general, according to Doug Long, vice president of industry relations at IMS, the best-selling branded drugs continue to turn into the best-selling generics.
These rapid shifts from branded to generic versions of specific drugs are due largely to the efforts of insurers, which are increasing their focus on quickly persuading members to move away from branded drugs as patents expire.
"Patent expiration is the real opportunity," said Eric Elliott, head of the medical-related products business unit at Aetna. Typically, he continued, 90% to 95% of the potential shift to a generic among subscribers has been achieved within the first 90 to 120 days. Overall, generic utilization has risen to about 55% among members, Elliott reported.
Insurers often are employing a combination of initiatives to increase generics use, with multiple programs aimed at pharmacists, members, physicians, and others. Some of these programs aim at promoting specific generics. Aetna recently launched a 6-month copay waiver pilot program in New Jersey for members who switch to generic omeprazole from branded proton pump inhibitors.
In some cases, the insurer looks to move generic utilization for a specific drug by at least 5%, Elliott said. Where the company wants to increase the use of a particular generic, pharmacist reimbursement for the generic may be set 25% higher than for the brand drug, he added.
Insurers also are using broader incentives to increase use, such as increasing brand copayments while keeping generic copayments steady, Elliott pointed out.
The use of generics increased markedly in several categories last year, among them diabetes care. Prescriptions for generic diabetes medicationsincluding metformin and multiple-drug therapiesgrew due to several factors, such as patients switching from brand drugs, falling prices, and the increasing incidence of the disease.
Increasing competition also has driven down prices in other categories, such as angiotensin-converting enzyme inhibitors. As a result, although total prescriptions for lisinopril swelled by more than 11%, retail sales in dollars actually shrank slightly, according to retail prescription data from Verispan.
One major focus for insurers, and for the generics industry in general, has been the Zocor (simvastatin) patent expiration this year. Teva Pharmaceutical Industries and Ranbaxy Laboratories won 180-day exclusivity for their generic versions. Protection for the statin Pravachol had already expired, and the FDA had approved the first generic pravastatin, also from Teva, earlier this year. Merck, however, decided to lower the price of its off-patent Zocor and signed an agreement with Dr. Reddy's Laboratories to sell "authorized" generic simvastatin, with the drug maker sharing the profits.
As long as blockbuster expirations continue, analysts expect the lineup of top-selling generics to keep changing.
Mr. Faden is a freelance medical writer based in Portland, Ore.