Insurance companies promote generic drugs aggressively, and their policies significantly affect the sales of innovator brands after their patent expiry. Success of the combat strategies adopted by innovator companies such as introducing new, user-friendly formulations of the innovator brand rely largely on the cooperation of reimbursement agencies.
This is evident in the case of Prograf, a blockbuster immunosuppressant for transplant rejection. Generic tacrolimus products accounted for 44% of the market share in the United States in April 2010—soon after its patent expiry in late 2009. This rapid replacement was driven by the payment-withdrawal policy adopted by insurance companies that categorized Prograf as a Tier 4 drug, which made high co-payments from patients necessary. As a result of this policy that pushed the uptake of generics, the new once-daily formulation of tacrolimus (Advagraf) launched by Astellas to retain Prograf patients did not become successful in the U.S. market.
Even biologics are no longer free from competition, although the threat from biosimilars is lower due to the significant regulatory and technology challenges involved. However, bio-betters can become an emerging threat. These are the second-generation biologics that offer safer and more effective solutions such as the bio-better of Actemra under development by Femta Pharmaceuticals.
An IL-6 receptor inhibitor from Roche, Actemra is indicated for rheumatoid arthritis. The bio-better drug is expected to be more effective and convenient as it can be self-administered rather than injected. Investors have shown considerable interest in bio-betters since they offer less financial risk, as their clinical performance is already established—even though clinical trials are still required.
Clinical acceptance will ultimately decide the fate of these drugs. Since biologics are complicated therapies used to treat complex conditions, convincing physicians to switch to generic versions will be challenging. Moreover, prescribing generics is relatively unpopular in some countries such as France and Japan. Acceptance of biosimilars may prove to be even lower in those markets since additional worries over bioequivalence are involved. Hence, a push by payors to reduce expenditure may become a crucial factor that will decide the market share of innovator brands.
Traditionally, immune disease treatments have focused on controlling symptoms. Even though replacement-of-symptom treatments by targeted therapies is expected to follow the scientific breakthroughs of the sector, traditional methods still seem to be popular, at least in some immune disease segments. The market size of the symptom-treating drug market is expected to decline at a slow CAGR of -3% between 2010 and 2015.
Immune diseases are poorly understood, which makes symptom treatment all the more important. In addition, the multiple pathways involved in immune diseases complicate drug development efforts. Moreover, some diseases cannot be cured after onset. For example, once the pancreatic cells are destroyed by autoimmune reactions, type 1 diabetes patients have no alternative but to use insulin to survive. This is, in essence, treating the symptoms instead of regenerating the destroyed pancreatic cells.
Another important factor that helps to maintain demand for symptom-relief therapies is that some diseases already have effective, safe, and cheap remedies. For example, drugs such as histamine antagonists are effective and safe for controlling the annoying symptoms associated with seasonal allergies, which are not life-threatening conditions and normally get cured by themselves.
This sets the bar for new treatments high. The drugs that treat the underlying cause of allergies may result in unacceptable adverse reactions. Moreover, most of these drugs are now generic and affordable and it will be a challenge for developers to meet both the efficacy and cost advantages set by these drugs in the market. Hence, affordable and safe symptom-treatments are here to stay.