GPhA gives high marks to 2003

Matching the balmy weather outside, spirits were high at the Generic Pharmaceutical Association (GPhA) annual meeting in Boca Raton, Fla., in March. Buoying the spirits of industry executives and analysts were the Hatch-Waxman reform, enhanced relationship with the Food & Drug Administration, and a committed partnership with government and consumers.

"We have an uptapped opportunity to save consumers millions of dollars on medications; we'll spread the message of savings," said president and CEO Kathleen Jaeger, who unveiled a massive consumer education campaign that GPhA plans to roll out in the spring of 2004. Jaeger told meeting attendees that GPhA would use its education campaign to dispel consumer misconceptions about generics.

Jaeger also announced that GPhA would oppose authorized generics (see page 15s) because they devalue the 180-day exclusivity provisions of the Hatch-Waxman Act. It is GPhA's position that successful patent challenges accelerate consumer access to affordable drugs, she noted.

At a much anticipated address to meeting attendees, FDA commissioner Mark McClellan, M.D., unveiled a plan to provide more information to the public to help generic drug applicants determine if they are eligible for 180-day marketing exclusivity for their products. McClellan also announced a process to effectively implement the major reforms of the Hatch-Waxman law contained in the Medicare Modernization Act. He added that the FDA would disclose on its Web site the date on which the first complete generic drug application containing a challenge to a patent listed for an innovator drug was submitted to the agency. The information that will be displayed includes: submission date, trade and generic name of the drug, dosage form, and strengths of the drug products. McClellan told meeting attendees that the FDA would publish a Federal Register notice seeking public comment on how best to implement reforms to the Hatch-Waxman amendments.

But it was the hard, cold facts about the 2003 generic pharmaceutical industry that grabbed the audience's attention. Doug Long, VP of industry relations for IMS Health, reported that while the year got off to a slow start, the U.S. pharmaceutical market in 2003 exceeded $216 billion, topping the $200 billion mark for the first time. Total prescriptions dispensed in retail and long-term care surpassed 3.4 billion, while the market grew by 11.5%—slightly behind 2002, when it rose by 12%.

There was more good news for the partisan crowd when it was revealed that generics grew by 22% and biologics by 22% (see chart below). Generic dollars exceeded $16 billion in 2003, and total generic prescriptions dispensed reached 1.4 billion. The overall message, according to Long: "It's a great period of time to be in the generic and biotech industries. For the brand industry, it's a very defensive time." Long pointed out that generics are growing faster than the total U.S. brand-name market in terms of dollars.

Long asserted that the industry benefited from some major patent expirations in 2003, although not as many as in 2002. Long said three flat quarters in 2003 were offset by a strong flu season in December that boosted fourth-quarter numbers.

Among the drivers behind generic growth: demographics, increasing size of generic opportunities (more than 11 blockbuster drugs lost patent protection since 2001), innovation drought experienced by brand manufacturers, rising co-pays, and a favorable political and economic climate.

"Patient co-pays have risen and in some instances exceeded people's willingness to pay. That has caused a decline in the growth rate not only on a dollar basis but also on a prescription basis," Long noted. The tiering effect with higher copayments on certain drugs leads to fewer prescriptions and a higher rate of noncompliance, he explained.

As for the future of the generic market, Long said that analysts are forecasting significant generic growth, especially in 2006.