Big Pharma's Golden Age Leads To Generics Windfall

Originally published on May 20, 2011 2:25 pm

Chances are very good that the next prescription you fill will get you a generic medicine.

Three-quarters of prescriptions these days are filled with a generic. And the proportion keeps climbing.

Later this year, if all goes according to plan, the biggest generic switch in the history of the pharmaceutical industry will go down. Cholesterol-fighter Lipitor, the best-selling prescription medicine in the world, will lose U.S. patent protection, clearing the way for legal, inexpensive copies.

The wave of generics to treat conditions ranging from depression to high blood pressure can save consumers plenty of dough.

If your health insurance covers prescription drugs, you'll have a lower copay for a generic versus a brand-name drug. The exact savings would depend on the particulars of the plan, but could easily hit $20 or $30 a month.

If you have to pay for your medicines yourself, some big-box retailers and drugstore chains sell generics for rock-bottom prices.

Over the next couple of years lots of other big-selling brands will also go generic. Think Plavix, a blood thinner, and Actos, for diabetes, just to name two.

Why are there so many generics all of a sudden? Well, the wave actually got rolling a few years ago. Now, though, some of the biggest brands are involved.

The reason for all the action is that patents are expiring on medicines launched during the 1990s, which is looking more and more like a golden era of productivity for the pharmaceutical industry.

Typically the patents for prescription pills last about a dozen years or so. And as the clock runs out, the generics makers rush in.

How do American feel about generics? We asked more than 3,000 people last year in a survey conducted with Thomson Reuters. Eight-five percent of people said generics are as safe and effective as brand-name drugs. And 90 percent said they're willing to take a generic when one is available.

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MICHELE NORRIS, host:

And we turn now to prescription drugs. And let's consider a couple of dates: November 30, 2011; May 17, 2012. They might seem random, but they might also make a big difference to you if you happen to suffer from heart disease or high cholesterol.

That's because on those days the patents for two massively popular drugs used to treat those ailments will expire. In fact, six of the 10 top-selling prescription drugs in the U.S. will go off-patent in the next two years. And that means companies can begin offering lower-cost generic drugs.

For more, we turn to Scott Hensley. He writes and edits the Shots blog at npr.org. Welcome to the studio.

SCOTT HENSLEY: Thanks.

NORRIS: Scott, let's start with that first date, November 30, 2011. That's when Lipitor goes off-patent, a name that's probably familiar to many of our listeners. Tens of millions of people take this drug for cholesterol. What can they expect?

HENSLEY: That's right. It's a landmark in the pharmaceutical industry and for consumers because on that date, the bestselling prescription drug in the world will go generic, and that means that people will be able to buy it more cheaply.

It won't happen overnight. It will drop a little bit because there's one other company that has the rights to sell a version of Lipitor, along with Pfizer, for about six months. But then, at the end of that six-month period, the bonanza really begins.

Then scads of companies will pile in, each trying to outdo the other on how cheaply they can sell the generic version of Lipitor.

NORRIS: So a lot of companies offering these generic versions. How much savings are we potentially talking about?

HENSLEY: Ninety percent or more. So there's two ways that people can save. For people who have insurance, they typically have a co-pay that they have to pony up when they fill the prescription. So once something goes generic, they get the lowest co-pay, five or 10 bucks. So on some plans, Lipitor might be $30 or $40 co-pay right now.

The other way that people might save is that for those who don't have insurance, they can go to one of the big-box stores, like Wal-Mart for instance, that sells generics cheaply, and eventually you might see Lipitor for $4 for a month's supply.

NORRIS: Now, we mentioned that there are other drugs that are moving off-patent. Give us a list of those drugs.

HENSLEY: Right, well, the other date that you mentioned in the intro is for Plavix, which is the second-most-popular drug in the world, at least when measured by sales. That medicine is a blood thinner, and it's taken often by people at risk of developing blood clots or people who have had stents implanted in their heart.

That one, when it goes generic, will also be big cost savings for many people.

NORRIS: Others?

HENSLEY: There's a diabetes drug called Actos, which may not be quite as well-known as those two, but it's become more prominent in recent years. And in 2012, that's one that should come off-patent and be available in generic versions, too.

NORRIS: Why is this - why do we see this case where a cluster of drugs are all going off-patent right around the same period of time?

HENSLEY: We're seeing an echo of the pharmaceutical industry's golden age of innovation and product development during the '90s. So blockbuster drugs that became household names, everything from Prozac from depression to Lipitor for cholesterol, really had their heyday in the '90s.

A patent for a prescription drug usually lasts around 10 or 12 years. And so now what we're seeing is many of the medicines that were launched at that time and became such household names are now losing that protection, and so generic companies can come in and make them.

NORRIS: You know, I'd love to bring you back to talk about this question more deeply at some point, but when we talk about generic drugs, are they basically the same replacement for the patented version of the drug? Is there any difference?

HENSLEY: Yes, they have to show that they are the equivalent of the brand-name drug and satisfy the Food and Drug Administration that they are interchangeable.

NORRIS: That's Scott Hensley. He writes and edits the Shots blog for npr.org. Scott, thanks so much.

HENSLEY: My pleasure. Transcript provided by NPR, Copyright NPR.