Global Insight Perspective
Indian generics firms Ranbaxy, Dr. Reddy’s and Wockhardt have all announced approvals, alongside U.S.-based Hospira and Par Pharmaceuticals, in addition to the previously announced clearance of Israeli company Teva’s version. Exclusivity will probably fall to Dr. Reddy’s, although Teva’s early entry has raised a question mark over this.
The entry of generic competition represents a major development in the anti-emetic market. Zofran represented a minor revolution in oncology care and quality of life, and the entry of generics will significantly cut healthcare costs. It also affects competitors such as Merck & Co’s (U.S.) Emend (aprepitant), which faces patent expiry in 2012
The R&D industry suffered a tough 12 months of genericisation in 2006, particularly towards the end of the year (Wellbutrin XL, Zocor, Zoloft, Proscar), but 2007 will present fewer blockbuster opportunities for generics companies, although major franchises such as Risperdal, Coreg, Seretide and Norvasc face impending challenges.
Zo Long, Zofran
A series of generics companies have announced U.S. FDA approval for cut-price anti-nausea drug ondanestron, which has been sold under the brand name Zofran by GlaxoSmithKline (GSK, U.K.). Zofran achieved global sales of £682 million (US$1.3 billion) during the first nine months of 2006, on the back of 11% year-on-year (y/y) growth, with the U.S. market accounting for 79.6% of this. First off the mark is Dr Reddy’s (India), which has announced approval for a full range of doses, including 4 mg, 8 mg, 16 mg and 24 mg.
Dr Reddy’s also claims that it has been granted 180-day marketing exclusivity by the FDA. This is at once both expected and surprising; Dr Reddy’s had long positioned itself as the first in the queue for generic Zofran, after the separate ruling to grant Israeli generics giant Teva exclusivity on generic pravatastin back in April. Due to its significance on uncontested patents, this ruling had significant implications for Dr Reddy’s first-to-file status for ondanestron.
However, Teva subsequently opened the issue last month by receiving FDA approval for three formulations of generic Zofran: 4 mg/2 mL single-dose vials, 40 mg/20 mL multiple-dose vials and 32 mg/50 mL bags. The premixed versions are manufactured by Teva unit Sicor, and GSK eventually acceded to cutting part of its exclusivity period (around six months).
The other companies that have announced approval and launch of generic ondanestron this week are Indian rivals Wockhardt and Ranbaxy, and U.S. companies Par Pharmaceutical and Hospira (4 mg single-dose vials and 40 mg multi-dose vials, via its acquisition of Mayne). Canada's Apotex is still engaged in court proceedings to prevent the launch.
Outlook and Implications
Despite the transfer of the Zofran franchise from a monopoly to a duopoly, via a period of generic exclusivity, the market is already crowded with players specialising in a variety of formulations. Global Insight is assuming that Dr Reddy’s, as first-to-file, will hold the exclusivity period on its higher range of products, although 4 mg and the multi-dose presentations are open to competition. This marks a significant difference from the usual patent expiration, where the 180-day exclusivity period delays the price erosion caused by generic versions. Price competition will therefore begin very early for ondansetron, in a market that we estimate at US$50-90 million for the various competitors.
GSK, meanwhile, will shift its strategy from maximising sales growth to maximising profitability; it will focus on brand loyalty in this context, although hospital purchasers will be pressured by budget constraints to opt for ready-made generic batches. While Dr Reddy’s holds an immediate advantage, we see Hospira and Teva as holding an important edge through their stronger presence in the hospitals market. However, this will be an important franchise for Dr. Reddy’s, and a significant growth-driver for 2007, when we expect to increased visibility of Phase III compound balaglitazone.
- Israel: 23 November 2006: Teva Receives Approval for Generic Zofran