Australia - How will the imminent expiry of a number of blockbuster drugs affect the Australian pharmaceutical market?

The Australian generics market will benefit from the impending patent expiry of a number of successful drugs, which will cushion it against further government price cuts.

Recently-released data from the Pharmaceutical Benefits Scheme (PBS) indicated that 12 out of the top 20 best-selling drugs by volume in 2008 were now available as generic drugs; the majority of these drugs experienced falling sales in the same year. An example of one of these drugs is Merck’s Zocor (simvastatin), whose patent expired in December 2008; this was the second leading drug by volume of sales. However, generic drugs are also going to be the target of further PBS price cuts, as the Scheme seeks to keep health expenditure low. For example, legislation that came into effect towards the end of 2008 has generally been viewed as negative by generic companies, which believe that they reduce the pharmacist’s ability to discount, as well as cutting prices.

It is likely that Australian imports of pharmaceuticals will increase by a substantial amount in 2010. This is because the Australian dollar in 2010 is projected to be as close to parity with the US dollar as it ever has been. Having invested in R&D pipelines in recent years, the PBS will be expecting new blockbuster drugs to emerge, and like in the past, the PBS will be willing to pay for them. Indeed, generic drugs will likely face the brunt of price cuts if a new blockbuster drug were to emerge.

Further reading - A detailed analysis of the Australian pharmaceutical market is available from Espicom: The Pharmaceutical Market: Australia (published January 2010)

UK - NICE Approves Erbitux for NHS Use

The National Institute for Health and Clinical Excellence (NICE) issued final guidance in August 2009 recommending the use of Erbitux (cetuximab) on the NHS to treat bowel cancer.

More specifically, Merck KGaA’s Erbitux has been approved for use in combination with the chemotherapy FOLFOX (5-fluorouracil, folinic acid and oxaliplatin) as a first-line treatment for patients with colorectal cancer. However this is subject to the following conditions: the tumour in the bowel must be operable; the cancer must only have spread to the liver and is inoperable; and the patient must be well enough for surgery on both tumours if this is possible after the treatment has taken effect.

NICE has also approved the use of Erbitux in combination with FOLFIRI (5-FU, folinic acid and irinotecan) as a first-line treatment if the patient is unable to take oxaliplatin.

The drug is subject to a cost-sharing agreement proposed by Merck, whereby it offers a 16% rebate to the NHS on the cost of treatment per patient. NICE has also stipulated that no one should be treated with the drug for more than 16 weeks.

Further reading - A detailed analysis of the UK pharmaceutical market, including some background information on NICE, is available from Espicom: The Pharmaceutical Market: United Kingdom (published June 2009)