Drugmakers generally get fair warning when generics target their drugs, giving them some time to prepare for the inevitable eating away of revenues. But Amgen ($AMGN) was delivered a nasty surprise about its superblockbuster Enbrel this week when a new study found that a cocktail of generics already on the market was as effective at treating rheumatoid arthritis.
The study, conducted by the Department of Veterans Affairs and published Tuesday in The New England Journal of Medicine, is a rare look at comparing the effectiveness of generics vs. branded drugs, The Wall Street Journal reports. It found that a much cheaper "triple therapy" of methotrexate, the most frequently prescribed drug for the condition, in combo with two other generic pills worked as well as Enbrel.
Amgen said that given Enbrel's effectiveness it is confident in its continued use. Enbrel and drugs like AbbVie's ($ABBV) Humira, currently the world's top-selling drug, and Remicade from Johnson & Johnson ($JNJ) are the go-to therapies when methotrexate alone fails to get the job done.
Still, the lead author of the study, James O'Dell, said docs should give the cocktail a try on certain patients before moving on to more expensive biologics. O'Dell pointed out that while drug costs can vary, the average annual cost of the generic combo therapy is about $1,000 compared to $25,000 for Enbrel.
If there is a trend that way, it would be a hard pill to swallow for Amgen, which pulled in $4.23 billion last year from Enbrel. That was up 14% on some growth in demand and higher prices. Still, this year has been a bit tougher for the big biotech. Its first-quarter earnings fell short of analyst expectations, and the company earlier this year let about 160 people go. Sales of two of its biggest products--the anemia drugs Epogen and Aranesp--have been undercut by safety concerns. Neulasta and Neupogen, two of Amgen's other mainstays, are being hit by biosimilar competition in Europe.
O'Dell concedes, however, that even with cost pressures it can be hard to change doctors' minds toward new therapies when what they are using works. "Many rheumatologists believe that biologics are the answer to treating rheumatoid arthritis," he told the WSJ. "The results of one study, compelling as they are, aren't going to shift everyone over tomorrow."
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