Generics makers are gearing up to enter a competitive U.S. market with copies of respiratory superstar Advair. But they’re confident they can shore up market share without vastly undercutting one another on price.
As Mylan President Rajiv Malik told Reuters, “nobody wants to kill the market”--and they shouldn’t have to. The way Mylan sees it, it will be maker GlaxoSmithKline “plus one competitor for some months and then two competitors for maybe 12 to 18 months," he told the news service. "We believe it is not going to be a commoditized product."
Mylan, whose substitutable generic product should have a verdict from the FDA by March 28 of next year, is hoping to be that one competitor. But a rival version--from U.K.-based Vectura and Jordan’s Hikma--isn’t far behind, with its own FDA decision date slated for May 10. Malik predicts a hiatus after that, though, which he thinks should prevent excessive discounting.
Vectura CEO James Ward-Lilley doesn’t expect to see anything too extreme in the way of price-cutting, either, he told Reuters.
"Mylan won't have the manufacturing capacity to serve the whole market. Nor will we. That should lead to some rational behavior in terms of pricing," he said.
Both players are salivating at the chance to finally nab a piece of Advair’s business. While the megablockbuster lost its U.S. patent protection back in 2010, its hard-to-copy Diskus inhaler technology has foiled copycat attempts from many a drugmaker--including powerhouse Teva. And the way Ward-Lilley sees it, they’re sitting pretty, with cost-conscious pharmacy benefits managers--including outspoken Express Scripts--likely to flock to cheaper copies.
Of course, PBMs’ formulary tactics have already forced the price of Advair down over the last couple years. Glaxo has had to drop prices significantly in order to hang on to its formulary status, and sales of the med have consequently taken a beating. But there’s still “quite a bit of room” for generics to get in there while preserving the market, Malik told Reuters, noting that despite the payer pressure, “the price is still pretty attractive to bring in a generic.”
As for GSK, it’s not too worried about the arrival of knockoffs makers. For one, the possibility of regulatory delays makes it unclear just exactly when that’ll happen--and the agency may decide the generics aren’t fully substitutable, which could limit their impact.
And for two, because of the payer pressure, the pharma giant has “already absorbed a big chunk of the genericization effect,” CEO Andrew Witty told investors last month. When combining that fact with the recent success of respiratory newcomers Breo and Incruse, he sees a “very, very positive picture.”
- get more from Reuters
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