Novartis took its first big hit from new Diovan generics during last year's third quarter, when Ranbaxy Laboratories finally won approval for its exclusive generic of the blood pressure pill. And it was indeed a big hit: a 76% drop in U.S. sales for the franchise, to $97 million.
Now, an onslaught of competition is coming. Ranbaxy's 6-month exclusivity has expired, and U.S.-based generics giant Mylan ($MYL), along with Indian drugmakers Lupin, Aurobindo Pharma and Jubilant Life Sciences, are rolling out their copies. If historical data on generics launches holds true, then prices for Diovan copies are about to take a big fall.
Much of the damage to Diovan's U.S. sales has already been done. But with this latest round of launches, Novartis ($NVS) will not only face stepped-up competition for the Diovan brand, but for its own authorized generic copy.
|Sandoz chief Richard Francis|
With that authorized version, launched by its generics unit, Sandoz, Novartis managed to make up a good bit of its third-quarter loss in branded sales. During the company's third-quarter earnings call, Sandoz chief Richard Francis said its version captured about 50% of the market for generic Diovan monotherapy. (A combo pill, Diovan HCT, has faced generics since 2012.)
Sales haul from that product? A tad more than $100 million, CFO Harry Kirsch said during the call. Add that to the $97 million in the branded franchise, and you're up to almost half the $420 million Diovan products brought in during 2013's third quarter.
We'll see whether that trend held for the fourth quarter when Novartis reports those numbers January 27. The results of this week's round of new copies? That will have to wait till April.
Still, whatever pain Novartis feels from the advent of copycat Diovan monotherapy, it's been a long time coming. The Swiss drugmaker enjoyed billions in branded sales while Ranbaxy floundered around with its copycat product. Because Ranbaxy had 180-day exclusivity under the Hatch-Waxman Act, no other generics maker could launch, despite the fact that Ranbaxy had failed to win approval. Now, AstraZeneca ($AZN) may experience a similar benefit from delays to Ranbaxy's Nexium copy.
- read the Mylan release
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