Generics bite primary-care sales, but specialty drugs soar 18.4%

Suffering Big Pharma well knows that primary-care drug spending slumped in the U.S. last year. That's the patent cliff at work. But now, there's a number for that pain: Spending on mass-market meds dropped 1.5% in 2012. It's the first decline, ever, since Express Scripts started tracking the data two decades ago, The Wall Street Journal reports.

But if the sales numbers confirm the long-feared losses to generic competition, they also affirm the industry's new hope. Specialty drugs--such as cancer treatments, rare disease drugs, and anti-inflammatories--took a big leap. An 18.4% leap, to be exact.

Humira, the new reigning champion among drug products, is a case in point. Its category--biologic treatments for autoimmune disorders and inflammatory conditions, such as psoriasis and rheumatoid arthritis--grew by 23% last year, the Express Scripts report notes. That made it the biggest therapeutic category in specialty meds.

Likewise, hepatitis C treatments raced ahead, because of a new generation of treatments from Vertex Pharmaceuticals ($VRTX) and Merck ($MRK). That category grew by 33.7%, and it's only likely to continue, with new-and-promising combination therapies coming down several pharma pipelines.

For the industry, these are good signs. Some drugmakers have turned away from primary-care drug development almost completely, because specialty meds can command higher prices, and there are more unmet needs. Plus, specialty drugs are more difficult to copy once patents expire. Humira loses exclusivity in 2017, but unlike small-molecule generics, a biosimilar will have to go through clinical trials before FDA will let it onto the market. That may or may not happen before Humira's expiration date.

For healthcare spending, the rise of specialty drugs is a quandary. The 18.4% increase in the category for 2012 made up for the patent-cliff losses, and then some; overall spending grew by 2.7%. As pricey treatments keep coming, they'll only continue to fuel spending growth.

- check out the Express Scripts report
- read the WSJ piece
- get more from Bloomberg

Special Report: The 15 best-selling drugs of 2012