Developing nations offer welcoming and growing markets as Abbott focuses exclusively on reformulating and marketing off-patent medications
Driven by patient loyalty, prescriber preference, pharmacist trust, and traditional marketing, branded generics outearn and outsell unbranded generic drugs in many countries. This looks to become more common as other pharmaceutical companies follow Abbott’s lead in making branded generics a principal — or the only — component of their business.
An Old Medication in a New Formulation
The best definition for “branded generic” probably comes from U.K. pharmacy think tank PrescQIPP.
In a May 2016 bulletin to the National Health Service titled Branded Generic Drug Savings, the group explained that “a branded generic is the brand name given to a drug that is bioequivalent to the original (innovator) brand, but once the original brand has come off patent it is marketed under another company’s brand name, not the generic name.”
Aside from a brand name, branded generics usually share two other characteristics. Most come in a formulation different or improved from their innovator equivalent, and almost all enter markets with advertising and detailing pushes.
A preeminent example of branded generic competition in the United States involves metformin. The leading brand name type 2 medications that use metformin as their principal active pharmaceutical ingredient are Bristol-Myers Squibb’s Glucophage XR and Salix’s Glumetza. Both are extended-release release versions of immediate-release formulations of an immediate-release innovator.
Emerging Markets Clamor for Branded Generics
Despite notable successes like those, branded generics account for only around one-tenth of the U.S. prescription drug market. In India, by contrast, more than 60 percent of the money spent on medications during 2015 went to branded generics. Chinese patients also showed a preference for branded generics, giving 55 percent of their drug spend to the products.
A recent analysis of why branded generics dominate the pharmaceutical marketplace in India identified three reasons. The first is that doctors and patients trust brands from known manufacturers such as Sun Pharmaceutical and Dr. Reddy’s. This trust grew, and is maintained, to a large degree by some one million pharmaceutical reps and detailers who handle branded generic accounts the same way that similar salesforces handle breakthrough medications just approved by the FDA or EMA.
The third reason prescribers, pharmacists and patients prefer branded generics is that they recognize that the drug delivery system can matter as much as the dosage and quality of the active pharmaceutical ingredient. Since a key characteristic of a given branded generic is its unique formulation, it offers more than the bioequivalence required of an unbranded generic drug product. The example of this offered in the analysis is metformin.
Barriers to Adoption Persist
Research by QuintilesIMS indicates that sales of branded generics around the world could top $320 billion by 2021. This would represent nearly double the dollar sales of unbranded generics.
Factors that might curtail the reach of branded generics include the possible spread of political and economic instability like that seen in Venezuela and a proposed policy in India to require the prescribing and dispensing of unbranded generics. Adopting a decision matrix developed by PrescQIPP could also slow the addition of branded generics to health plan formularies.
According the organization, the higher prices for branded generics should usually make them expendable choices unless the products meet all of the following criteria:
- Interchangeable with the innovator product in terms of bioavailability, release profile, and indication;
- Dispensable with full prescribing and patient information;
- Listed in the prescriber’s clinical system;
- As widely available from wholesalers and community pharmacies as the innovator product;
- Priced steadily over a reasonable period of time; and
- Unlikely to drive equivalent unbranded generics out of the market due to price competition.
A Singular Vision
Such considerations have not deterred Abbot, which spun off its brand name drug business as AbbVie in 2013 in order to serve only emerging pharmaceutical markets with branded generics. Abbott’s leading competitors in this space are Sun, Valeant and the Novartis AG subsidiary Sandoz.
The Illinois-based drugmaker’s strategy has paid off, delivering $3.9 billion in sales of branded generics during 2016 and an operational sales growth of 10.5 percent for that year.
Speaking with Pharmaceutical Executive in late 2017, Abbot’s executive vice president for established pharmaceuticals, Andrew Lane, explained his company’s dedication to branded generics in terms of a fulfilling a mission to serve patients while paying attention to the bottom line.
According to Lane,
Four of the world’s seven billion people live in emerging markets. That’s a lot of people that need access to quality, affordable medicines. As incomes rise and middle classes grow, there are increasingly more and more people in emerging markets that have money to spend on their health. And when paying out of pocket for healthcare, as most people do in emerging markets, they tend to choose the best they can afford and gravitate towards brands and companies they know and trust.
Expanding on Abbott’s commitment to improve communities’ health, Lane emphasized that “70 percent of our high-quality medicines sell for less than seven rupees (roughly 10 U.S. cents) per pill.” He also highlighted the company’s international health care providers website, Knowledge Genie, which offers “news about the latest treatments and techniques from over 3,000 medical journals and 2,000 e-books, as well as daily updates on research and clinical developments.”
Abbott has built its portfolio of more than 1.500 drug products through a combination of in-house development and the acquisition of smaller branded generic firms like Russia’s Veropharm and Chile’s CFR Pharma.
Importantly, Abbott bases its branded generics on molecules and APIs it or its subsidiaries once held patents or earlier generic licenses on. This shortens and reduces the costs of product development cycles while also justifying the treatment of new products as innovations.
One of its newest offerings, Duphabears, puts the child laxative lactulose into a chewable, flavored gummy. Sold in Russia, Eastern Europe and parts of Africa, the bowel stimulant comes in a dosage form children will be less likely to reject. AbbVie, meanwhile, continues offering a powered form of lactulose for oral solution.Copyright © DrugPatentWatch. Originally published at Branded Generics Promise Profits for Drugmakers, Peace of Mind for Patients
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