Big drug makers see sales decline with their image
WASHINGTON, NOVEMBER 14: The drug industry’s image problems are beginning to hurt pharmaceutical companies where it matters most-at the bottom line.
A year after Merck’s withdrawal of its arthritis medicine Vioxx led to an industry-wide credibility crisis, the Food and Drug Administration is blocking new medicines that might previously have passed muster. Doctors are writing fewer prescriptions for antidepressants and other drugs whose safety has been challenged, like hormone replacement therapies for women in menopause.
Meanwhile, insurers and some states are taking advantage of the backlash against the industry to try shifting patients to older, generic drugs, arguing that they work as well as newer and more expensive branded medicines. Overall, prescriptions continue to rise slightly, but an increasing share of prescriptions are going to generic drugs. Also, consumers seem to be less responsive to aggressive drug marketing.
“The demand has been through promotion, and for that promotion to be effective, there has to be trust,” said Richard Evans, an analyst. “That trust has been lost.”
In the background, new competitors are forcing the old-line drug giants to struggle to keep pace. Biotechnology companies like Genentech are taking the lead in finding new treatments for cancer, a promising and lucrative field.
The major drug makers remain highly profitable. But at some, including Pfizer and Merck, the largest and third-largest US companies in terms of revenue, sales are stagnant and profits are falling, leading to layoffs and-for the first time in years-cuts in R&D budgets.
No one expects a quick end to the crunch, because several top-selling drugs will lose US patent protection by early 2007. They include Norvasc, a blood pressure medicine from Pfizer, and Zocor and Pravachol, cholesterol drugs from Merck and Bristol-Myers Squibb. Together, those three drugs have almost $10 billion in annual US sales. — NYT
A year after Merck’s withdrawal of its arthritis medicine Vioxx led to an industry-wide credibility crisis, the Food and Drug Administration is blocking new medicines that might previously have passed muster. Doctors are writing fewer prescriptions for antidepressants and other drugs whose safety has been challenged, like hormone replacement therapies for women in menopause.
Meanwhile, insurers and some states are taking advantage of the backlash against the industry to try shifting patients to older, generic drugs, arguing that they work as well as newer and more expensive branded medicines. Overall, prescriptions continue to rise slightly, but an increasing share of prescriptions are going to generic drugs. Also, consumers seem to be less responsive to aggressive drug marketing.
“The demand has been through promotion, and for that promotion to be effective, there has to be trust,” said Richard Evans, an analyst. “That trust has been lost.”
In the background, new competitors are forcing the old-line drug giants to struggle to keep pace. Biotechnology companies like Genentech are taking the lead in finding new treatments for cancer, a promising and lucrative field.
The major drug makers remain highly profitable. But at some, including Pfizer and Merck, the largest and third-largest US companies in terms of revenue, sales are stagnant and profits are falling, leading to layoffs and-for the first time in years-cuts in R&D budgets.
No one expects a quick end to the crunch, because several top-selling drugs will lose US patent protection by early 2007. They include Norvasc, a blood pressure medicine from Pfizer, and Zocor and Pravachol, cholesterol drugs from Merck and Bristol-Myers Squibb. Together, those three drugs have almost $10 billion in annual US sales. — NYT
posted by Chris Placitella at 6:46 AM
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