A few interesting tidbits based on the latest estimates:
- 2013 generic launches will be only one-quarter as big as the 2012 generic monster.
- Generic launches will rebound and remain high throughout 2014-2016.
- From 2012 to 2016, just 10 blockbusters will account for half of total brand-name revenues lost.
- The generic cliff is now projected to be steeper, with an 84% drop in 2017.
Back in the day, Medco Health Solutions used to publish a detailed list of brand-name drugs that will be facing generic competition. Express Scripts is continuing this helpful tradition with its recently updated, 11-page list: Estimated Dates of Possible First Time Generic/ Rx-to-OTC Market Entry.
The list identifies 192 brand-name drugs, the generic name, common uses, 2011 retail sales, and the best-guess expected date of generic competition or (more rarely) an Rx-to-OTC switch.
Express Scripts assigns 100% of a brand-name drug’s sales to the quarter when the generic launches. (For simplicity of presentation, I did not show quarterly estimates.) The revenue estimates are based on 2011 U.S. retail sales and are not adjusted for price inflation. To create the chart below, I added the older Medco data from 2011 to mid-2012.
The chart below illustrates the pace and entry of generic drugs projected by Express Scripts, as of June 2012.
From 2011 to 2021, brand-name drugs with $105.2 billion in sales will face generic competition. By 2016, the generic dispensing rate (GDR)—the percentage of prescriptions dispensed with a generic drug instead of a branded drug—could reach 88%.
Pharmacy Profits from Authorized Generics.
Big question: Will this historical profit pattern continue during the generic wave, given: preferred networks; a retail pharmacy price war; aggressive MAC'ing by payers; Average Acquisition Cost (AAC); and retail-at-mail pricing? Hang loose, dude.
P.S. Your eyes did not deceive you. Pictured above is Buddy, the world famous surfing dog from Ventura, CA. (Of course!) As far as I know, Buddy is not licensed to prescribe or dispense pharmaceuticals...yet.