January 18, 2012 – 11:04
By Marc-André Miserez, swissinfo.ch
Several leading pharmaceutical medicines will be replaced by generics in a few years, due to the expiry of patents. Anticipating, the industries of the branch have started a streamlining of the workforce, to preserve very comfortable margins.
The business of the world's pharmaceutical giants should slow down a bit over the next three to four years. According to a report by the Genevan private bank Pictet, until 2013 the growth of the sector will not exceed 4%.
The main cause is the famous "patent cliff", i.e. the deadline beyond which the formula of a patented drug is no longer the monopoly of the inventor (generally after 20 years). Other industries can therefore produce generic versions at a lower price than the original which has been affected by research and development costs.
Publications on the subject abound and the figures vary slightly depending on the authors and the number of products considered. According to Pictet analysts, in total the "original" medicines whose patents will expire by 2015 represent a turnover of 150 billion dollars.
Among these, the Diovan, a drug against hypertension of the Swiss Novartis. With annual sales of six billion dollars, it is the Basel giant's most profitable tablet, far ahead of the cancer drug Glivec (4.3 billion). Diovan's patent expired in November 2011 in most European countries and will expire in the United States in September 2012. In two years, the same fate will befall Glivec.
The sales force
On January 13, Novartis announced it was cutting 1,960 US jobs as part of a $450 million savings plan. Among those set to lose their jobs this year are 1,630 sales reps, those who were trying to get doctors to prescribe Diovan, rather than a similar drug manufactured by a competitor.
"With cardiovascular disease and hypertension, we are in mass markets. If for example oncology and multiple sclerosis, you go to a small group of doctors, who scrutinize clinical studies, in the case of a drug against hypertension, it's the marketing that counts. As in consumption in general", explains Odile Rundquist, of the brokerage agency Helvea in Geneva.
