Our annual sci-tech forecast looks at what 2010 has in store for medicine, space, aviation, the environment, technology and entertainment.
The end of patents on some of the biggest drugs means cheaper generics now but may mean fewer new drugs later
So long, Lipitor. See you later, Advair. This year marks the beginning of the so-called patent cliff, when pharmaceutical companies lose exclusive patent rights to many of their top-selling brand-name drugs. Companies could cede $140 billion in sales by 2016 as cheap generic versions move onto the market.
“The good news is that, at least in terms of the next 10 years, prescription-drug costs will probably decline or moderate for many consumers,” says Dan Carpenter, the co-director of Harvard University’s Initiative on Medications and Society. But the savings may leave tomorrow’s medicine cabinets bare. In November 2011, Pfizer will lose patent exclusivity on its cholesterol drug Lipitor, which reaped $12.4 billion in sales in 2008 and remains one of the most profitable drugs in history. And there are no new blockbuster drugs poised to take its place. The number of drugs approved annually by the U.S. Food and Drug Administration has fallen from an average of 35 approvals in 1996 through 2001, to only 22 in 2002 through 2007. Some of this decline can be traced to tighter safety regulations, partially in response to problems with Vioxx, a prescription pain reliever that received FDA approval and was then voluntarily pulled from shelves in 2004 after studies showed that up to 139,000 people taking the drug had suffered heart attacks.
Yet without that $12 billion coming from Lipitor and other brand-name pharmaceuticals, funds for the R&D of new ones could drop significantly. That would hurt us all. Research by Frank Lichtenberg, a professor of business at Columbia University, has shown that the number of new drugs available correlates with higher life expectancy. “[Drug-development choices] have long-term consequences,” says professor of strategic management Stuart Graham of the Georgia Institute of Technology. “We’re making investment decisions today about the effects of new kinds of drugs we’ll have in a decade.”
In anticipation of these changes, by 2011 drugmaker Eli Lilly aims to reduce costs by $1 billion and cut 5,500 jobs. Other companies are rushing to scoop up the few remaining promising drugs already in the pipeline; Pfizer recently finalized its purchase of Wyeth, and Roche merged with Genentech.
Ultimately, though, the end of the blockbuster-drug era may mean fundamental changes in how Big Pharma operates. Until now, thve companies have focused on developing relatively simple, profitable drugs such as statins and antidepressants. To stay profitable, companies may have to concentrate on more-complex drugs for obesity, cancer, and immunological and neurological diseases. For example, Pfizer recently announced a new drug for osteoarthritis. For the millions of people who suffer from intractable diseases, the change can’t come soon enough.
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