Thursday, November 17, 2005

Drug Stabbing Time

Not a lot of people know this, or maybe don't care, but the best selling prescription drug in the world is Lipitor - a drug used to lower LDL ('bad') cholesterol in the body. However next year one of its competitors, Zocor, goes off patent - meaning that generic copies can be sold. Worse (for big pharma), a recent study, sponsored by Lipitor's makers, failed to demonstrate a substantial difference in efficacy between Lipitor and Zocor.

This has major implications for the drug industry, and the share price performance of big pharma reflects this (as do all our middle class pension funds). Governments and private healthcare insurers will be pressurising doctors to prescribe the generics over the branded drugs. So, in order to stave off a collapse in sales, the big pharmas are attempting to reposition their anti-cholesterol drugs in such a way that all patients remain on the prescribed brand names.

The first stunt being employed is to combine the statins (the name for these types of drugs) with drugs that treat hypertension (high blood pressure) into one pill. Given that high cholesterol levels and high blood pressure usually go hand in hand as part of the 'too lazy to get up off my hole and try living a healthy lifestyle syndrome' class of illnesses, there is a huge sales potential for a single treatment. Also, conveniently enough for the drug companies, these new treatments will be covered by new patents.

The second stunt to be employed is to combine drugs that lower 'bad' cholesterol with drugs that balance LDL levels with HDL (or 'good' cholesterol) levels, in order to show a demonstrable difference in efficacy. Again these new treatments will be covered by new patents and the fundamental benefit to the drug companies of these treatments is that, once prescribed them, you stay on them for the rest of your days - the ideal treatment!
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