NEW JERSEY, December 9, 2001: Why generics are going to continue to make headlines in 2002.

Andrx. Barr. Endo. King. Mylan. Teva. They're the best known generics companies, and they are a driving force behind a changing pharmaceutical marketing landscape. Because as Rx patents expire on blockbuster brands, the generics marketers are waiting with bioequivalent versions of these brands to take into the market at ostensibly cheaper prices. And there goes blockbuster market share.

Some generics companies don't even wait - they take their patent challenges to court before the brands go off patent. And in the process, they're causing dramatic changes in the way pharaceuticals are marketed.

Take Barr. According to CommentWire, "Barr has a well-established strategy of aggressive early patent challenges, resulting in earlier than anticipated generic entry, exclusive marketing agreements or out-of-court settlements."1

Featuring a portfolio of brands in oncology, female healthcare, cardiovascular, anti-infectives, pain management and psychotherapeutics, Barr won the rights to market a generic version of Lilly's Prozac. And Barr is setting the standard in generic drug marketing.

Recently, Barr received an approval for a generic version of Lo Ovral and a tentative approval for Mircette, two brands of oral contaceptives. Add to that a branded OC of their own, Seasonale, and this David and Goliath company is quickly building a female healthcare franchise.

It's no secret that there are several blockbusters in several therapeutic categories facing threats from generic companies. Generic versions of BuSpar, Glucophage, and most recently Prilosec have been the subject of news reports and court battles.

In the ongoing Prilosec case, between UK drug giant AstraZeneca and Florida-based Andrx, the word is that the generic company may have a tough road ahead. A former researcher for the company testified in court that the Andrx version of Prilosec was "technically equivalent" to the formula and manufacturing process used in the development of AstraZeneca's Prilosec brand. 2

The impact of generic marketing is felt throughout the healthcare system. Several recent lawsuits were brought against pharmaceutical companies for allegedly conspiring to keep generic versions of their blockbuster drugs off the market. Consumer groups like Public Citizen and senior citizen political organizations were extremely vocal in their outrage against these tactics.

And generics are having an impact on the managed care industry. In a sensational story out of Pennsylvania, one HMO is actually going to reward physicians who write generic drugs. According to a Yahoo Finance article: "Starting in March, Keystone Health Plan East plans to begin offering incentive payments to medical practices that use less-costly generic drugs."3

What does the FDA have to say about generics? Plenty -- in court. Forbes.com recently reported that the FDA is standing firm against drug companies who try to block generics from getting on the market with legal tactics and maneuvering: "It is important that the FDA does not prevent cheaper generic drugs from getting to market. Drug giants get long periods of exclusivity on their drugs, during which they can set very high prices. A generic company, by contrast, may get a 180-day period as the only maker of a copycat, but then it is sure tosee its profit margins evaporate even more as other generic companies come in and commodify them out of existence." 4

In the year 2002, look for generics companies to continue to take on the big Rx companies in court. But unless they follow the aggressive model begun by Barr, generics companies will have to continue to pick up the crumbs of the big brands that go off patent. Meanwhile, the big Rx companies will continue to do all the legwork, innovation, research, and yes -- take all the risk -- while doing everything it can to protect itself from generic copycats. Also, look for more legislation, more involvement from HMOs and more activism from patient and consumer groups. It's going to be another interseting year for generics...stay tuned.

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