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BusinessWeek Article on Novartis

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#1 LivingWellWithCML


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Posted 07 August 2011 - 07:54 AM

It's always interesting to read about TKIs from the perspective of business.  This week's BusinessWeek has an article featuring Novartis called "The Novartis Prescription To Avoid the 'Patent Cliff'".

I don't see a link to the article online yet, but here are the notable CML-related highlights for folks who are interested:

  • The company's best selling drug, Diovan, goes off patent in 13 months ($6.1B in annual sales)
  • The company's 2nd best selling drug, Gleevec, loses patents starting in 2014 ($4.27B in annual sales)
  • Novartis shares are down 14% this year, making it the third-worst performer in the Bloomberg Europe Pharmaceutical Index

Here's a snippet from the article:

'Jimenez (the company's CEO) is following a different course to retain sales of Gleevec (as compared to Diovan), which will lose protection in Japan, the U.S., and Europe by 2016.  He's ramping up sales of Tasigna, a medicine based on Gleevec which, like its cousin, is approved for use against leukemia.  Tasigna had $399M in sales last year, but the drug could bring in more than $2B in 2015, according to the average estimate of analysts surveyed by Bloomberg.  "We have time to convince physicians and the industry that patients are better off with Tasigna", Jimenez says.'

There's a graphic in the article that forecasts Gleevec revenue to cut in 1/2 around the 3rd year off-patent.  This will be an interesting development, because I'm sure that insurance carriers will push (or maybe even require!) the generic version(s) once they are available in the U.S.  Makes you wonder how many long-term Gleevec users would be comfortable making the switch from brand to generic.

One thing that the article doesn't share, but I'm interested in, are the annual costs associated with the production of Gleevec and Tasigna.  Clearly they continue to recoup costs associated with the R&D, clinical trials, etc. -- but I'd be so curious to see their margins on these TKIs.  I have to think that Novartis is charging a steep premium above and beyond what's needed to turn a profit after all of the R&D costs are paid for ... just because they know that a patient's ability to prolong her/his life is essentially 100% dependent on the drug.  With the case of Diovan, I'm sure plenty of folks are willing to take some risk with hypertension ... and the market is saturated with a bunch of hypertension drugs.


Dan - Atlanta, GA

CML CP Diagnosed March 2011

Gleevec 400mg

#2 Susan61


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Posted 07 August 2011 - 12:13 PM

Hi Dan:  All that you said is very interesting.  I just had a conversation with my Oncologist 2 weeks ago about switching to the Generic when the insurance company force people to do that.  I do not feel confident with the Generic, as I have had issues in the past with Generic Vs. Brand Name drugs.  She told me she could write Brand Name Medically Necessary on my scripts to see if they will pay or question it.

     I do believe they have made unbelievable profits on the Gleevec through the years, especially being Gleevec was the first TKI we had.

    Gleevec has done its job for me for 11 years, so why would I want to play around with a sure thing.  Thats my opinion on that.


#3 Happycat


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Posted 07 August 2011 - 04:39 PM

Hmm, well, I'd hazard to say that the profits from Gleevec are also being used in part to help pay for development and clinical trials in other therapeutic areas, and there's likely more than a few of those drugs that failed along the way.   So it's not just all cream off the top for Novartis, in other words.

I'm a chemist, and when I look at the structure of Gleevec, I can't believe it is that expensive to make.  So, yeah, I'm sure they are overcharging for it, but like I said, if it goes to help find drugs for others in life-threatening situations, then I'm okay with it.  (Mind you, I have insurance to pay for Gleevec, so I might feel differently about it if I had to pay out of pocket!  It's all relative.)

I can also completely understand the marketing tactic to get doctors to switch from prescribing Gleevec to Tasigna.  Sometimes it works, and sometimes it doesn't.

For Novartis, it's a win-win, since I don't think Tasigna is any harder to make than Gleevec.  Patients on Gleevec consume ca. 150 g per year.  Multiple that by all the patients on Gleevec, and that's a lot of drug to make on an annual basis.  Tasigna, since it is lower-dosed, can be run once in a plant and probably last 3-4x's as long as one batch of Gleevec.  Plus they get the patent-protection for many more years.

Now, the big question is whether or not the insurance companies will buy the argument and agree to pay for Tasigna (or Sprycel) as a first-line therapy once Gleevec goes generic.  They'll probably still pay for it, but may also demand a higher copay.


#4 SunNsand



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Posted 07 August 2011 - 11:19 PM

Does anyone know if other cancer type chemo drugs come in generic forms?

#5 warrior


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Posted 08 August 2011 - 10:19 AM

here is an article from yesterday's NY times adressing the issue of generic  cancer drugs:http://www.nytimes.c...ients.html?_r=1. It is a HUGH problem  and the FDA will not letus import these drugs from Europe

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