Drug prices to plummet in wave of expiring patents – including Lipitor, Plavix

By Associated Press

The cost of prescription medicines used by millions of people every day is about to plummet.

The next 14 months will bring generic versions of seven of the world's 20 best-selling drugs, including the top two: cholesterol fighter Lipitor and blood thinner Plavix.

The magnitude of this wave of expiring drugs patents is unprecedented. Between now and 2016, blockbusters with about $255 billion in global annual sales are set to go off patent, notes EvaluatePharma Ltd., a London research firm. Generic competition will decimate sales of the brand-name drugs and slash the cost to patients and companies that provide health benefits.

Top drugs getting generic competition by September 2012 are taken by millions every day: Lipitor alone is taken by about 4.3 million Americans and Plavix by 1.4 million. Generic versions of big-selling drugs for blood pressure, asthma, diabetes, depression, high triglycerides, HIV and bipolar disorder also are coming by then.

The flood of generics will continue for the next decade or so, as about 120 brand-name prescription drugs lose market exclusivity, according to prescription benefit manager Medco Health Solutions Inc.

"My estimation is at least 15 percent of the population is currently using one of the drugs whose patents will expire in 2011 or 2012," says Joel Owerbach, chief pharmacy officer for Excellus Blue Cross Blue Shield, which serves most of upstate New York.

Those patients, along with businesses and taxpayers who help pay for prescription drugs through corporate and government prescription plans, collectively will save a small fortune. That's because generic drugs typically cost 20 percent to 80 percent less than the brand names.

Doctors hope the lower prices will significantly reduce the number of people jeopardizing their health because they can't afford medicines they need.

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UnitedHealth enters drug benefits business

NEW YORK | Thu Jun 9, 2011 5:57pm EDT (Reuters) - UnitedHealth Group is pushing into managing pharmacy benefits, bucking a trend among U.S. health insurers and threatening the dominance of the three largest companies that help negotiate drug pricing.

Rivals WellPoint and Aetna have sold or outsourced prescription drug benefits. UnitedHealth -- the largest U.S. health insurer by market value -- has signaled it is moving in the other direction to seek new growth.

The company is seen as likely to take over the $11 billion drug benefits business it outsourced to No. 1 benefits manager Medco Health Solutions.

And well before that partnership expires next year, UnitedHealth's OptumRx unit is winning union and municipal contracts. It is now targeting employer accounts, including those who use its competitors' health insurance plans.

OptumRx CEO Jacqueline Kosecoff said in a recent interview the company is "very interested in the employer market and are getting very aggressive on bidding some very large accounts."

OptumRx's facilities are running at 50% capacity, giving it plenty of scope to bring the Medco business in-house, according to one analyst's estimate.

That alone would boost UnitedHealth earnings 3% in 2013, according to Sanford Bernstein analyst Ana Gupte, before profits from any other contracts the company might win.

Taking the Medco business would vault OptumRx's prescription volume by about 50% to over 500 million total annual prescriptions, according to Lazard Capital Markets. That would help close the gap with bigger players Medco, CVS Caremark and Express Scripts, giving UnitedHealth the scale to wrest greater drug discounts.

UnitedHealth Chief Executive Stephen Hemsley told an investor conference last week its business was "emerging as a preferred alternative to the three largest PBMs."

"It's an unexploited growth opportunity, given that they do have an asset that is capable of competing with the Big 3," said Brian Wright, an analyst with Citadel Securities, who covers both PBMs and health insurers.

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