“This is panic time, this is truly panic time for the [drug] industry"

Back in 2008, seeking alpha had a simple post titled 10 Pharmaceutical Stocks and Their Patent Expiration Drugs which among other things noted the impending expiry of patent protection of Pfizer's Lipitor for cholesterol control.

A story in the New York Times on March 6, 2011, titled Patent Woes Threaten Drug Firms begins with the text:

At the end of November, Pfizer stands to lose a $10-billion-a-year revenue stream when the patent on its blockbuster cholesterol drug Lipitor expires and cheaper generics begin to cut into the company’s huge sales.

This lead sentence is not exactly a news flash.

And more bad news follows: And it casts a spotlight on the problems drug companies now face: a drought of big drug breakthroughs and research discoveries; pressure from insurers and the government to hold down prices; regulatory vigilance and government investigations; and thousands of layoffs in research and development.

AND

Drug companies cut 53,000 jobs last year and 61,000 in 2009, far more than most other sectors, according to the outplacement company Challenger, Gray & Christmas.

Concerning "pressure from insurers," the article notes But 75 percent of all prescriptions in the United States are now low-price, low-profit generic drugs. but does not get into the trend wherein insurers simply won't pay for a branded drug, laying the full cost onto the insured patient, who is given a choice of paying a huge amount for the branded drug or being diverted into a low-cost generic "substitute."

And the word "invention" shows up:

Drug company executives have begun addressing the calls for reinvention.

“We have to fix our innovative core,” Pfizer’s new president, Ian C. Read, said in an interview recently. To do that, the company is refocusing on smaller niches in cancer, inflammation, neuroscience and branded generics — and slashing as much as 30 percent of its own research and development spending in the next two years as its scientists work on only the most potentially profitable prospects.

On the impact of mergers on R&D, Henry G. Grabowski, a professor of economics at Duke is quoted: “It’s never been shown that these big horizontal mergers are good for R&D productivity."

***
Related to switching, from the internet

I received a call wanting me to switch from Diovan (valsartan) to generic losartan (branded drug Cozaar). Money is the reason.

Separately,

So I went to my Dr. and he prescribed me Diovan. The Diovan is really exspensive it was a $129 dollars my insurance covered some of it but I stll would have to come out of pocket $75 dollars. Diovan is still expensive because there is no generic right now because the patent does no expire until 2012 so until then you will have to pay the high prices.

BUT, note there is a new drug in the pipeline, from BusinessWeek on 28 Feb. 2011:

Edarbi (azilsartan medoxomil) has been approved by the U.S. Food and Drug Administration to treat adults with high blood pressure (hypertension).

Clinical trials showed Edarbi was more effective in lowering high blood pressure over 24 hours than two previously FDA-approved drugs, Diovan (valsartan) and Benicar (olmesartan), the agency said in a news release.

From Reuters:

The group of Аngiotensin II receptor antagonists (ARBs) works by blocking receptors that respond to аngiotensin II, and is prescribed as a second choice in case ACE inhibitors [eg, captopril] are not well tolerated. Some of the most frequently prescribed ARB antagonists are Teveten (Eprosartan mesylate), Avapro (Irbesartan), Cozaar (Lozartan potassium), and Diovan (Valsartan). In general this group is well tolerated but continuous use may still lead to several adverse effects: cold cough, runny nose and sore throat.

UPDATE: See the post at Patent Prospector:
http://www.patenthawk.com/blog/2011/03/drugged_1.html