Fierce competition means that once a drug comes off patent it is to all intents and purposes finished, and its value to the pharma developer is wiped out, right? Not quite, a new analysis of EvaluatePharma reveals.
The data shine a light on 20 pharma brands with a mean age of over 66 that, rather than enjoying a well-earned retirement, are each pulling in over half a billion dollars’ worth of sales on average (see table below). It is not just Aspirin and Tylenol that are capable of such herculean efforts, and even more surprising might be just how many of these senior citizens are still growing.
If consensus sellside forecasts for 2020 revenue are to be believed, no fewer than 12 of these 20 drugs will have a positive compounded annual growth rate relative to last year’s sales. This includes Johnson & Johnson’s Tylenol, launched in 1955, and Bayer’s Aspirin – the grandfather of the pharma industry itself – first introduced an amazing 115 years ago.
The analysis looks at all drugs first launched 50 years ago or more, and groups them in order of 2014 sales. Tylenol, the mighty paracetamol brand, is out in front, having sold $1.7bn last year; it is expected to be generating $1.9bn in five years’ time, according to EvaluatePharma consensus.
|Old but going strong|
|Global sales ($m)|
|Tylenol||Johnson & Johnson||Dec 1955||1,671||1,866|
|Ritalin/Ritalin LA||Novartis||Dec 1958||492||206|
|Wobenzym||Atrium Innovations||Dec 1960||479||758|
|Strepsils||Reckitt Benckiser||Dec 1958||318||402|
|Buscopan||Boehringer Ingelheim||Dec 1951||295||402|
|Clearasil||Reckitt Benckiser||Dec 1959||292||360|
|Neurobion||Merck KGaA||Dec 1938||263||260|
|Duphaston||Abbott Laboratories||Dec 1962||249||298|
|Influvac||Abbott Laboratories||Dec 1962||214||191|
The amount of brand loyalty that is contained within Tylenol in the US is immesurable, and the same goes for Aspirin in Europe – in the face of obvious low-cost competition for these drugs, which have been available over the counter for a long time.
Remarkably, Bayer takes two other places in the top 20 – with the OTC drugs Bepanthen for infant dermatitis and the antacid Alka-Seltzer. Pfizer’s Premarin – a horse urine-derived estrogen for treating menopausal symptoms – is a less obvious blockbuster, meanwhile, yet it is expected to be selling $1.1bn in 2020.
Other surprises include Novartis’s widely genericised anti-epileptic Tegretol and stimulant Ritalin, and Abbott’s thyroid hormone therapy Synthroid (levothyroxine). According to IMS levothyroxine was the second-most widely prescribed drug in the US in 2011.
Beyond the academic interest is there a practical lesson to be drawn from the EvaluatePharma analysis?
One might be that it is normal for equity analysts valuing projects on a risk-adjusted NPV basis to end forecast sales as soon as a key patent expires; it could be argued that – for some drugs at least – this stance is excessively bearish.
That said, brands that have entered the public consciousness more recently – think Prozac, Lipitor or Viagra – have succumbed to generic competition quickly and easily. Yet it is telling that when the US Preventive Task Force yesterday recommended Aspirin to prevent cardiovascular disease and colorectal cancer it referred specifically to Aspirin, and not acetylsalicylic acid.
Perhaps this is just an example of a level of brand awareness that belongs to a different age.
This story has been amended to correct an error in the top products table.