M A Y 2 0 0 1
`
`P R E S C R I P T I O N D R U G
`E X P E N D I T U R E S I N 2 0 0 0:
`The Upward Trend
`Continues
`
`The National Institute for Health Care Management
`
`Research and Educational Foundation
`
`A report by
`
`1225 19th Street, NW
`
`Suite 710
`
`Washington, DC 20036
`
`TEL 202.296.4426
`
`FAX 202.296.4319
`
`WEB www.nihcm.org
`
`C O N T E N T S
`
`Summary of Key Findings
`
`Introduction
`
`Methodology
`
`Findings — Sales Growth Remains Strong
`
`Findings — The “Utilization” Driver
`
`Findings — The Price Factor
`
`Findings — The Market Share Issue
`
`Credits
`
`About the NIHCM Foundation
`
`Detailed tables
`
`Notes
`
`2
`
`3
`
`5
`
`6
`
`9
`
`10
`
`12
`
`14
`
`14
`
`15
`
`23
`
`Page 1 of 24
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1637
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`

`

`N I H C M F O U N D A T I O N
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`Summary of Key Findings
`This report presents data and analysis on the retail sales and
`average price of individual prescription drugs and categories
`of drugs in 1999 and 2000. And it assesses the increase in
`prescription drug expenditures between the two years.
`
`Overall
`
`• Spending on retail outpatient prescription drugs rose 18.8%
`from 1999 to 2000, from $111.1 billion to $131.9 billion.
`(Table 1)
`
`• The bulk of the one-year spending growth was attributable
`to increased expenditures among a relatively small number
`of drugs and therapeutic categories of drugs.
`
`> About half (51.4%) of the $20.8 billion increase
`in retail drug spending in 2000 occurred among just
`eight categories of medicines — those to treat high
`cholesterol, arthritis, chronic pain, depression, ulcers
`and other stomach ailments, high blood pressure,
`diabetes, and a predisposition to seizures. (Table 1)
`
`> Increases in the sales of just 23 individual drugs
`were responsible for half (50.7%) of the $20.8 billion
`rise in prescription drug spending from 1999 to 2000.
`Leading the list were: Vioxx, Lipitor, Prevacid, Celebrex,
`Avandia, Actos, and OxyContin. (Table 4)
`
`> Among the 50 drugs contributing most to the one-
`year increase in spending, sales rose 40.2%. Sales of
`all other drugs increased 7.9%. (Table 4)
`
`> The number of prescriptions dispensed for the 50
`drugs contributing most to the one-year increase in
`overall spending rose 30%. The number of prescriptions
`for all other drugs rose 2%. (Table 4, Figure 1)
`
`> Among the top 50 drugs contributing most to the
`one-year increase in spending from 1999 to 2000, the
`average price of a prescription was $75.88. The
`average price for all other drugs in 2000 was $35.72.
`(Table 4, Figure 1)
`
`> Nineteen drugs had retail sales over $1 billion in
`2000, up from 15 drugs in 1999. (Table 3)
`
`• An increase in the number of prescriptions overall
`and a shift towards the use of costlier drugs continued in
`2000 to be the central forces driving up retail prescription
`drug spending.
`
`> About 42% of the $20.8 billion increase in retail
`prescription drug spending from 1999 to 2000 was
`
`FIGURE 1
`Summary of Findings
`
`1999
`
`Percent
`2000 Change
`
`ALL DRUGS
`
`Total Sales (billions)
`Total Prescriptions (millions)
`Average Price per Prescription
`
`$111.1
`2,712.4
`$40.96
`
`$132.0
`2,915.2
`$45.27
`
`18.8%
`7.5%
`10.5%
`
`50 BEST SELLING DRUGS
`(RANKED BY 2000 SALES)
`
`Total Sales (billions)
`Total Prescriptions (millions)
`Average Price per Prescription
`
`$44.9
`730.6
`$61.41
`
`$58.2
`866.6
`$67.15
`
`29.7%
`18.6%
`9.4%
`
`REST OF MARKET
`(RANKED BY 2000 SALES)
`
`Total Sales (billions)
`Total Prescriptions (millions)
`Average Price per Prescription
`
`$66.2
`1,981.9
`$33.42
`
`$73.8
`2,048.6
`$36.01
`
`11.4%
`3.4%
`7.7%
`
`50 DRUGS CONTRIBUTING MOST TO SALES
`GROWTH, 1999–2000
`(RANKED BY CONTRIBUTION TO SALES GROWTH, 1999–2000)
`
`Total Sales (billions)
`Total Prescriptions (millions)
`Average Price per Prescription
`
`$37.5
`533.5
`$70.32
`
`$52.6
`693.1
`$75.88
`
`40.2%
`29.9%
`7.9%
`
`REST OF MARKET
`(RANKED BY CONTRIBUTION TO SALES GROWTH, 1999–2000)
`
`Total Sales (billions)
`Total Prescriptions (millions)
`Average Price per Prescription
`
`$73.6
`2,178.9
`$33.77
`
`$79.4
`2,222.2
`$35.72
`
`7.9%
`2.0%
`5.8%
`
`NOTE: Data from Tables 3 and 4
`
`attributable to an increase in the number of pre-
`scriptions dispensed.
`
`> About 36% of the $20.8 billion increase in spending
`was caused by the shift in the mix of drugs dispensed —
`from lower-priced drugs to higher-priced medicines,
`many of which were approved in the last five years.
`
`> About 22% of the $20.8 billion increase was caused
`by the one-year increase in the price of individual drugs.
`
`• 2.9 billion prescriptions were dispensed in the retail market
`in 2000, up from 2.7 billion in 1999. That translates to an
`average 10.4 prescriptions per person in 2000, up from 9.9
`in 1999. (Figures 1 and 5)
`
`Page 2 of 24
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`• Total prescriptions dispensed for the top 50 best-selling
`medicines rose 18.6%, to 866 million from 730 million.
`The number of prescriptions for all other drugs rose 3.4%.
`(Table 3, Figure 1)
`
`Price
`
`• Among the top 50 best-selling medicines, the average
`price for a prescription in 2000 was $67.15, up 9.4% from
`$61.41 in 1999. The average price of all other drugs in 2000
`was $36.01 per prescription. (Table 3, Figures 1 and 2)
`
`Market Share
`
`• In the 30 best-selling categories of drugs combined, the
`best-selling single drug had an average 31.7% percent of the
`market in terms of sales. The top two selling drugs had a
`cumulative average 51% of the market; the top three had
`62.3% and the top four a cumulative average 68% share of
`the market. (Table 5, Figure 8)
`
`• $86.2 billion worth of prescription drugs (65% of total retail
`sales) were sold in therapeutic categories where the top four
`drugs had a 50% or greater share of the market.
`
`Introduction
`Spending on prescription drugs has escalated sharply in
`recent years and increased more than 12% a year in seven
`of the last 13 years. The growth in expenditures has also
`become increasingly concentrated among a relatively
`small number of drugs and categories of drugs.1 Although
`expenditures for prescription drugs are still a relatively small
`portion of overall health care spending (around 9% in 2000),
`the rise in drug spending in the last few years has contributed
`disproportionately to an upturn in health care costs and health
`insurance premiums. It is also partly responsible for steeply
`rising Medicaid costs and health care spending by other
`government entities such as the Department of Defense and
`the Department of Veterans Affairs.
`In 1999, the increase in spending on prescription drugs
`accounted for 44% of the increase in overall health care
`expenditures. By comparison, spending for physician and
`hospital services accounted for 32% and 21%, respectively,
`of the 1999 health spending increase, even though they make
`up larger shares of total spending on health care.2 Other
`researchers have estimated that the increase in prescription
`drug spending in 1999 was responsible for one-third of the
`rise in the cost of employer-based health insurance.3 Health
`insurance premiums rose an average 8% in 2000. They are
`
`• The average retail price for a prescription in 2000 was
`$45.27, up 10.5% from $40.96 in 1999. (Table 1, Figure 1)
`
`Sales
`
`• The top 50 best-selling prescription drugs (of 9,911 overall)
`were responsible for 44% ($58.2 billion) of all retail drug
`spending in 2000. (Table 3, Figures 1 and 2)
`
`• Aggregate sales of the top 50 best-selling prescription drugs
`rose 29.7% in 2000, compared to 11.4% for all other drugs
`combined. (Table 3, Figure 1)
`
`• Of the 50 best-selling drugs in 2000, four were generic
`drugs with combined sales of $2.7 billion, 2% of all retail
`sales in 2000. (Table 3)
`
`• Antidepressants remained the top-selling category of pre-
`scription drugs in 2000, with $10.4 billion in retail sales, up
`21% from 1999. (Table 1)
`
`• The anti-ulcer drug Prilosec remained the top-selling
`prescription medicine in the U.S., with sales of $4.1 billion,
`up 12.4% from 1999. The second best-selling drug was
`Lipitor, to treat high cholesterol, with retail sales of $3.7 billion,
`up 38.8%. (Table 3)
`
`Number of Prescriptions
`
`• The top 50 best-selling drugs accounted for 30% of all
`prescriptions dispensed in 2000. (Figure 1)
`
`FIGURE 2
`Comparison of 50 Best-Selling
`Drugs to All Other Drugs, 2000
`
`$67.15
`
`$36.01
`
`$100
`
`$75
`
`$50
`
`$25
`
`0
`
`DOLLARS
`
`$73.8
`
`$58.2
`
`$100
`
`$75
`
`$50
`
`$25
`
`0
`
`BILLIONS OF DOLLARS
`
`TOP 50
`SALES
`
`REST OF
`MARKET
`SALES
`
`NOTE: Data from Table 3
`
`REST OF
`TOP 50
`AVERAGE MARKET
`PRICE
`AVERAGE
`PRICE
`
`Page 3 of 24
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`Medicaid spending
`
`of HMOs had a so-called “three-tier” co-payment structure
`for prescription drugs in the fall 2000, up from 55% at
`the end of 1998. An estimated 40% of HMO enrollees, or
`32 million Americans, were in such three-tier plans by fall
`2000, up from 10% or 7.6 million Americans in 1998.12
`In a typical three-tier co-pay arrangement, enrollees pay
`$5 or $10 for a generic drug, $10 to $20 for a preferred
`brand name drug on a list,
`or formulary, and $20 to
`$35 (or more) for a non-
`preferred brand drug.
`Employers were also
`adopting three-tier plans
`in their other, non-HMO
`insurance health plan
`offerings in 2000. One
`recent survey projects
`that by the end of 2002
`three-tier co-pays will
`cover 60% of all Americans
`with private employer-
`sponsored health insur-
`ance.13 (No studies have
`yet assessed the increase
`in employee out-of-pocket
`costs associated with
`three-tier co-pay plans.)
`Some employers and health insurers are also consid-
`ering adopting prescription drug plans that would have
`workers pay a larger portion of the costs for so-called
`“life-style” drugs.
`Some consumers are more price-sensitive because
`they pay 100% of the cost for their medicines. Most vulner-
`able are people without health insurance at all (about 42
`million Americans) and those without any prescription drug
`coverage (another estimated 23 million people, including
`11.5 million who are age 65 and over).14 If they get sick or
`are diagnosed with a chronic ailment, the pharmacy bill can
`quickly eat up a sizable portion of income. This is especially
`the case for low-income elderly people who live on their Social
`Security checks.
`Almost 30% of Medicare beneficiaries lack any pre-
`scription drug coverage. This group spent an average
`$546 out of their own pockets in 1998 compared with
`$325 for seniors with drug coverage from private sources
`or Medicaid.15 More to the point, about 21% of all Medicare
`beneficiaries (eight million) spent in excess of $1,000 on
`drugs in 1996. Of this group, about 2.5 million had no drug
`coverage and paid out of pocket. The highest spending 20%
`of this group spent an average 17% of their annual incomes
`on prescription drugs.16
`
`on prescription
`
`drugs tripled
`
`between 1990
`
`and 1999 —
`
`from $4.8 billion
`
`to $17 billion.
`
`projected to increase between 10% and 13% in 2001, again
`driven substantially by prescription drug costs.4
`Some 25 states in early 2001 reported that Medicaid
`costs will exceed budgeted amounts for fiscal year 2002,
`after several years of moderate growth. The shift is attributed
`in part to rising prescription drug expenditures.5 Medicaid
`spending on prescription drugs more than tripled between
`1990 and 1999 — from $4.8 billion (6.6% of total Medicaid
`costs) in 1990 to $17 billion (9.4% of total Medicaid costs) in
`1999.6 Medicaid spending on drugs increased 14.8% in 1998
`and 17.2% in 1999, on par with private sector growth.7 States
`predict that overall Medicaid spending will rise between 8%
`and 12% in both 2001 and 2002, led by annual prescription
`drug cost increases in the 13% to 20% per year range.8
`Some state Medicaid programs have been hit particularly
`hard. For example, outpatient prescription drugs accounted
`for 8% of Florida’s Medicaid costs in 1995. In 1999 they
`accounted for 15.7% of Medicaid spending in the state. And
`in 2002 drugs are projected to account for 19% of total
`Medicaid spending in Florida. Similarly, in Mississippi, the share
`of Medicaid spending attributable to prescription drugs rose
`from 11.5% in 1996 to 14.8% in 1999. In New York,
`prescription drugs represented 7.3% of Medicaid costs in
`1999, up from 4.4% in 1996.9
`Rising drug costs are also having a major impact in
`the Federal Employee Health Benefits Program (FEHBP).
`FEHBP covers nine million federal employees, retirees and
`their families. The Office of Personnel Management (OPM),
`which operates FEHBP, reported a 2001 average premium
`increase of 10.5%. That came on top of average premium
`hikes of 9.3% in 2000, 9.5% in 1999 and 7.2% in 1998.
`OPM reported in late 2000 that 4.2 percentage points (40%)
`of the 10.5% premium increase in 2001 is due to rising
`pharmacy costs.10
`Most Americans experience the escalating cost of
`prescription drugs indirectly, primarily through higher
`insurance premiums. Their health insurance typically covers
`the vast majority of the cost of outpatient drugs. In fact,
`insured persons today are paying a much smaller percentage
`of drug costs out-of-pocket than they did just 10 years ago
`(27.5% in 1998 versus 48.3% in 1990),11 despite the recent
`rise in drug costs. That is part of the reason drug spending
`has been going up. Protected from all but a $5, $10 or $15
`flat co-payment per prescription, consumers have not been
`“price-sensitive” to the drugs they buy. And they tend to want
`the latest drugs, which are typically more expensive.
`Pressured by rising costs, however, employers, private
`health insurers and managed care plans are shifting more
`of the cost for prescription drugs to employees and enrollees
`by asking them to pay higher co-payments when they fill
`prescriptions for brand name (non-generic) drugs. Some 86%
`
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`Seniors who have drug coverage through private
`“Medigap” policies are affected as well. Premiums for
`Medigap policies that cover prescription drugs rose an
`average 37% between 1998 and 2000 and are expected
`to climb 10% to 30% in 2001, due largely to the increase in
`prescription drug costs.17 About 3.7 million seniors have
`Medigap policies that cover prescription drugs.
`Those without coverage often pay the highest price for
`drugs, since they lack any bargaining clout to gain discounts.
`Uninsured non-elderly persons in 1997 spent an average of
`$30.76 for a prescription compared to an average $9.96
`for an insured person buying a brand name drug. Insured
`people spent an average $5.53 for a generic drug.18
`As a result of this price difference, people with health
`insurance fill more prescriptions and take more medicines.
`And studies show that those who lack coverage too often
`go without needed drugs. For example, in 1996, 42% of
`uninsured adults with high blood pressure who had been
`told they needed a medicine said they were not taking one.
`By comparison, 25% of insured adults with high blood
`pressure were not taking a needed medicine. Likewise, 43%
`of uninsured adults diagnosed with elevated cholesterol and
`told to take a medicine said they were not taking one. The
`percentage was 29% for insured adults.19
`The upward trend in pharmaceutical expenditures is
`forecast to continue. Recent studies predict increases in over-
`all spending for outpatient prescription drugs of between
`12% and 23% per year through 2004, with an average
`increase over the 2001–2004 period of 15% per year.20
`Government researchers recently forecast that from 2001
`to 2010 prescription drug spending would increase an
`average 12.6% per year, reaching $366 billion in 2010
`(14% of total projected health care spending in that year).21
`This forecast could be low if Congress adds a prescription
`drug benefit to the Medicare program in the next year or two.
`Such a program, subsidizing the purchase of drugs by seniors,
`would increase the demand for and use of prescription drugs
`among Medicare beneficiaries.
`Our findings update recent research documenting the trend
`in pharmaceutical spending in the U.S. They add to a growing
`body of evidence showing that an escalation in the volume of
`prescriptions being dispensed and a shift to the use of newer
`drugs that are typically more costly are the principal forces
`behind the recent increase in prescription drug expenditures.
`
`Methodology
`This study is based on data from Scott-Levin, a health care
`market research firm. Its annual Source Prescription Audit
`(SPA) projects, through a sampling methodology involv-
`ing close to 40,000 stores, all outpatient prescriptions
`
`The pharmaceutical marketplace
`is complex. There are many ways to measure the
`sales of prescription drugs and the number of prescrip-
`
`tions dispensed. The Scott-Levin data used in this study
`
`yield sales figures for 1999 and 2000 that are higher than
`
`recent projections from the federal government but lower
`
`than those of IMS Health, another large pharmaceutical
`
`market research firm.
`
`Federal government researchers use retail sales
`
`information collected once every five years by the U.S.
`
`Bureau of the Census. Their estimates of future drug
`
`expenditures use the growth rate in recent IMS Health data
`
`adjusted for manufacturer rebates paid to some insurers
`
`that reduces the effective price paid for some drugs.22
`
`IMS Health data includes mail order sales and sales to
`
`long term care facilities such as nursing homes. Scott-
`
`Levin data does not. Differences in the two databases are
`
`also due to variations in sampling techniques.23
`
`Figure 3 presents the three determinations of the growth
`
`in prescription drug spending from 1999 to 2000. The
`
`differences are explained by variations in data gathering,
`
`sampling and projection methods.
`
`FIGURE 3
`Drug Spending as Measured
`by Different Groups
`(BILLIONS OF DOLLARS)
`
`1999
`
`Percent
`2000 Change
`
`HCFA a
`NIHCM/AIR/Scott-Levin b
`IMS Health c
`
`$99.6
`$111.1
`$126.3
`
`$116.9
`$131.9
`$145.1
`
`17.4%
`18.8%
`14.9%
`
`SOURCES:
`a. Health Care Financing Administration (Health Affairs, March–April 2001);
`2000 projected
`b. NIHCM/American Institutes for Research analysis of Scott-Levin Prescription Drug
`Audit (April 2001)
`c. IMS Health, Westport, CT (February 2001)
`
`Page 5 of 24
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`dispensed by retail pharmacy outlets in the United States.
`About 65% of outpatient prescription drug sales occur at
`the retail level. The outlets include chain and independent
`drug stores, pharmacies at food stores, discount stores,
`and mass merchandisers. The SPA does not include sales
`of prescription drugs by mail order or through nursing homes,
`hospitals, HMOs, or other health facilities. It also does not
`include sales of certain genetically-engineered drugs that
`are administered primarily in clinical settings.
`The Scott-Levin data are not adjusted for discounts or
`rebates for specific individual drugs. But they include
`discounts given by manufacturers to buyers at the wholesale
`and retail levels.
` The prices reported in this study include both the insurer’s
`and the consumer’s costs combined. In addition, the price
`data for individual drugs computed in this study are not
`adjusted for dosage level (5 vs. 10 milligram, for example) or
`prescription size (a 90 day supply vs. a 30 day supply). Our
`data reflect prescriptions dispensed by pharmacies, not those
`written by doctors or taken by consumers.
`The average price per prescription of individual drugs is
`calculated as the total sales of the drug divided by the total
`number of prescriptions dispensed. As such, this price is not
`an actual price paid by any specific buyer — for example, the
`federal government, a state Medicaid program, a pharmacy
`benefit manager (PBM) or an individual consumer. Such prices
`vary in reality. Some bulk buyers of prescription drugs in the
`U.S. get discounts and rebates that take 15% to 50% off the
`average wholesale price of drugs.
`Importantly then, because of the way it is calculated, the
`increase we report in the overall average price for all drugs
`from 1999 to 2000 (See “Findings — The Price Factor”) is
`made up of two components — (1) a “pure” price increase,
`reflecting the one-year increase in the average price of drugs,
`and (2) a shift in the mix of drugs dispensed towards more
`costly (and mostly newer) drugs.
`Questions have been raised in recent years about the
`“value” of some new and costly medicines — (1) their clinical
`value in curing or preventing illness, easing pain or in alleviating
`symptoms better than older medicines and (2) their value
`relative to the price paid compared to other modes of drug
`and non-drug treatment. This study does not address those
`issues. It does not make judgements about the clinical
`importance of any individual drug or class of drug. Neither
`does it make any judgement about the effects of escalating
`drug spending on the quality of health care or health of the
`American people. Such questions are tremendously important
`but beyond the scope of this study.
`
`Findings —
`Sales Growth Remains Strong
`Spending on outpatient prescription drugs in the U.S.
`continued to grow rapidly in 2000.
`Our analysis shows that Americans spent $131.9 billion
`on prescription drugs sold through retail outlets in the
`year 2000, up from $111.1 billion in 1999 — an 18.8%
`($20.8 billion) increase. (Table 1) The rise comes on top of
`a 19%, $17.7 billion increase in retail prescription drug
`spending from 1998 to 1999.
`The bulk of the spending increase in 2000 was attribut-
`able to higher expenditures among a relatively small number
`of drugs and therapeutic categories of drugs. Just over half
`(51.4%) of the one-year increase in spending occurred
`in eight categories of medicines — those to treat high choles-
`terol, arthritis, chronic pain, depression, allergies, ulcers and
`other stomach ailments, diabetes, and a predisposition to
`seizures. (Table 2) These classes of drugs collectively made
`up 38% of all drugs sales in 2000. (Table 2)
`Likewise, increases in the sales of just 23 individual drugs
`(of 9,911 on the market) accounted for half (50.7%) of the
`$20.8 billion increase in 2000 in retail pharmaceutical
`spending. (Table 4) These are the medicines contributing
`most to the one-year rise in pharmaceutical spending. We
`also examined aggregate sales of the 50 best-selling drugs
`in 2000. (Table 3) Sales of these drugs rose an aggregate
`29.7% in one year, compared to 11.4% for all other drugs
`combined. The increase in the volume of prescriptions for
`the 50 best sellers also dramatically outstripped the increase
`for all other drugs. (Table 3 and Figure 6) These, in short,
`are the medicines that are finding the most marketplace
`acceptance and generating the most revenue for their
`makers. They are also causing much of the recent escalation
`in prescription drug spending.
`Several of the individual drugs contributing most to the
`one-year increase in spending are “new” drugs (that is, newly-
`approved; some may be new formulations of older drugs or
`variations of existing drugs.) This underscores the potential
`in today’s pharmaceutical marketplace of new hot selling drugs
`to add significantly — even in a one-year period — to overall
`pharmaceutical spending.
`Leading the pack in sales growth in 2000 was Vioxx
`(Merck), a new drug to treat the pain and symptoms of
`osteoarthritis and arthritis. Vioxx was first marketed in mid-
`1999. U.S. retail sales of Vioxx more than quadrupled from
`$329.5 million in 1999 to $1.5 billion in 2000. Vioxx alone
`was responsible for 5.7% of the 2000 increase in spending
`— a non-trivial amount. (Table 4) In 1999, Vioxx’s main rival,
`Celebrex (G.D. Searle), had the spotlight. Also first marketed
`
`Page 6 of 24
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`FIGURE 4
`Comparison of 50 Best-Selling Drugs to All Other Drugs
`and Total Market
`(PERCENT CHANGE IN KEY INDICATORS)
`
`18.8%
`
`18.6%
`
`11.4%
`
`7.5%
`
`9.4%
`
`7.7%
`
`10.5%
`
`3.4%
`
`29.7%
`
`30
`
`25
`
`20
`
`15
`
`10
`
`5 0
`
`PERCENT
`
`TOP 50
`
`REST OF
`MARKET
`
`TOTAL
`MARKET
`
`TOP 50
`
`REST OF
`MARKET
`
`TOTAL
`MARKET
`
`TOP 50
`
`REST OF
`MARKET
`
`TOTAL
`MARKET
`
`CHANGE IN SALES
`
`CHANGE IN UTILIZATION
`
`CHANGE IN AVERAGE PRICE
`
`NOTE: Data from Table 3
`
`in 1999 (a few months earlier than Vioxx), its sales ballooned
`from almost nothing to $1.3 billion in one year.
`As a class of drugs, retail sales of medicines to treat the
`pain and inflammation of arthritis grew 39.3% in 2000, from
`$7.9 billion to $9.4 billion. In 2000, Celebrex remained the
`best-selling drug in this class. Its retail sales climbed 58%, to
`$2 billion. Sales of the third top seller in this category, Enbrel
`(American Home Products/Immunex) jumped 84.4% (to
`$500.4 million) despite the fact that the injectable drug’s
`average price was $998 per use.
`Vioxx and Celebrex sales may get a boost in 2001 from
`recent research confirming the drugs cause fewer ulcers in
`the gastrointestinal tract than other drugs for osteoarthritis
`and joint inflammation. However, that momentum could be
`attenuated by results from the same studies which indicate
`Vioxx and Celebrex are no more effective at reducing the
`inflammation and pain of arthritis than appropriate doses of
`other anti-inflammatory painkillers.24
`The cholesterol drug Lipitor (Pfizer) was the second largest
`contributor to the overall rise in drug spending between 1999
`and 2000. First marketed in March 1997, retail sales of Lipitor
`rose 39%, from $2.7 billion in 1999 to $3.7 billion 2000. It
`was the second big year for Lipitor, which is also now the
`second best-selling drug in the nation after Prilosec. Lipitor
`sales rose 56% in 1999.
`
`Led by Lipitor, Zocor (Merck) and Pravachol (Bristol Myers
`Squibb), cholesterol-lowering drugs accounted for 8.5% of
`the rise in prescription drug spending in 2000. Overall sales
`of all cholesterol drugs rose 21%, from $6.5 billion to $8.2
`billion.25 (Table 1)
`Antidepressants remained the best-selling category
`of prescription medicine in 2000. Retail sales of anti-
`depressants reached $10.4 billion, up 20.9%. The
`antidepressant market has grown five-fold since 1993
`when sales stood at about $2 billion. Prozac (Eli Lilly)
`remained the top-selling antidepressant in 2000, with retail
`sales of $2.6 billion, up 5% over 1999 sales. But Prozac’s
`market share eroded (from 28% to 24.6%) at the expense
`of surging sales of Zoloft (Pfizer), up 14.2%, Paxil (SmithKline
`Beecham), up 24.5%, Wellbutrin Sr (GlaxoSmithKline), up
`36.8%, and newcomer Celexa (Forest Labs), up 106%.
`Antidepressant leader Prozac is due to go off patent and
`lose its market exclusivity in August 2001. Its maker, Eli Lilly,
`is no longer heavily promoting Prozac, whose brand name
`is widely known. However, Lilly won approval in February to
`market a once-weekly version of the drug. This new version
`has its own patent (based on its coating). Lilly is expected to
`promote the new drug aggressively in 2001. In addition, Lilly
`now separately markets Prozac as Serafem to treat the mood
`imbalances associated with premenstrual syndrome (PMS).
`
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`The FDA approved this use in 2000. Lilly has the sole right
`for seven years to market Serafem/Prozac to treat PMS.
`Sarafem had $8 million in retail sales in 2000.
`Prozac is not the only antidepressant whose maker is
`seeking to expand the reach of its drug. Wellbutrin, with retail
`sales of $851 million in 2000, is now being marketed under
`the brand name Zyban to help smokers quit. Paxil, with
`sales of $1.8 billion in 2000, has been approved (in 1999)
`and is being promoted to consumers in ads as a treatment
`for panic or social anxiety disorder. And Zoloft, with 2000
`sales of $1.9 billion, is being marketed as the “first and only”
`FDA-approved treatment for Post-Traumatic Stress Disorder.
`Drug industry analysts expect such marketing strategies to
`expand sales of these products in coming years. Prescrip-
`tions for antidepressants are climbing amid ongoing debate
`about their effectiveness, side effects and proper use.26
`Second to antidepressants in overall sales were drugs
`to treat ulcers and other symptoms of gastrointestinal
`distress, such as gastro-esophageal reflux disease. Retail
`sales of these medicines reached $9.5 billion in 2000, up
`20% from 1999. These drugs include Prilosec, the nation’s
`top-selling prescription medicine. Retail sales of Prilosec
`(AstraZeneca) reached $4.1 billion in 2000, up 12.4%, even
`as the drug heads to a scheduled patent expiration later this
`year. (The drug was originally approved in 1989.) Prilosec’s
`main competitor, Prevacid, saw sales climb 38% to $2.8
`billion. AstraZeneca is now promoting a new antiulcerant called
`Nexium, approved by the FDA in February 2001.
`Notably, the third best-selling drug in the antiulcerant
`category was Ranitidine Hcl, a generic drug, with 2000 sales
`of $691 million. Ranitidine costs an average $43.73 per
`prescription in 2000 compared to $138.57 for Prilosec and
`$125.98 for Prevacid. Its sales were up 9.5%. (Table 5)
`Also registering strong sales growth in 2000 were narcotic
`painkillers, and drugs to treat diabetes, osteoporosis, asthma
`and heart disease.
`The narcotic painkillers have recently garnered wide media
`and public attention because of concerns over inappropriate
`prescriptions and abuse.27 Sales of these drugs, used to treat
`many forms of acute and chronic pain, rose 32% in 2000, to
`$4.4 billion. A major surge in the sales of the top-selling drug
`in this category, OxyContin (Purdue Pharma), propelled the
`growth in this category. Retail sales of OxyContin rose 90.2%
`in 2000, to $1 billion from $553.6 million in 1999.
`The second biggest seller in the narcotic painkiller category
`is Hydrocodone/Apap, a generic drug. Sales of the drug rose
`27.5%, to $935 million in 2000. Hydrocodone/Apap costs
`an average $13.56 per prescription compared to OxyContin
`at $189.01 per prescription. That puts the generic ahead in
`the number of prescriptions in this category — 6.9 million
`versus 5.6 million for OxyContin.
`
`of prescription
`
`drug in 2000,
`
`with $10.4 billion
`
`in sales.
`
`Antidepressants
`
`were the best
`
`selling category
`
`The market for oral diabetes drugs continued the strong
`growth of recent years. Sales of these drugs increased
`33.6%, to $4.1 billion, led by Glucophage (Bristol Myers
`Squibb). Glucophage sales climbed 40.7% to $1.6 billion.
`That came on top of a 49% sales increase for Glucophage
`in 1999. The drug benefited from the removal of rival
`Rezulin from the market in March 2000 because of toxicity
`problems. Glucophage’s patent and market exclusivity is
`due to expire this year. Bristol Myers Squibb is heavily
`promoting a successor drug, Glucovance, even as it markets
`a new once-a-day form of
`Glucophage. Meanwhile,
`two new competitors in
`the diabetes market
`came on strong. Avandia
`(SmithKlineBeecham)
`sales increased five-fold
`from $102.7 million in
`1999 to $617.6 million
`in 2000. And Actos
`(Takeda Pharmaceuti-
`cals) sales shot up from
`$36.2 million in 1999
`to $550.7 million in
`2000. Both drugs were
`approved and first mar-
`keted in 1999.
`Medicines for people
`with osteoporosis and
`weakening bones also
`showed hardy sales growth. Sales of the drugs in this class
`were up 36% in 2000. The increase was driven by rising
`sales of two drugs — Fosamax (Merck) and Evista (Eli Lilly).
`Fosamax sales rose 27.6% to $704 million while Evista sales
`were up 57.3% to $399 million. Both drugs help preserve
`bone mass though by different mechanisms. Fosamax was
`first marketed in 1995 and Evista in 1997. Osteoporosis
`affects an estimated 28 million Americans, 80% of whom
`are women age 50 and over. Rising sales of the drugs are
`tied, in part, to increasing use of bone density tests to identify
`people with osteoporosis.
`Sales of medicines for asthma continued to move upward
`in 2000. There are several classes of drugs in this category.
`The two biggest are the inhaled respiratory steroids and a
`relatively new class of drugs called leukotriene receptor
`antagonists. Both types of medicines help suppress the
`inflammation of air passages that make breathing difficult for
`asthmatics. Both classes of drugs must be taken regularly
`and are not for acute asthma attacks. Sales of all respiratory
`steroids rose about 18% in 2000, to $2.8 billion. The leading
`drug in this category, Flovent (GlaxoSmithKline), first marketed
`
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`in 1996, had retail sales of $648 million in 2000, up 67%.
`That follows a rise in Flovent sales of 61.2% in 1999.
`The bigger action in asthma