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Drug Firms Face Billions In Losses In ’11 As Patents End

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http://www.nytimes.com/2011/03/07/business/07drug.html?_r=1&ref=business

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.

The loss poses a daunting challenge for Pfizer, one shared by nearly every major pharmaceutical company. This year alone, because of patent expirations, the drug industry will lose control over more than 10 megamedicines whose combined annual sales have neared $50 billion.

This is a sobering reversal for an industry that just a few years ago was the world’s most profitable business sector but is now under pressure to reinvent itself and shed its dependence on blockbuster drugs. 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.

Morgan Stanley recently downgraded the entire group of multinational pharmaceutical companies based in Europe — AstraZeneca, Bayer, GlaxoSmithKline, Novartis, Novo Nordisk and Roche — in a report titled “An Avalanche of Risk? Downgrading to Cautious.” The analysts wrote, “The operating environment for pharma is worsening rapidly.”

The same concerns apply to drug giants in the United States. They are all struggling with research failures as they scramble to replace their cash cows, like Pfizer’s multimillion-dollar gamble on a replacement for the cholesterol-lowering drug Lipitor, which failed miserably in clinical trials. 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.

Aren't drug companies seen as good defensive stocks in the current environment?

Developing drugs has become a hugely expensive affair but who is going to be able to afford to buy the drugs apart from the rich? We don't have enough rich people to make the research worthwhile.

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A lot of asthma drug patents are due to expire shortly - the NHS spends billions on asthma drugs each year.

The big pharma are quickly inventing new drugs which, to the critical eye, look like the old drugs reinvented for new patents.

Time will tell.

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http://www.nytimes.c...=1&ref=business

Aren't drug companies seen as good defensive stocks in the current environment?

Developing drugs has become a hugely expensive affair but who is going to be able to afford to buy the drugs apart from the rich? We don't have enough rich people to make the research worthwhile.

You buy patented drugs, or shares in the company that owns the patent.

You invest in sound generics.

In a depression healthcare will weather the storm. But when a patent runs out and you can buy ASDFG from any supplier, you need not pay the premium to those with the patent anymore.

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Look at the 'food pyramid'.

Read up on conventional 'wisdom' regarding saturated fat, 'healthy' wholegrains, huge amounts of refined, processed, carbohydrate a day, but with REAL fruit flavour.

Diabetes up. Heart disease up. Cancer up. Thyroid problems up. Depression up. Even rickets is back!

They're not stupid, don't you worry about their profits. ;)

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Diagnostics is where the money is.

As well as the debilitating, and life threatening diseases, you also have lifestyle illnesses and diseases.

Potentially, your market is every person in the world, tested for every disease in the world, every year, forever.

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Look at the 'food pyramid'.

Read up on conventional 'wisdom' regarding saturated fat, 'healthy' wholegrains, huge amounts of refined, processed, carbohydrate a day, but with REAL fruit flavour.

Diabetes up. Heart disease up. Cancer up. Thyroid problems up. Depression up. Even rickets is back!

They're not stupid, don't you worry about their profits. ;)

I read that the immigrants are reintroducing diseases (from their 2nd/3rd World tiers) that were 99.9% eradicated in this country - like TB (Tuberculosis).

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i wrote a post about this a few months ago, pharms are going to lose a lot of revenue this year and N years, they need to move away from the pill towards more gene therapy and body regeneration therapies, otherwise if they leave it to late they'll just shrink up into smaller and smaller companies.

If they want to stay in business they need to start looking to long term cures and things like hair/tooth etc... regeneration.

small bio companies are going to be the new pharma over the next few years.

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I read that the immigrants are reintroducing diseases (from their 2nd/3rd World tiers) that were 99.9% eradicated in this country - like TB (Tuberculosis).

Yeah, those bl**dy Polish badgers....

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Because of the long time between discovering a new drug and it passing safety tests, drugs are allowed to be patented for 20 years, more than other inventions. So don't pity the pharmaceutical companies.

The expiring patents will already have been factored into the share price long ago. What really affects the share price is absence of new drugs in the pipeline, and, what all drug companies fear, a drug being withdrawn because of some adverse effect that was either unexpected, or they didn't hide from the regulators well enough.

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Because of the long time between discovering a new drug and it passing safety tests, drugs are allowed to be patented for 20 years, more than other inventions. So don't pity the pharmaceutical companies.

The expiring patents will already have been factored into the share price long ago. What really affects the share price is absence of new drugs in the pipeline, and, what all drug companies fear, a drug being withdrawn because of some adverse effect that was either unexpected, or they didn't hide from the regulators well enough.

its dont matter now, the old pharma tech is goign out the window, new smaller bio firms are taking over.

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The pharm-chem paradigm is running out of steam. The low hanging fruit has been picked, an the big, easy money made. Now its a declining number of new drugs. Same thing happened in an earlier era with vaccines.

But its not the en of the road for health technologies. Rejuvinative medicine; stem cells and related.. looks just huge in its potential, even bigger than the pharma-chem paradigm. There is also genetic engineering which is in its infancy. And there is nano-medicine which is also in its infancy.

Unfortunately I camee to realize the great names in Pharmacueticals will never make the jump to a new paradigm. They will stay making drugs, even as that business becomes about generics. New companies that don't even exist now will become ten billion dollar a year companies in the new fields.

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the old pharma tech is goign out the window, new smaller bio firms are taking over.

Or, As seems to be the typical American business practice, the big boys use their power and wealth to buy up the small fish or if that fails embroil them in lengthy and very technical court cases until they're so broke they have to sell up. :angry:

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Food companies need to keep adding lots of salt and fat to the food - there's income for life from unhealthy people!

Not just salt and fat, processed fat, chemical additives, and in general too much processing.

Almost every one of the so called 'civilisation illnesses' (heart / circulation illnesses, diabetes, cancer, asthma, bone problems, most cronic pains, etc. ) is preventable with a healthy diet, avoidance of toxins and other pollutants and a moderate amount of regular excercise.

In fact these are not illnesses but rather slow self-inflicted suicide (or homicide if you prefer to lay the blame on the food industry rather than the individual).

Edited by wise_eagle

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avoidance of toxins and other pollutants

Forgive me, but while your point about diet and exercise is plausible, the quoted part sounds like complete rubbish. Just what is a toxin anyway, and how do you avoid "other pollutants" in a way that does not involve moving to Antartica (assuming even that would work). I am sure there is a link to house prices somewhere in here ....

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will the clever NHS buying department move to generics immediately...or will they keep buying the brands?

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Would you rather pay 16p for 16 paracetamol or £1.16 for 16 paracetamol in a fancy branded box that does exactly the same thing...NHS take note, one way to save mega dosh. ;)

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http://www.nytimes.com/2011/03/07/business/07drug.html?_r=1&ref=business

Aren't drug companies seen as good defensive stocks in the current environment?

Developing drugs has become a hugely expensive affair but who is going to be able to afford to buy the drugs apart from the rich? We don't have enough rich people to make the research worthwhile.

It's not just Pfizer. The Japanese pharmaceutical company, Eisai, which just had a brand spanking new office designed and built in Hatfield is reeling from its alzheimer's drug, Arricept, coming off patent. It is thought that hundreds of jobs wil be lost in the UK as a result. The pharma world shrinks ever more.

http://www.pharmatimes.com/Article/11-03-04/Eisai_puts_focus_firmly_on_the_east_with_US_Europe_job_cuts.aspx

Edit: typo

Edited by Cozza

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will the clever NHS buying department move to generics immediately...or will they keep buying the brands?

The UK is already the most genericised drug market in Europe bar Germany. Most doctors prescribe by generic name, which cuts costs considerably, and there are penalties for choosing the brand name over the generic.

For branded drugs, pricing is technically free under the Pharmaceutical Price Regulation Scheme (PPRS). However, in practice there are price limits imposed by bodies such as NICE as well as through the usual negotiations between providers and the drug companies. So the NHS is already doing a pretty good job of cutting the drug bill.

But of course any company that can address an unmet need with a new treatment (for example, in cancer) will still make a great deal of money in the UK.

Edited by Woodworm

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Forgive me, but while your point about diet and exercise is plausible, the quoted part sounds like complete rubbish. Just what is a toxin anyway, and how do you avoid "other pollutants" in a way that does not involve moving to Antartica (assuming even that would work). I am sure there is a link to house prices somewhere in here ....

Toxin:

http://en.wikipedia.org/wiki/Toxin

one example among many: mould (especially black mould)

Pollutant:

http://en.wikipedia.org/wiki/Pollutant

Notable pollutants

Notable pollutants include the following groups:

* Heavy metals

* Persistent organic pollutants

* Polycyclic aromatic hydrocarbons

* Volatile organic compounds

* Environmental xenobiotics

If you believe toxins and other pollutants don't harm you and don't cause illnesses then good luck to you...

You are correct that it's next to impossible to completely avoid them, but you certainly can reduce them by not chosing to live in a heavy polluted area and/or house (mould, old paint containing lead, harmful pesticides/fungicides for example containing arsenic in the woodwork, asbestos, formaldehyde in cheap furniture, etc...)

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  • 312 Brexit, House prices and Summer 2020

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      • down 5% +
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