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In 2001, 66 megabrands or blockbusters
occupied 45% of the total pharmaceutical market, according
to Dr David Ebsworth, up until recently president &
general manager, business group pharma, Bayer, speaking
at the Economist 8th Annual Pharmaceutical Conference
in February 2002. Ebsworth defines a megabrand as any drug
having sales in excess of $1 billion.
Over the past decade the concept
of the 'megabrand'
has taken a firm grasp of the pharma psyche. In 1992 for
example (according to Ebsworth), only 4 megabrands existed.
The number jumped in 1998 to 29 and again in 2000 to 55.
The megabrand as a percentage of the overall pharma market
has grown to reflect the number of megabrands available.
In 1991, megabrands accounted for 6% of the overall pharma
market. This figure had jumped to 18% by 1997 and to 45%
by 2001. According to Ebsworth, between 2000 and year end
2002, the top 20 brands are estimated to grow by 70%.
Source: IMS World Review 2001 (please note
that because of the nature of the MIDAS data, these figures
are less than those quoted by Ebsworth)
Thirteen Companies with
Two or More Blockbusters
Only 5 companies had more than
2 blockbusters in 2001. These include GlaxoSmithKline with
9; Pfizer, 8; Merck & Co, 5: and Johnson & Johnson
and Bristol-Myers Squibb, both with 4 each. A further 8
companies had 2 blockbusters. "Companies with blockbusters
have the pleasure and ability on the one hand to focus,
but the pain of the loss of that product when it exits the
market, either because it goes generic or because of an
early and sudden withdrawal", said Ebsworth.
Ranking of Pharma Companies
by Total Blockbuster Sales in 2001
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Rank
by Blockbuster Status
|
Rank
by Audited Sales
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Corporation
|
No
of Blockbusters
|
Blockbuster
Sales/ Ethical Sales (%)
|
|
1
|
1
|
Pfizer
|
8
|
79.8
|
|
2
|
2
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GlaxoSmithKline
|
9
|
50.7
|
|
3
|
3
|
Merck & Co
|
5
|
63.0
|
|
4
|
4
|
Johnson & Johnson
|
4
|
56.3
|
|
5
|
6
|
Bristol-Myers Squibb
|
4
|
49.8
|
|
6
|
5
|
AstraZeneca
|
2
|
47.8
|
|
7
|
12
|
Lilly
|
2
|
55.7
|
|
8
|
9
|
Pharmacia
|
2
|
35.5
|
|
9
|
19
|
Amgen
|
2
|
99.9
|
|
10
|
11
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American Home
|
2
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31.2
|
|
11
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16
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Takeda
|
2
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46.6
|
|
12
|
8
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Aventis
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2
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22.9
|
|
13
|
15
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Bayer
|
2
|
49.9
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Source: IMS World Review/Ebsworth
Presentation
Shortened Exclusivity Periods/Faster
Generic Erosion Spells Problems for Blockbusters
Ebsworth explained that companies
dominant in the blockbuster arena have to become fleeter
of foot in order to protect their franchise. Exclusivity
periods for example have become much shorter. The beta-blocker
Inderal (propranolol) was introduced onto the market in
1965, but it was not until 1987 that the second follower
in the class, Lopressor (metoprolol), became available.
Contrast this to the antirheumatic Celebrex (celecoxib),
launched in 1999, versus Vioxx (rofecoxib), also launched
in 1999. "Even if a drug is the first in its class, it cannot
expect a window of opportunity – blockbusters have to battle
very hard in the marketplace", said Ebsworth. "Marketing
exclusivity periods are shrinking."
Generic erosion has also accelerated
pace. In the 1980s, a drug could expect to have lost 40%
of its peak sales some 12 months following the launch of
a generic. Compare this figure to the 1990s, when a drug
might expect to have lost 60% of its peak sales 12 months
after generic entry and 70% 18 months later (versus 48%
for the 1980s). "Generic companies are getting better at
attacking franchises and taking a significant percentage
of the market in an increasingly shorter time frame."
Concept of 'Mega Blockbuster'
Emerging
The standards for launch have
also changed. Whereas until recently, a blockbuster could
expect to take about three years to attain sales of $1 billion,
and to continue to grow very significantly during the first
10 years of a product lifecycle, Ebsworth categorised a
new type of blockbuster, or 'mega blockbuster'. The mega
blockbuster he defined as a product garnering sales of $1
billion in its first year alone on the market. Currently,
three products fall into this category, Celebrex, the erectile
dysfunction treatment Viagra (sildenafil) and the lipid-lowering
drug Lipitor (atorvastatin). "Significant additive value
can be achieved if a drug can attain mega blockbuster sales."
The geographical split of companies
who possess blockbusters has also changed over the past
decade. Whereas in 1991, 60% of companies with blockbuster
drugs were European, and 40% were US, in 2001, only 28%
of blockbusters belonged to European companies, versus a
figure of 68% for the US and 4% for Japan.
Drivers of Blockbusters
Conditions driving blockbusters
include:
- medical need/innovation
- population size – e.g.,
an underserved marketplace, such as hypercholesterolemia
and the use of statins
- pricing potential – if the
price is not right, high sales figures cannot be achieved
- extensive promotional might
– companies must be able to finance a tremendous promotional
effort
- shortened market lead-time
for innovation
- key objective is to effectively
utilise huge marketing and sales investments to capture
maximum market share as quickly as possible – leads to
issues such as global rollout
Regarding the future of the
blockbuster, Ebsworth concluded: "I believe the industry
needs to spend more time, not just focusing on blockbusters,
but focusing also on more specialist products. In the future
I believe there will be a role for both. However, big pharma
will continue to have a need for blockbusters to fuel the
beast of their engine."
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