GlaxoSmithKline Plc (GSK)’s best-selling Advair drug for smokers’ cough and asthma is losing U.S. market share to products from AstraZeneca Plc (AZN) and Merck & Co. after the country’s largest pharmacy-benefits manager dropped Advair from its 2014 list of reimbursed medicines.
Advair’s share of the inhaled corticosteroid and long-acting bronchodilator market fell to 61.6 percent for the week ended Jan. 24, compared with 68.4 percent for the week ended Sept. 6, according to the most recent data compiled by Bloomberg and Symphony Health Solutions. The data focus on the four ICS/LABA drugs on the market.
Growing demand for AstraZeneca’s Symbicort, which has a market share of 30 percent, and Merck’s Dulera, with an 8.4 percent share, have eaten into Advair sales, which were 2.5 billion pounds ($4.1 billion) in the U.S. in 2012. Prescriptions for Glaxo’s new Breo treatment have risen since the drug became available at U.S. pharmacies on Oct. 30, and stand at 1,244, or 0.3 percent of the market.
“Advair has been losing share to Symbicort, and to a lesser degree to Dulera, driven by the more aggressive pricing and rebating strategy from both Astra and Merck,” said Sam Fazeli, an analyst in London at Bloomberg Industries. “It is still too early to see any meaningful impact from Breo.”
Express Scripts Holding Co., the biggest U.S. pharmacy-benefits manager, excluded both Advair and Breo from its list of medicines covered by insurance companies that went into effect in January, in favor of Dulera and Symbicort, which are cheaper. Patients who buy the excluded drugs pay full retail price and were told about the updated formulary in August, Express Scripts spokesman Brian Henry said by e-mail.
Express Scripts’ exclusion of Advair may cut the drug’s sales by about 170 million pounds this year, Barclays Plc said in a note to investors today.
“Competitive and pricing concerns in respiratory remain a key concern for investors,” Barclays analyst Mark Purcell said in the note.
“For those drugs that are removed, equally effective products with lower overall costs, including many generics, remain available on the formulary,” CVS spokeswoman Christine Cramer said by e-mail.
Excluded drugs may be added to the list as the manufacturers negotiate with benefits managers on price.
“Primary-care products in particular will build over time, and we need to be careful not to rush them if we are not going to undermine the longer-term proposition,” Simon Dingemans, Glaxo’s chief financial officer, said at a conference in San Francisco on Jan. 14. “We are going to be quite patient and careful about how we complete that.”
Chronic obstructive pulmonary disease, also known as smokers’ cough, kills a person every 10 seconds and will become the third leading cause of death worldwide by 2030, according to the World Health Organization and Glaxo. Conditions known as chronic bronchitis and emphysema are both included in the COPD diagnosis. While asthma affects more people globally, it doesn’t kill on the scale of COPD, according to the WHO.
While the patent on Advair expired in the U.S. in 2010, a separate patent on the Diskus device used to administer Advair remains in force through 2016. Still, generic competition is looming after the Food and Drug Administration in September proposed a simpler route for rivals seeking to copy the drug.
In addition to Breo, to protect its respiratory business, London-based Glaxo also plans to introduce Anoro, approved in the U.S. in December, this quarter.
Shares of Consort Medical Plc (CSRT), which produces the Diskus device for Glaxo, fell 2.6 percent to close at 1,042 pence in London, the biggest drop since Nov. 25. Glaxo shares fell 1.1 percent.
Advair is also facing pressure from generic competition in Europe. Novartis AG (NOVN) and Vectura Plc’s AirFluSal, a generic form of Advair, was approved in Germany on Jan. 13, following approval in Denmark. AirFluSal is likely to add to reimbursement pressure in Europe, Purcell said.
Advair brought in 5.05 billion pounds in sales globally in 2012, with about half of that coming from the U.S. Analysts predict that Advair generated 5.18 billion pounds last year, according to the average of 11 estimates compiled by Bloomberg.
Glaxo reports full-year earnings tomorrow.
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