Pharma Cash Cows Out to Pasture

This year, the patents of several popular drugs will end, allowing a cheaper, generic version to be available to the public. That is fantastic news for people who struggle to pay for Lipitor, Advair, Zyprexa, Seroquel and other name-brand drugs. However, the ramifications of the patents expiration don't end at cheap drugs. As companies earn less, they have less money to reinvest into research and development of newer drugs. The drug companies are looking for new ways to make money.

Some companies will focus their research on niche markets in cancer, inflammation, such as fibromyalgia and rheumatoid arthritis, and brain diseases such as Alzheimer's and Parkinson's. Patients with rare diseases and less lucrative illnesses may find it hard to find clinical trials and research as pharmaceutical companies look for their next cash cow.

Companies will take fewer risks in developing drugs with less mass appeal. It can take 12 years for a drug to go on the market for the public. After years of research, the drug must be approved by the U.S. Food and Drug Administration (FDA) for testing in humans. Then the drug undergoes several years of clinical trials closely monitored for adverse affects in participants. Once the drug successfully goes through at least three clinical trials, the drug company can then submit an application for approval. Submission of an application doesn't guarantee approval; in recent months, the FDA has rejected the diet drugs Contrave, Orexigen and Qnexa, as well as the Medtronic spine device Amplify, and the Afrezza and inhaled insulin device. In order for a drug to be sold in the United States, it must be approved by the FDA. Furthermore, once the drug is approved y the FDA, it is only approved for that particular use. For example, a blood thinner tested and approved to treat those with heart disease will have to go through additional FDA approval if it is found that the drug also helps prevent stroke. In the highly competitive market of drug sales, reps may promote the drug to physicians for additional uses, but it is illegal to market the drug off label.

Furthermore large pharmaceutical companies are looking to mergers and purchasing other companies to continue the revenue streams within the corporation. Pfizer's purchase of Wyeth, Merck's purchase of Schering-Plough, and Roche's purchase of Genentech over the past two years are ways for the companies to pool their resources to improve the bottom line. Although the flow of cash continues, at least on a temporary basis, it raises eyebrows as large companies dominate the industry similar to telecom and the cable industries.

Photo by Dvortygirl