Bristol-Myers Squibb Banks on Retooled Diabetes Drugs
Bristol-Myers Squibb, the world's fifth-largest drug maker, "has hit one of the toughest periods in its 114-year history," and is banking on two new diabetes drugs to get it back on track, the Wall Street Journal reports. Last September, the company's best-selling diabetes drug, Glucophage, lost its patent protection, and several generics are "expected to gobble up most of the drug's $2 billion in annual sales." Bristol-Myers officials have launched a campaign to persuade patients to switch from Glucophage to Glucophage XR, a once-a-day version of the drug, and Glucovance, a combination of Glucophage and sulphonylurea, a generic diabetes drug. Both drugs, which are currently "shielded from generic competition," are "rejiggered versions of Glucophage," a compound that controls blood sugar. XR is less expensive than Glucophage, but its price is "almost double" what the Glucophage generics cost.
As part of the campaign, the company raised Glucophage's price by 8% in January, sent letters to more than one million Glucophage users, placed ads in subways and buses "in poor neighborhoods where diabetes rates are high" and gave away coupons for one month's worth of XR. In addition, the company has doubled the number of sales representatives who pitch the two new drugs and hired a team of salespeople to sift through patient records to "uncover those who aren't controlling their diabetes well on Glucophage and could be candidates for the new drugs." The Journal reports that in some instances, salespeople are "exaggerating" the benefits of the new drugs, which "aren't substantially different" from Glucophage. If the campaign is successful, "it could mean that tens of thousands of elderly and poor patients ... will keep using the high-priced alternatives," the Journal reports. But so far, sales of the replacement drugs are "doing poorly." During the first quarter of this year, Glucovance's sales totaled $24 million, and XR had sales of $14 million, as doctors say that the new drugs are not "necessarily better" than Glucophage and insurers such as Kaiser Permanent keep the drugs off formulary lists. "A small amount of convenience at a high cost is not looked favorably on," Kaiser Permanente executive Sharon Levine said.
The company's "unexpected dependence" on Glucophage drugs is a result of its "woeful production" of new drugs, as its labs continue to "stumble." The Journal reports that since 1993, Bristol-Myers has spent $11 billion on research and development, with Glucovance and XR the "most promising products" to result. In addition, seven of the company's 10 top-selling drugs "are barely growing" in sales or soon could be "undercut" by generic competitors. Bristol-Myers is also facing the prospect that by September, the company could have just one drug with annual sales exceeding $1.5 billion, instead of the three that it currently has. The company's effort to switch Glucophage users to the two new drugs follows a "trend" in the pharmaceutical industry of "trying to persuade to adopt a new drug that isn't much better than the old." Last year, the FDA approved 27 "wholly new drugs," compared with 53 in 1996. If this "drug drought" continues, the "global [pharmaceutical] industry will suffer and consolidate more," the Journal reports (Harris, Wall Street Journal, 5/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.