A Few Things to Consider This Year

By: Chris Didizian, CIS Compliance Specialist
chrisdidizian@cis-partners.com

I often tend to take a step back and think about the “big picture” from time to time. Well, last night while watching news reports on our new president-elect, I began to think generally about the pharma industry. Yes, I know. Many bloggers have already posted their thoughts in past weeks, but a lot has happened since, and this post will attempt to recall my thoughts, which are heavily influenced by the media at this point and thus mostly speculative.

There are three variables to consider: FDA commissioner, patents, and generic drug manufacturers. The next three years will be hectic in the industry, for lack of a better word. Many of the blockbuster drugs, which generate billions of dollars in revenue, will be coming off patent. In addition, there are few novel drugs in the pipeline to replace the loss of blockbuster patents. Many companies have anticipated this and are allocating money into generics, or funding genetic therapies research, or both. It follows that the larger generic companies, like Teva, will see a substantial increase in revenue throughout this time period.

Now let’s look at the likely candidate for taking over the FDA. A recent report shown here indicates that Obama and his administration are favoring former commissioner, Dr. Jane Henney. Dr. Henney has a solid rapport within the industry as she was well known to not only reduce the drug approval process but also made it more flexible for manufacturers. As a result, it is likely that we will see more approvals under Dr. Henney. That could be good news for the industry as a whole. On the other end, the Obama administration will most likely be “pro-generic” for the simple fact that they are more affordable.

I’m going to try and tie all this together now. We have a potential commissioner who is known for speeding up the drug, approval process. We have blockbuster patents ending and generic manufacturers salivating over them. We also have a new administration that will most likely be pro-generic. What does all this mean? Well I think that if Obama is truly considering Dr. Henney, then we will absolutely see an increase in approvals, but for generic, not necessarily novel drugs.