This month in pharma: Prozac's patent expires

The dreaded words 'generic competition' are increasingly the greatest fear for every innovation-driven pharmaceutical company, with the 'patent cliff' edging ever closer on the horizon.

The opening of the market for branded therapies to cheap competitors, especially with healthcare systems looking to run as efficiently and cost-effectively as possible, can turn billion-dollar blockbusters that define and shape a company into just another name on a firm's portfolio.

The prospect of cheap rivals to branded products is nothing new though, and August 2001 saw one of the world's most famous drugs lose its monopoly in the world of major depression, as Eli Lilly's Prozac (fluoxetine) was stripped of its patent protection, 14 years after being approved for use by the US Food and Drug Administration (FDA).

That must be a painful memory for Lilly, and one that must be resonating at the moment as the company faces one of the highest drops from the metaphorical cliff, with the $2bn annual sales of antipsychotic Zyprexa (olanzapine) set to face dramatic losses.

The plummet has begun already, according to some, however, with a July 21 headline from news agency Reuters proclaiming 'Lilly's feared patent cliff becomes real' as company profits were hit by the loss of patent protection for cancer medicine Gemzar (gemcitabine).

With Prozac though, Lilly lost its hold over one of the world's most recognisable drugs that has adorned film and book titles – see Elizabeth Wurtzel's cult hit 'Prozac Nation' - and seeped its way into popular society and culture in a way few other medicines have.

The drug's story began in the 1970s when evidence of the role of the neurotransmitter serotonin in depression began to emerge and efforts turned to researching an agent to inhibit serotonin levels in the body.

As the decade progressed, this work led to the discovery of fluoxetine, a selective serotonin reuptake inhibitor (SSRI), as a potential treatment.

Other SSRIs were introduced to the market in the time fluoxetine was developed as Prozac, but several of these products were later to be withdrawn due to adverse effects, including neurological disease Guillain–Barré syndrome.

With safer outcomes than its contemporaries, Prozac was approved for the treatment of depression by the FDA in 1987. 

A successful launch campaign became an ongoing triumph that lasted into the drug's teenage years - Prozac sales in the US accounted for around 20 per cent of the company's overall revenue, according to Eli Lilly's 2001 financial report.

However, its remarkable success only meant the effects of a patent loss would be even more hard-hitting.

With the entrance of generic competition in August 2001, Lilly's fluoxetine products - Prozac, Prozac Weekly and Sarafem - saw a drop in sales of 23 per cent from 2000 to 2001, including a 66 per cent decline in the fourth quarter of 2001.

Overcoming such a significant and instant drop was going to be an exceptional challenge, and it was one acknowledged by CEO and president Sidney Taurel in his introduction to the company's 2002 annual report: "We entered 2002 intent on doing something no company in our industry had ever done – absorbing the loss of patent protection for our dominant product (Prozac) and returning revenues to a growth track without resorting to a major merger or acquisition."

The solution for Lilly was an impressive line-up of future blockbusters that would only grow over the next few years.

'The company currently expects low-to-mid single-digit sales growth for 2002,' stated the 2002 annual report. 'Several key products are expected to contribute to this growth, including Zyprexa, Gemzar, Evista, diabetes care products, and Xigris. Growth in all these products is anticipated to more than offset the decline of Prozac sales and anti-infectives.'

Ten years later, though, these are the very drugs that are set to face the same fate as Prozac did before.

In an age of tighter regulations, where many therapy areas are already catered for to some extent and governments are imposing more austere national health plans, however, blockbuster drugs are no longer the go-to option to revitalise Big Pharma.

Dubbed 'Years YZ' by Lilly, the next few years are crucial for the company, as well as all pharma firms in the same predicament, with most answers seeming to be via growth in emerging markets, diversification of products and major acquisitions. 

Prozac shows what effect the loss of a massive-selling drug can have on a company, but it is also an example of how to cope with that challenge.

"We've seen this coming and we're prepared," said Lilly CEO, John C Lechleiter, in a recent speech to shareholders. We will see if he is right soon enough.

The Author
Tom Meek, web editor at PMLiVE