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LEDERLE PROPRANOLOL WILL ENTER MARKET AT 30-35% DISCOUNT TO INDERAL; AYERST FACES LEDERLE AND CHELSEA/RUGBY AS PROPRANOLOL GOES MULTI-SOURCE

Executive Summary

Lederle will enter the multi-source market for propranolol with a generic priced at approximately "30-35% less than the published price for Inderal," the firm says. Lederle began shipping generic propranolol, manufactured at an American Cyanamid facility in the U.K., on July 31. The product cleared FDA on July 30 in four dosage forms, 10 mg, 20 mg, 40 mg, and 80 mg tabs. Chelsea Labs received simultaneous approval for the same dosage forms and also began shipping the product immediately. Chelsea will manufacture propranolol for its affiliate Rugby Labs. Chelsea said initial marketing to the trade will be conducted through its extensive telemarketing force (estimated at 75 to 100 people) and the company's 100-person field sales force. The July 30 propranolol approvals assure an intense, initial challenge to Ayerst's Inderal franchise in the U.S. The privately-held Chelsea/Rugby group is estimated as the largest generic company in the U.S. Lederle is the most aggressive of the traditional brandname companies in the generic business. The simultaneous approvals for the first generic competition will probably reduce the period of generic pricing exclusivity that often occurs at the start of multi-source competition. Lederle and Chelsea will have to compete with each other as well as the established Ayerst brand. HHS highlighted the generic approvals of propranolol in a July 31 press release. Defining the U.S. market for propranolol at "about $400 mil. per year" in retail sales, HHS said: "With this approval, the FDA has accelerated the pace in assuring that beneficial drugs reach consumers as quickly and economically as possible." Lederle Is Now Competing With Dyazide And Inderal; Chelsea To Use Ayerst Color Codes Using its publicity power in lieu of an active MAC program to encourage price reductions in the propranolol market, HHS Secty. Heckler said: "Through increased competition, the market-place can bring about price reductions in off-patent drugs for millions of Americans." The propranolol approvals were announced two weeks after Rep. Waxman's (D-Calif.) House Health Subcmte. hearings on Rx price increases, at which Inderal was one of the spotlighted products. Propranolol is Lederle's second major, multi-source product to enter the U.S. cardiovascular market in the last 10 months. In October, 1984, Lederle began marketing the first triamterene/hydrochlorothiazide combo product Maxzide, in competition to SK&F's Dyazide. The Lederle and Chelsea generics cleared FDA as ANDA (abbreviated new drug application) approvals under the provisions of the Waxman/Hatch Act. The companies and originally filed for approval as paper NDAs citing literature references to Inderal. The applications were switched to ANDAs after the passage of Waxman/Hatch last fall. Ayerst made an 11th hour attempt to stave off the generic competition via a July 24 petition to FDA requesting more stringent bioequivalence and safety testing for every dosage strength of generic propranolol (see related T&G this issue). Lederle will market its propranolol as round, convex, bottled tabs in a four-color coding system: gray (10 mg); light lavender (20 mg); light brown (40 mg); and light blue (80 mg). Chelsea is using a color-coding system to mimic the existing Inderal codes: orange (10 mg); blue (20 mg); green (40 mg); and yellow (80 mg). The Chelsea tabs will be round, biconex. Ayerst switched Inderal to a hexagonal shape several years ago in anticipation of generic competition. Approved indications for the generics include hypertension, angina, supraventricular arrhythmias, migraine and hypertrophic subaortic stenosis. The generic versions do not carry a label indication for myocardial reinfarction. Ayerst added that indication in September 1983. The generic labeling further does not mention the NIH Beta-blocker Heart Attack Trial. Ayerst is working on new indications for cirrhosis of the liver, portal hypertension and tremor and anxiety. Under the carcinogenesis and mutagenesis section of labeling, both the Lederle and Chelsea formulations cite 18-month studies on rats and mice showing no evidence of significant drug-induced toxicity. Ayerst had asked FDA to have generic mfrs. repeat those studies.

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