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GENERIC DIAZEPAM SALES APPROACH $10 MIL. IN FIRST FOUR MONTHS ON MARKET; VALIUM RETAIL SALES GROW 7% TO $235 MIL. IN 1985 -- PHARMACEUTICAL DATA SERVICES

Executive Summary

Sales of generic diazepam at pharmacist acquisition cost totaled $9.6 mil. from the time the drug was approved last September through the end of 1985, according to figures presented by Pharmaceutical Data Services (PDS) at its annual review meeting in New York City Feb. 13. While dollar sales volume of the pioneer drug, Valium,(END ITALICS) increased roughly 7%, from $219 mil. in 1984 to $235 mil. in 1985, both new Rxs and total Rxs for Valium declined during 1985. New Valium Rxs fell off 6.7% to 11.1 mil., while total Rxs slid 10.8% to 19.8 mil. The PDS data suggest that in the face of generic competition, and a corresponding decline in unit growth, Roche raised its Valium price to protect the product's revenue stream. The benzodiazepine fell from fifth to seventh in the PDS ranking of the top 20 selling products. The PDS data provided at the meeting indicate that over the last three-and-one half months of 1984 when generic diazepam was available, Valium lost nearly 25% of new retail Rxs to generics. In 1985, new retail Rxs for all diazepam products totaled nearly 12 mil., according to PDS. Assuming that new Rxs for diazepam were written at a steady rate of approximately 1 mil. per month, the 833,000 new Rxs written for generic diazepam from mid-September to the end of the year would represent approximately 24% of the 3.5 mil. new Rxs for diazepam in the retail market. Making the same assumptions, generics captured approximately 20% of the total number of retail Rxs written for diazepam since reaching the market in mid-September. However, despite the impact of generics, Valium's importance to Roche's U.S. Rx business increased last year. PDS data show that Valium accounted for nearly 48% of Roche's retail Rx sales, up from 46% in 1984 and 43% in 1983. More significant inroads were made by generic propranolol, which became available last August. By November, new Rxs for propranolol were totaling more than 200,000 per month, while the pioneer drug, Inderal, which had been averaging 600,000 new Rxs per month in July, declined to under 500,000 per month. PDS speculated that in 1986 generics could take the major share of new propranolol Rxs. Pointing to a graph which compared new Inderal Rxs to those for generic propranolol over the last part of 1985, PDS Dir. of Sales & Marketing, Michael Weintraub, commented: "Gneric propranolol has eroded much of Inderal's new marketshare from August . . . It is likely that sometime in 1986, these lines will meet." In terms of dollar volume, Inderal was the second largest Rx product in the U.S., with sales of $372 mil., up 6%. The product hardest hit by generic competition was Boots' Rufen (ibuprofen), the PDS data indicate. Annualizing at a rate of almost $50 mil. last summer, the product was overtaken by generic ibuprofen by year end. New Rxs for Rufen, which averaged about 400,000 per month in August, fell well below the 300,000 level by December and were surpassed by new generic Rxs by early November. "Rufen, a drug which is priced competitively [against Motrin] and is currently purchased by price-conscious consumers, has appeared to suffer most from generic drugs," Weintraub noted. "The already price-conscious consumer has looked (to generics) for further discounted prices." In contrast, Mortrin dollar sales increased steadily throughout the second half of 1985, but the drug's yearly volume of $120 mil. was 30% below 1984 levels. Pointing out that Mortrin's rate of new Rxs has shown a steady decline since October, Weintraub attributed the dollar growth to price increases. PDS explained that the increasing number of requests made by consumers for generic drugs are driven by two factors -- pharmacist "push" and increased consumer exposure to price differences, as well as the blessing of health care professionals. Based on a survey of 1,800 consumers, PDS found that 65% of current generic users attributed the dispensing of generic drugs to pharmacist actions or interactions. These could either have been suggestions by the pharmacist or a result of substitution laws. Commenting on the influence of health care professionals, Weintraub offered: "What this is telling me is that price differential in terms of savings to the consumer didn't mean as much as their getting a blessing from the doctor or pharmacist to get a generic drug." He referred to the physician and/or pharmacist approval as "the ultimate stamp of quality acceptable by the consumers that we talked to." Finally, the PDS survey indicated that consumer opinions about generic drugs cannot be compared with general attitudes about other generic commodities. "There is a middleman in force here with consumers getting generic drugs," Weintraub said. "They won't necessarily go into a grocery store and pick a generic product off the shelf as likely as they would go and get a generic drug if they got that stamp of approval." Chart omitted.

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