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As Deadline For CFC Inhalers Looms, Firms Offer Incentives For HFA Switch

Executive Summary

By the end of the year, metered dose inhalers containing chlorofluorocarbon (CFC) propellants will no longer be on the market. While consumers with asthma or chronic bronchitis will have no choice but to switch to alternative hydrofluoroalkane (HFA)-propelled products, many have been reluctant to do so

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Teva winning the albuterol wars

As albuterol patients switch from inhalers containing chlorofluorocarbon (CFC) to those using hydrofluoroalkane (HFA) as a propellant, Teva's ProAir has taken the vast majority of the scripts. "By the end of the third quarter, 80 percent of the market had switched, with Teva's ProAir capturing 66 percent of the switchers," Teva CEO Shlomo Yanai said on the company's earnings call Nov. 6. FDA is mandating the switchover as part of the global effort to eliminate ozone-harming CFC, and the regulatory move has given brands an opportunity to try to reclaim a market segment that had become mostly generic (1"The Pink Sheet," June 9, 2008, p. 14). ProAir has the lowest wholesale acquisition cost of the four HFA inhalers on the market, but at $29.37 it is still more than twice what CFC versions cost. Counting switches and starts, "ProAir continues to increase its leadership of the HFA market with 59 percent market share in Q3 growing into 61 percent by the end of October," Yanai noted. CFC inhalers can't be sold after the end of the year, and Teva is anticipating "excellent" sales for ProAir in the fourth quarter as the remaining 20 percent of the market switches over. But unless the firm's market share improves significantly, the switch process will still have increased brand penetration, since generics held about 70 percent of the market before the transition began

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