Antihistamine Price Erosion Justifies Forced Switch – WellPoint

WellPoint Health Networks is continuing its campaign to urge a forced Rx-to-OTC switch of low-and non-sedating antihistamines cetirizine, fexofenadine and desloratadine.

A switch of the three antihistamines would help to further lower the cost of the drugs, WellPoint Exec VP & Chief Medical Officer Woodrow Myers, MD, and VP & Chief Pharmacy Officer Robert Seidman reiterate in a recent letter to FDA.

"The price of [Schering-Plough's] Claritin dropped from $3/pill to $.10/pill when it became an OTC generic drug," the execs note. "Due to significant OTC competition, a significant drop in price can be anticipated for the other second-generation antihistamines," including Pfizer's Zyrtec , Aventis' Allegra and Schering's Clarinex .

"Removing these antihistamines from prescription drug status also helps health care companies such as WellPoint to provide affordable access to the next generation of biological drugs under FDA review," they add. "Movement to OTC status will increase ease of access and lower cost to the consumer by obviating the need for the expense of a physician visit."

Although cost-effectiveness has been an increasingly popular topic in recent months - primarily fueled by the need for better data to justify reimbursement of Rx drugs and medical devices - FDA traditionally does not consider such issues when making safety and effectiveness determinations.

WellPoint submitted its first petition requesting a forced switch of Claritin, Allegra and Zyrtec in 1998, then added Claritin follow-on drug Clarinex to its list in 2002. FDA's decision on the petitions is awaiting sign-off by HHS.

Last December, Seidman reflected on WellPoint's strategy, suggesting it may have been inappropriate for a health plan to request a forced switch of the drugs, and instead recommended a coalition of interested groups take the initiative (¹ (Also see "WellPoint Would Take A Mulligan On Antihistamine Petition In Hindsight" - Pink Sheet, 8 Dec, 2003.), p. 3).

Nonetheless, WellPoint says it feels obliged to continue its efforts to gain OTC status via a forced switch, and hopes to meet with the agency before the end of the month to discuss the recent letter.

WellPoint has said it will not sue FDA if the petitions are rejected, noting the goal of sparking a dialogue about the agency's review process has been accomplished.

As the insurer persists in its efforts, antihistamine marketers continue to face the fall-out of an altered allergy landscape.

During a second quarter earnings call July 21, Schering-Plough reported that overall sales of OTC loratadine - including both branded and private label options - increased by 40% in the period.

OTC Claritin revenue jumped 22% to $117 mil. due to trade inventory adjustments in the year-ago period. Conversely, domestic sales of next-generation Clarinex (desloratadine) continued to free-fall, dropping 13% to $126 mil.

Schering has yet to announce its plans for Clarinex. During the firm's second quarter call, Exec VP & President, Global Pharmaceuticals Carrie Cox told investors: "While these pressures may remain for the second half of this year, we continue working toward a long-term approach to address these dynamics."

Clarinex' first patent is slated to expire in October, while other patents run until 2007.

Pfizer's Zyrtec sales fell 10% in the second quarter to $306 mil.

"Zyrtec revenue and prescription declines were due to the 18% decline in year-to-date new prescriptions in the antihistamine market" and the debut of branded and private-label OTC loratadine, Pfizer says in its July 21 ² earnings release.

The firm notes the decline in Zyrtec new scripts is less than that of Allegra, which fell 11% between January and May compared to the year-ago period. Pfizer says Zyrtec's advantage is its "strong performance in a broad range of formulations - tablets, syrup and the 12-hour decongestant formulation - for both adult and pediatric patients."

Chewable Zyrtec tablets in 5 mg and 10 mg doses debuted in April after gaining FDA approval in March (³ (Also see "Pfizer Rounds Out Zyrtec Line With Chewable Tablet NDA Approval" - Pink Sheet, 22 Mar, 2004.), p. 8).