Posted At Pubs.acs.org

BY : Selena Class

The luster of the pharmaceutical industry has dimmed. Sales continue to grow, but many leading products are in decline owing to competition from generics or safety concerns. The latter has contributed to a waning public confidence in drug marketers and regulators and has helped to tarnish the industry's reputation. New product approvals remain near a 25-year low, and major companies are increasingly dependent on external sources of innovation. Niche blockbusters and personalized medicines hold some promise, but companies face a struggle to burnish the industry's image and create sustainable business models.

This past year offered no major change in either sales growth or outlook for the global pharmaceutical industry. Looking back, global sales for 2004 grew 7% to reach a record $550 billion, according to IMS Health. This performance is compared with 9% growth in 2003, when the worldwide drug market reached $492 billion. In 2004, the U.S. market grew 8%-the first drop below double-digit growth since 1995-partly affected by a mild influenza season and an increased use of nonprescription antiulcerants and antihistamines.

The U.S. is still by far the dominant market, and individual country rankings remained unchanged from mid-2004 to mid-2005. The U.S. lead, however, was eroded slightly from 46.0% in June 2004 to 44.7% in June 2005 by significantly increased sales in China. Nevertheless, in the 12-month period, U.S. sales grew 7% to $246 billion. China's sales rose 30%, to reach $8.6 billion-still relatively small in total, but given the huge population and economic boom there, IMS expects China to see above-average growth.Reflecting increasing cost-containment in Europe, sales growth slowed in the U.K., Italy, and Spain. Meanwhile, Canada and Mexico saw healthy sales increases, while Japan, the world's second-largest market, maintained modest growth.

Biotechnology products, up 17%, and generics, rising 10%, outstripped overall industry growth in 2004. Generics, however, accounted for only 8% of 2004 sales by value in North America and Western Europe, even though they now represent more than 30% of the market by volume in the U.S., Canada, Germany, and the U.K. Growth in the pharmaceutical market has been moderated by pressures and uncertainties over pricing, safety, and regulatory issues, although there was still strong underlying demand and pockets of higher growth.

Just as the pharmaceutical industry was recovering from the shock of Merck withdrawing its blockbuster cyclooxygenase-2 (COX-2) inhibitor arthritis drug Vioxx at the end of September 2004, more bad news surfaced and continued through 2005. A long-term cancer prevention trial revealed that Pfizer's COX-2 inhibitor Celebrex has its own cardiovascular safety issues, and it now carries stronger warnings on its label. Then Pfizer's second such compound, Bextra, was withdrawn in April 2005, owing to the risk of Stevens-Johnson syndrome, a severe skin reaction, and its injectable parecoxib, marketed as Dynastat in some European countries, was rejected by the Food & Drug Administration in September 2005.

Pfizer, the world's largest pharmaceutical manufacturer, was not alone in having such problems. Following a much-heralded launch in November 2004, Elan and Biogen Idec's novel multiple sclerosis therapy Tysabri was withdrawn in February 2005 after some patients also using Biogen Idec's Avonex developed progressive multifocal leukoencephalopathy (PML), a rare demyelinating disease of the central nervous system. Later in the year, FDA ordered Purdue Pharma to withdraw its analgesic Palladone after just six months on the market because of concerns about fatal adverse reactions if used in conjunction with alcohol.

Safety warnings or efficacy doubts also arose for products such as Eli Lilly's attention-deficit hyperactivity disorder (ADHD) drug Strattera, Johnson & Johnson's (J&J) heart failure drug Natrecor, and AstraZeneca's lung cancer treatment Iressa. Meanwhile, the phosphodiesterase V inhibitors for erectile dysfunction, including Pfizer's Viagra, were associated with a rare form of blindness, though no firm link has been established.

Still more drugs didn't even reach the U.S. market: FDA rejected the likes of AstraZeneca's anticoagulant Exanta, Solvay's irritable bowel syndrome therapy cilansetron, J&J's leukemia drug Zarnestra, Abbott Laboratories' prostate cancer treatment Xinlay, and Pfizer's selective estrogen receptor modulator Oporia for preventing osteoporosis.

Even novel drug therapies failed to impress regulators, who did not approve J&J and Pharmaceutical Product Development (PPD)'s dapoxetine, which would have been the first drug treatment for premature ejaculation, and Bristol-Myers Squibb (BMS) and Merck's oral antidiabetic Pargluva, which would have been the first dual alpha and gamma modulator of peroxisome proliferator-activated receptors, affecting both insulin resistance and blood lipids. After a negative advisory panel vote, thanks to poor efficacy data and risk queries, Procter & Gamble withdrew the application for Intrinsa, a transdermal testosterone patch developed with Watson Pharmaceuticals for the treatment of hypoactive sexual desire disorder in women.

Failures at the Phase III trial stage included Corgentech and BMS's edifoligide for artery bypass grafts; Takeda's antidiabetic TAK-559; Serono's onercept for psoriasis and Canvaxin, the therapeutic vaccine for melanoma developed with CancerVax; Daiichi Sankyo's atherosclerosis product pactimibe (CS 505); and Lundbeck and Cephalon's CEP-1347, a Parkinson's disease therapy. Questions also hang over an important new therapy class, the HIV CCR5 inhibitors, after GlaxoSmithKline (GSK) halted trials of Ono Pharmaceutical's aplaviroc and Schering-Plough ended a trial of vicriviroc.