Global Insight Perspective | |
Significance | Barr Pharmaceuticals' subsidiary, Barr Laboratories, has gained U.S. FDA approval to market a generic version of oral contraceptive Yasmin in the United States, two months after a court ruled that Bayer Schering Pharma's patent on the drug was invalid. |
Implications | Once launched, Barr will have 180 days of market exclusivity during which its generic will be the only one allowed to compete with Bayer Schering's brand-name Yasmin on the U.S. market. According to IMS, U.S. sales of Yasmin reached US$575 million during the year to February 2008. |
Outlook | Bayer Schering is certain to seek an injunction blocking U.S. sales of generic Yasmin until the outcome of its appeal against the judge's ruling is known. At stake is over US$500 million in annual sales, which would boost Barr's flagging top line if gained, but would cause considerable damage to Bayer Schering if eroded so soon. |
U.S. generic drug-maker Barr Laboratories has been granted approval by the U.S. FDA to market a copy version of birth-control pill Yasmin (drospirenone and ethinyl estradiol) in the United States. Yasmin is currently produced by German healthcare giant Bayer Schering Pharma, which relies on the pill and its family of associated products to bring in approximately 10% of its annual pharmaceutical sales. When Barr first submitted an abbreviated new drug application (ANDA) to the FDA back in 2005, it sought permission to market generic Yasmin on the grounds that the pill's U.S. patents held by Bayer Schering (or Schering AG, as it was then) were invalid. Three years later, a judge agreed, ruling that the central '531 patent was effectively invalid (see Germany: 4 March 2008: Bayer Schering Pharma Loses U.S. Patent Case on Yasmin, Revises 2008 Guidance). Bayer Schering subsequently appealed the ruling, and the appeal process is still under way (see Germany: 1 April 2008: Bayer Schering Appeals Against U.S. Invalidity Ruling on Yasmin Patent).
The FDA approval comes just days after Barr posted disappointing first-quarter sales figures, as a result of lower generic consumption on the U.S. market (see United States: 9 May 2008: Barr Posts Lacklustre Q1 Revenue Growth as U.S. Generic Sales Hit Hard). While U.S. demand may be lower, competition for market share among the country's generics producers remains fiercely intense, and Barr will have a key advantage in marketing generic Yasmin. Its status as the first company to file an ANDA for Yasmin ahead of any other generics firm means that—once launched—Barr's version of the contraceptive will benefit from 180 days of market exclusivity, during which it will be the only generic alternative to Bayer Schering's original, branded Yasmin.
Outlook and Implications
Barr has not publicly revealed when it is planning to launch its generic Yasmin on the U.S. market, but it will most likely attempt to do so as quickly as possible. This is because Bayer Schering will almost certainly seek an injunction blocking the company from marketing the drug until the result of the ongoing appeal case is known. The German pharma heavyweight has a lot at stake here; Yasmin is the company's top-selling product, and U.S. sales account for over 30% of the revenue derived from the Yasmin franchise. In 2007, Yasmin's global sales reached 1 billion euro (US$1.6 billion), of which 321 million euro was derived from the United States. Consequently, Bayer Schering can be expected to throw all its legal muscle behind the appeal, and it is expected to have a fairly strong case on several grounds, including the unique composition of drospirenone. If successful, the company could see its market exclusivity for Yasmin preserved until 2020, the year in which the '531 patent was originally meant to expire. Undeterred, Barr has already factored generic Yasmin's sales into its 2008 results, and is confident that the contraceptive will help to boost U.S. sales during the second half of the year.