Lengthy article on Prozac in Sunday's New York Times business section. SEPR gets a couple of mentions. (Sorry about the formatting. It didn't hold up and the article would take too long to fix.)
nytimes.com
By DAVID J. MORROW
It began one morning 12 years ago, when Matthew, then 24, could barely crawl out of bed. He
persevered at podiatry school in Chicago for six months while becoming increasingly nervous
and agitated. Finally, he saw a psychiatrist. The diagnosis was chronic depression, and the doctor
wrote a prescription for an antidepressant.
Such medications -- Prozac, Zoloft and Paxil are the most widely used -- have truly been wonder
drugs, becoming as much a staple of daily life as Big Macs or Tylenol as they have helped lift the
gloom from the lives of many of the nearly 18 million Americans who the National Institute of
Mental Health says are affected each year by depression.
But they do not work for everyone. Matthew, who spoke on the condition that his last name not be
used, is one of about 3.6 million depressed people who doctors say get no help from existing
medications.
After spending $15,000 of his own money on doctor fees and medication to learn only that lithium is
white, Depakote orange and Prozac yellow and pale green, Matthew, now a medical technician in
Ocean Township, N.J., wonders if he will ever find a cure.
"I'm not that optimistic that a company can develop a drug that can help me," he said, "but I'm
willing to wait and see."
He may not have to wait long. Sometime in the next five years -- perhaps as soon as 2001 -- Eli
Lilly & Co.'s patents on Prozac will expire, and Lilly and a half-dozen other giant pharmaceutical
companies are spending hundreds of millions of dollars in the hope of developing the drug that
supplants Prozac as the market leader.
Sales of antidepressants, meanwhile, are expected to reach $8 billion in the United States at about
the time Lilly loses its exclusive rights to Prozac. So, "there clearly is a lot at stake here," said Bruce
L. Downey, the chief executive of Barr Laboratories, a drug maker involved in a legal fight with Lilly
over the right to produce a generic version of Prozac.
Speaking of Barr's fight with Lilly -- but in a comment that could refer to the whole, bruising race --
he added, "I can guarantee you that in this battle, no stone will be left unthrown."
Still, it is not guaranteed that the Next Big Thing in antidepressants will be a boon for the industry --
or even much help for people like Matthew. Many industry analysts say they expect that any new
brand-name best seller will be a drug that is no more effective than Prozac, but simply has fewer
side effects. Moreover, the introduction of generic Prozac may lead cost-cutting managed health
care companies to require doctors to prescribe it rather than the more expensive antidepressants
under development.
Either of those scenarios would fall short of the hopes of many doctors. To satisfy them, the ultimate
antidepressant would work immediately in every patient, have no side effects and allow patients to
follow simple dosage regimens. It could also be given to manic-depressives without causing a manic
episode.
"People are used to taking Tylenol and feeling better shortly thereafter, not weeks later," said Dr.
Steven E. Hyman, director of the National Institute of Mental Health. "If someone is suicidal, you
may not have weeks."
It is unclear which, if any, of the drugs under development will be Hyman's aspirin for depression.
Some drug makers are taking entirely new approaches to combating depression; the entries from
Novartis, Warner-Lambert and Pfizer are so young they have yet to be named.
In any event, drugs from giant companies are akin to children of blue-blood families: they tend to
succeed even when they are mediocre.
The market is certainly enormous; this year, sales of antidepressants in the United States are
expected to hit $6.3 billion, according to IMS Health, a health care consulting firm. Depression
costs American businesses $23 billion a year in lost work time and productivity, according to the
National Foundation for Depressive Illness, making it one of the nation's most expensive ailments.
It is also one of the most painful. People who cannot be helped by medication are often forced to
live with insomnia, fatigue and a pervasive feeling of despair.
Lilly's corporate headquarters in Indianapolis is on the front lines of the antidepressant battle. Walk
into just about any meeting room there, and one is likely to find executives scratching their heads
over how to survive "Year X" -- when Prozac loses its patent protections.
Exactly when that will happen is unclear, because the separate patents on the drug's chemical
makeup and how it works with a chemical in the brain expire three years apart, beginning in 2001.
Barr Laboratories has applied to the Food and Drug Administration to make a generic Prozac, and
Lilly has sued, contending patent infringement.
Such legal battles can last for years -- particularly when a product as valuable as Prozac is at stake.
Seldom has one brand been so central to a company's success. This year, Prozac will contribute
nearly 30 percent of Lilly's estimated $10 billion in worldwide sales, making it one of the best-selling
drugs ever.
To replace the revenue that will be lost once Prozac's patents expire, Lilly plans to introduce several
new drugs, including two antidepressants and a compound that would relieve the complications of
diabetes.
"We have plenty of strategies in place to prosper in Year X," said Sidney Taurel, Lilly's chief
executive. "The worst scenario that I'm expecting is for earnings gains to fall into the single digits
during Year X and then climb back to double digits the year after."
If the company falls short, however, investors may want a word with Taurel. Many analysts contend
that the race to supplant Prozac should never have begun. Instead, they say, LIlly should have
maintained its stranglehold by developing a replacement for Prozac sooner.
"Several pharmaceutical companies have had a problem replacing the drug that made them famous,"
said Neil Sweig, a pharmaceuticals analyst with Southeast Research Partners, a research firm. "It's a
hard thing to do. One thing in Lilly's favor, though, is that none of the antidepressants that have
come out recently are better than Prozac. This is a fight that is just beginning."
For Lilly shareholders, the big question is how soon Year X will arrive. Sweig forecasts that Lilly
earnings will rise to $2.958 billion in 2000, up nearly 70 percent, excluding extraordinary charges,
from last year's levels. If Prozac has no generic competition in 2001, he says, Lilly's earnings will
increase 16 percent in 2001 and 15 percent more in 2002.
But if generics are able to eat away 50 percent of Prozac's sales, Sweig says Lilly's earnings will be
flat in 2001 before falling about 15 percent a year later.
The introduction of Prozac in 1988 ushered in a new class of drugs that were much more effective
and had fewer side effects than older antidepressants like Elavil and Tofranil. The new drugs,
selective serotonin reuptake inhibitors, or SSRIs, bolster serotonin, a brain chemical believed to be
deficient in some depressed people.
The drugs they largely displaced, a class called tricyclics, had operated by bolstering the levels of
serotonin and norepinephrine in the brain but sometimes caused severe side effects.
No one, including Lilly's top executives, could have predicted Prozac's effect on the world. In less
than 10 years, it played a huge role in making depression a socially acceptable illness.
In 1988, only 130.7 million prescriptions were written in the United States for psychotherapeutics,
which include antidepressants and antipsychotic and anti-anxiety drugs. Prozac, or fluoxetine
hydrochloride, had 1.45 million of the total, according to IMS Health. By last year, the category had
expanded to 232.6 million prescriptions, with Prozac contributing 9.88 million.
With that success, it appears, it was easy for Lilly to get complacent. "It is a valid criticism that we
have a gap in our pipeline," said Dr. August M. Watanabe, executive vice president for science and
technology at Lilly. "But the reason we call Prozac's expiration Year X is because we are not certain
when it is. And we may have plenty of time to develop new drugs."
Lilly has several options to protect Prozac's market, but none are easy. Industry analysts have long
expected the company to license a new version of Prozac from Sepracor Inc., a specialty
pharmaceutical company in Marlborough, Mass., known for improving existing drugs largely by
eliminating their side effects. Such a deal, analysts say, could secure Lilly's franchise, minimizing any
potential loss of sales.
Lilly's chief executive, Taurel, declined to discuss the likelihood of an agreement with Sepracor, and
Sepracor officials also declined, perhaps because no alliance is in the offing. Last week, David P.
Southwell, Sepracor's chief financial officer, said the company was pondering several options for its
purified form of Prozac. Sepracor itself might market the drug, for example, or license it to one of
Lilly's rivals, including Schering-Plough or Johnson & Johnson.
"We have 65 salespeople now," Southwell said. "We didn't have any two months ago. When we
looked at the revenue stream -- we try to get royalties from our products instead of taking cash up
front -- we discovered we'd make more money selling it with this little sales force than if we licensed
it to another company. But we are studying several possibilities."
Another potential problem for Lilly is Barr's challenge on the Prozac patents. If Barr is successful, it
will be allowed to sell a generic version of the drug exclusively for six months before other
competitors can crowd in. Downey expects generic Prozac to take 75 percent of the brand's sales
-- about $2.25 billion -- in those first six months on the market.
Taurel dismissed the notion that Lilly could lose Prozac's patents before 2003. But if he thought he
might lose to Barr in court, he probably could afford to buy himself a little leeway. Because Barr is
relatively tiny, with only $377 million in annual sales, analysts have long speculated that Lilly could
settle the dispute, giving Barr a cash payment of $50 million or so and the right to make generic
Prozac sometime before 2003, but not as soon as if Barr had prevailed in court.
However, a settlement appears unlikely. Downey, who spent 25 years as a trial lawyer, said on
Friday: "My goal is to win and launch. If there is a settlement, that will be up to the other side."
Taurel declined to comment on any of these possibilities.
Any deal-making that sustains Prozac's hold on the marketplace could leave many psychiatrists
dissatisfied. Although doctors generally agree that SSRIs are the best antidepressants yet, they have
complaints about every drug in the category -- Prozac in particular.
Paxil, by SmithKline Beecham; Zoloft, Pfizer's entry in the category, and Celexa, a new SSRI by
Warner-Lambert and Forest Laboratories, can take as long as five weeks to take full effect. Prozac
can, too -- but it takes as long as four weeks to wash out of a patient's bloodstream after use is
discontinued, meaning that doctors must wait that long before prescribing another drug. Prozac can
also cause anxiety at first use.
Moreover, all four drugs, which together control about 96 percent of the American antidepressant
market, can cause sexual dysfunction. Adding to that misery, SSRIs have no therapeutic effect in 20
percent of all cases and cannot be safely mixed with several other commonly used medications.
Prozac "has not always been effective with people on either end of the scale, the ones who are
barely impaired and those who are very ill," said Dr. Donald Klein, director of research at the New
York State Psychiatric Institute. "But Prozac is very effective with people in the middle."
Few drug makers can afford to stumble in the race for a new best-selling antidepressant. Investors
have come to expect quarterly earnings gains of 20 percent or higher from the big pharmaceutical
companies, leaving little room to write off hundreds of millions of dollars in research and
development costs for a drug that does not work.
To avoid such losses, drug companies typically try to develop multiple uses for a single compound.
The trailblazer is this regard was Glaxo Wellcome's antidepressant Wellbutrin, which last year also
began sales as Zyban, a smoking-cessation medication.
With Prozac coming off patent, Lilly has learned to play this game, too. One of its two new
antidepressants is also under development as a treatment for incontinence, an ailment that appears
to be medically unrelated. The drug, duloxetine, is expected to be released in 2001 as an
anti-incontinence pill and a year later as an antidepressant.
Some Lilly rivals say that the plans for duloxetine are a sign of desperation -- that it is a lackluster
antidepressant being trotted out to market only because the company lacked a more formidable
replacement for Prozac.
Lilly officials acknowledge that they took another look at duloxetine because of the approach of
Year X, but they say the later, more accurate tests proved the drug a more effective antidepressant
than had been originally believed.
Lilly says it also hopes that duloxetine will take effect more quickly than Prozac. But it is unlikely to
be as popular. Watanabe described duloxetine as similar to Effexor, the new antidepressant of
American Home Products. Yet, Effexor has earned less than 4 percent of the national
antidepressant market since its introduction in 1993.
The problem, doctors say, is that when patients are satisfied with an antidepressant they often refuse
to switch, even to something that is better.
Lilly's other new antidepressant is a combination of Prozac and Zyprexa, its enormously successful
antipsychotic drug. In a pilot study of 30 people who had been treated unsuccessfully with two
antidepressants, one group received Prozac, another was given a placebo and a third group was
given the Prozac-Zyprexa combination. The group receiving the combination had a sharply higher
response, Lilly discovered, than those who had been given Prozac alone or a placebo.
But the FDA gives closer scrutiny to any combination of drugs because of possible interactions, so
combining Zyprexa with Prozac could invite regulatory delay.
Two other drugs under development appear to offer more hope of being the kind of compound
desired by both market analysts and doctors. Merck and Novartis are among the companies
working on one of them, which would introduce a completely new class of antidepressant.
Instead of raising levels of certain chemicals in the brain, as the SSRIs and other antidepressants do,
this type of drug blocks receptors of a chemical, known as Substance P, that is believed to affect
depression. Scientists discovered that by blocking the Substance P receptors, they might treat
everything from migranes to anxiety.
In the initial phases of trials on humans, Merck's drug has shown promising results. In a recent
six-week study, 213 people with moderate to severe depression were given the Substance P
blocker, a placebo or Paxil. Merck's drug reduced depression as effectively as Paxil, without many
of the side effects -- notably sexual dysfunction.
"It's a novel way of treating depression, but we are still in the early days of the program," said Dr.
Scott Reines, vice president for clinical research at Merck. "It's too early to tell if it will work with
severely depressed people. And there's no way we can say when it will be coming out."
The other contender appears to be Sepracor's new purified Prozac compound, even though some
doctors are skeptical about its effectiveness.
The drug has two enormous advantages: It will always be known as improved Prozac, regardless of
which company sells it. And it has a better chance of approval by the FDA, given that the original
version of Prozac has been safely administered to millions of patients in the last 10 years.
"Hopefully, it will be have a quicker wash-out and substantially less drug-to-drug interaction,"
Southwell, the Sepracor official, said.
Still, the company that develops the next big antidepressant must be able to sell it. Sepracor's sales
force of 65 is hardly competition for Lilly's troop of 2,400.
Now that the FDA is permitting direct-to-consumer advertisements of prescription drugs, any major
pharmaceutical company could drum up a market for a new antidepressant with a big advertising
campaign. Sepracor lacks the deep pockets for that, but Johnson & Johnson and Schering-Plough,
with which Sepracor may reach a licensing deal, are both shrewd television marketers.
Schering used television ads to build a market for its Claritin antihistamine, which is expected to
have $3 billion in sales this year, with 58 percent of the American antihistamine market. Johnson &
Johnson is one of the best known and respected consumer brands in the world.
Lilly, by contrast, with far less background in consumer marketing, ran its first television ads on
depression two months ago. But Taurel says he is ready to take more risks and may advertise more
ot its wares where appropriate, to prop up Lilly's sales.
Doctors are watching the corporate dogfight with amusement. Lilly had no clue that Prozac would
be such an enormous success, and the owner of the next giant antidepressant will probably not
instantly grasp the full value of its test-tube contents, either.
"You may never know where the next antidepressant may come from," Hyman said. "So don't be so
leery of a drug that is an antidepressant now when it was originally created to treat something else.
One of the first antidepressants, iproniazid, was originally invented to treat tuberculosis." |
