Repackaged Generics

Mirror Image: How Pharma Repackages Generics

For twenty years now, as a blockbuster drug is becoming generic, a trick of Big Pharma is to take their drug and cut it in half and re-launch it as a new drug. Case in point: Prilosec. AstraZeneca launched Prilosec in 1989 as the first prescription proton pump inhibitor (for acid reflux). It was the original “purple pill”. By 1998, Prilosec became the first drug to hit $5 billion per year in worldwide sales. Knowing that they would lose this tremendous cash flow when Prilosec would become generic in 2001, the company formed an internal team of marketers, lawyers, and scientists called the Shark Fin Project (to simulate the sales chart if they did nothing, an inverted V).

When Prilosec’s U.S. patent expired in April 2001, AstraZeneca launched esomeprazole (Nexium) as its replacement. Look at the chemical names of these drugs. Prilosec is omeprazole. Nexium is esomeprazole. It turns out that many drug molecules tend to have a left half and a right half, often balancing each other. And usually it is only one half that gives the most benefit. Big Pharma does have the technology to ‘cut the molecule in half’ and get rid of the less active half. In doing so, they sometimes find a very marginal improvement in efficacy or a slight decrease in side effects. This has been done for many blockbuster drugs. In clinical studies, Nexium showed 90% healing after four weeks compared to Prilosec 87% healing. Furthermore AstraZeneca did not publish the two studies which showed no difference in the drugs. In 2012 AstraZeneca settled a class action lawsuit that claimed that AstraZeneca’s deceptive marketing misled doctors to prescribe Nexium under the mistaken belief that it was superior to Prilosec. But prescription Nexium continues as a blockbuster. It currently sells for $11 a pill, while omeprazole (generic of Prilosec) is less than a dollar a pill. In 2013 Nexium continued to have sales of $3.8 billion. Not bad for half a drug.