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A Profitable Prescription

5 minute read
CHARLES P. WALLACE Berlin

Talk about great timing. With one of the worst outbreaks of influenza in a decade sending people around the world to bed with bouts of coughing, fever and chills, it’s hard to imagine a better moment to offer the public a simple treatment more effective than that old standby, aspirin. That serendipity has not been lost on two of Europe’s biggest drug companies, which have begun battling it out for market share with new high-tech drugs designed to combat the flu virus itself, rather than just its symptoms.

So far, Glaxo Wellcome of Britain has taken an early lead with its drug, Relenza, which was introduced last August in the U.S., and in subsequent months across Europe and in Japan. Its rival, F. Hoffmann-La Roche of Switzerland, introduced Tamiflu in October, but so far has won regulatory approval only in the U.S., Canada and Switzerland. Sales figures from the U.S. show that Tamiflu has begun to overtake Relenza as the drug of choice, despite its late arrival on the market.

Both drugs are what are termed neuraminidase inhibitors, meaning that they inhibit an enzyme that is necessary for the flu virus to replicate in the body. The difference between the drugs is that Relenza, which the British company markets under license from Australian drugmaker Biota Holdings, is taken by an inhaler directly into the lungs, while Tamiflu, which the Swiss firm licenses from its California developer, is available as a more convenient pill. Both medicines have to be taken within 48 hours of the onset of flu symptoms to be effective, and are said by the companies to be able to cut the duration of the illness by up to 40%, as well as easing the symptoms.

Although both companies acknowledge timing the release of their drugs for the annual flu season, this year’s epidemic has provided an unexpected publicity bonanza–crucial in Europe, where advertising prescription drugs is illegal. Glaxo says about 500,000 prescriptions for Relenza were written worldwide in December, with sales in Italy almost as large as those in the U.S. One pharmaceuticals industry analyst said that in the last week of December, sales of Tamiflu in the U.S. market had reached 77,000 prescriptions, just ahead of Relenza’s 75,000. “We’re seeing very strong initial sales,” said Jacqueline Wallach, a spokeswoman for Roche.

It’s no wonder sales are off to a fast start. France has reported more than 3 million flu cases so far, with Paris particularly badly hit. Two million Italians have come down with the illness, termed “the Moscow grippe,” while in the Netherlands flu cases were running nine times normal levels. The flu also has badly hit southern German states as well as Denmark and Finland. In Britain, packed emergency rooms and a shortage of beds in intensive care units have turned the flu into a political football. Prime Minister Tony Blair had pledged to combat overcrowding in National Health Service hospitals, and the Tory opposition was quick to pounce on reports of patients being shuttled around the country in search of treatment.

Glaxo seems to be arguing that the government’s dilemma was of its own making, since the NHS recommended last October that doctors not prescribe the drug. Last week, Glaxo appealed to the NHS to reconsider its guidance to doctors. “The NHS has limited options at the moment,” said Glaxo spokesman Rob Cohen. “Relenza could help the NHS deal with overcrowding in hospitals during the current epidemic.” Glaxo also said that since the drug was not banned by the NHS British doctors were still writing prescriptions for Relenza, which costs $40 for a course of treatment, and that patients could still claim reimbursement by the health service.

Thanks to the increased attention for Relenza and speculation that Glaxo might merge with another drug company, the firm’s share price rose by nearly 10% in the last week. The U.S. stockbroker Hambrecht & Quist raised its rating on Glaxo to “buy” last week, with one stockbroker declaring in his report: “Relenza recently bailed one of these analysts out of a potential week-long bout of flu so this opinion might be slightly biased.” The company estimated Glaxo’s income for the drug at $142 million in 2000, rising to $322 million next year. Mark Brewer, an analyst at Dresdner Kleinwort Benson in London, noted that even with peak sales of 75,000 prescriptions a week, that represents a return of only about $2.8 million. “It’s not going to be a blockbuster,” he said, “and it’s a very seasonal drug.”

Another key factor is likely to be whether national social security programs decide to pay for the treatment. So far only Ireland, Germany and Sweden have agreed to cough up. One thing for sure, the companies have already won the publicity battle. If the flu keeps spreading as it has, the two drugmakers should have no trouble making their products into household names

For links to other Web resources on influenza, visit our list of influenza-related websites.

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