Drug maker AstraZeneca has seen over £4 billion of value erode from its stock in a day, amidst market fears that the annual sales of one of its established drugs would drop around £600 million, and on news that a promising new drug for the treatment of lung cancer had disappointed trials.
AstraZeneca's stock price plummeted almost 11 per cent after the two disappointments.
Israeli generics company Teva won approval for a generic version of Pulmicort Respules, which is AstraZeneca's asthma drug for children. The drug had posted sales of around £600 million last year. AstraZeneca has inked an agreement with Par Pharmaceutical for an authorised generic version of its own in a bid to combat Teva's onslaught.
The next stage for the war between Teva and AstraZeneca over the Pulmicort Respules patents would see action in court in January 2009.
AstraZeneca also said that late-stage trials of Zactima, its new lung cancer drug, met its goals in combination with a leading chemotherapy treatment, Sanofi-Aventis's Taxotere, but not with another, EliLilly's Alimta. What was worse for the company was that Zactima could not outperform Tarceva, a similar drug already on the market, during the trials.
Meanwhile, the NHS (National Health Service) was reported to be planning a cut of around £550 million annually from its £10.6 billion drug bill, through reforms to medicine pricing. The five-year deal will see a 3.9 per cent cut in the medicines bill in February, with a further 1.9 per cent cut in January 2010, saving £350 million in 2009 and £550 million in 2010.
Opponents of the move say the move is sure to threaten Britain's pharmaceutical industry, even though the reform could mean that other new treatments would be available more quickly and cheaply on the NHS, as companies would have permission to market new drugs at a lower price, and then revise it upwards it if the drug proves effective.
Spending on medicine made up 12.7 per cent of NHS spending in 2006-07.