deb Eisai does not need to 'develop' a generic version of Dacogen. All they have to do is change the NDC number on the package and sell it at a generic price and its a generic. They could get a generic marketing partner if they dont want to do it themselves
However since this drug has subtantial brand sales I am quite sure there will be multiple generic approvals from other companies and the price is likely to drop at least 80% from what the brand is now and since the market share will be split among multiple companies any roylaties will be negiligble.
Watch what happens to Vidaza when the patent expires that will be a good modeling tool.
Thanks Batzem. The market is currently 600M or so, with dacogen having near $240M in sales, so if there's an 80% drop in selling price, that's only $48M market in generic for dacogen. That's sound pretty thin to have multiple companies vying for a piece of it. I'm sure dacogen is not cheap to make, so will the cost to manufacture, maybe keep most generics away from this small market?
Most pharmaceuticals have a 95% margin or higher based on cost of goods. The real expense for branded pharma is the thousands of detail people and R&D. The average generic company only has 5 or so sales people as they dont detail doctors but only call the 20 or so large pharma buyers chains and wholesalers. Their R&D is perhaps 500,000 on average for a typical generic. So a drug that does 240 million is a very attractive target. Also remember the average pharma company has perhaps 5 or 10 major drugs the average generic company sells 100's of different drugs.
So if a drug sells at brand for 100 dollars and costs 5 dollars to produce the same generic selling generically at 20 dollars still cost 5 dollars to produce throws off a nice profit without the massive overhead of a branded company.
<<I'm sure dacogen is not cheap to make, so will the cost to manufacture, maybe keep most generics away from this small market?>>
That's the point that I was trying to make in the original post. Will there be enough profit to generics manufacturers to justify the expense of making it? Also, don't generics makers need to go through an FDA approval process to show that they are selling the same thing as the branded version?
As for EISAI, wouldn't there be some kind of clause in the original partnership agreement that would prevent them from relabeling Dacogen so they can get around paying royalties?