GSK and MSD (Merck in the US) will reduce the price of their HPV vaccines, which protect against cervical cancer, in the world’s poorest countries.

The two pharma giants have allied to help improve access to HPV prevention in parts of the world where about 275,000 women die from cervical cancer each year.

The low price, about $4.50 per dose, will initially apply to a few million doses made available in Kenya, Ghana, Laos and Madagascar.

The alliance aims to have made the vaccines available to protect 30 million girls in 40 countries by 2020.

In the US, where the vaccine costs $130 per dose, the Center for Disease Control has described the uptake rate as “unacceptably low”. The reduced prices may result in uptake rate in the world’s poorest countries exceeding the US rate.

Dr Seth Berkeley, the alliance’s CEO, described the reduced price as a “ceiling” and predicted that it would drop further due to generic competition from companies in India and China.

The lowest current price for HPV vaccines is $13, paid by the Pan American Health Organization, which supplies medicines to Latin American countries.

The impact of the HPV vaccines could be increased by giving them to younger girls: only two doses are needed to immunise girls aged 9–13, but three are needed for teenage girls.

Both GSK’s Cervarix and MSD’s Gardasil protect against the strands of HPV (human papilloma virus) that cause cervical cancer, though Gardasil also protects against genital warts.

Novartis has warned the Government to reduce R&D bureaucracy to increase innovation or it will move its UK operations overseas.

Jon Symonds, Global Finance Director of Novartis, said that Britain is losing its competitive edge to emerging markets and called for the Government to streamline its R&D approach.

“One of the characteristics of the UK is a very low up-take on innovation. Sitting in another part of the business allocating my resources, if we don’t see the up-take in the UK resources will be allocated elsewhere,” said Mr Symonds.

To address the issue the pharmaceutical giant has arranged a meeting of scientists, NHS trustees and Government officials in London.

Novartis allocates around $10bn globally to research and development a year. Speaking in The Telegraph Mr Symonds said it usually costs a pharma company around $1bn to bring a new drug to market. However, he added there’s only a small window of opportunity to recoup this investment before products are exposed to generic competition.

Mr Symonds is expected to tell attendees at the crisis meeting that “the placement of research is increasingly globally competitive: we can and must make choices over where we invest.”

He will highlight how the Swiss-based company has chosen to invest in Shanghai, Russia and Brazil because the “one thing these markets have in common is that they have each recognised the need to shift from being a consumer of innovation to a generator of innovation.”

A withdrawal by Novartis would be another blow to the UK pharma industry. Pfizer cut 2,400 jobs last year when it closed R&D activities at its facility in Sandwich, Kent. Novartis UK currently employs around 3,500 people across eight sites.

Ana Nicholls, Healthcare Analyst at the Economist Intelligence Unit, said that Novartis is right to warn the Government over its prolong R&D processes – especially at a time when emerging markets are making “determined efforts to boost innovations in their pharma industries.”

She added that the Government has tried to make the “UK more attractive for pharma R&D” through schemes such as the Patent Box and with its proposed changes to the Patents Act. But she warned “Novartis wants the Government to go further and streamline the whole trial and approval process – a push that will no doubt be supported by GSK, AstraZeneca and others.”

Novartis is expected to overtake Pfizer and become the biggest manufacturer of prescription medicines by 2018, according to new consensus data.

Research by EvaluatePharma estimates Novartis will record sales of more than $50bn in six years’ time, with its eye care business Alcon and generic unit Sandoz driving growth.

But the outlook is not good for US-based companies with only Pfizer remaining in the top five by 2018 and Sanofi, GSK and Roche maintaining a strong presence.

Data found that despite generic competition on Diovan and Glivec and disappointment from key projects such as Gilenya and its new respiratory franchise, Novartis is expected to record annual growth between 2011 and 2018 of 1.2%.

This is in contrast with AstraZeneca whose annual sales are expected to drop from $32.4bn in 2011 to $22.1bn in 2018 representing a negative growth of 5.3%.

Gilead Sciences is expected to experience the biggest increase in annual growth of the top fifteen companies with data showing sales will rise from $8.1bn to $15.7bn at a rate of 9.9% per year.

Novo Nordisk is also forecast to enter the top 15 ranked companies for the first time due to an increasing demand for its diabetes medicines. Annual growth is expected to be 7% until 2018 with sales totalling nearly $20bn.

One of the biggest casualties, data found, will be Eli Lilly. The Indianapolis research-based company currently claims to be the 10th biggest pharmaceutical company in the world. But Lilly fails to make the top 15 companies after research found a drop in sales will see it fall to 17th place by 2018. But researchers did note that Lilly’s Alzheimer’s candidate, solanezumab, could reverse the trend if it successfully enters the lucrative market.

Lilly will be replaced in the list by German healthcare giant Bayer, which also enters the top 15 global companies for the first time, with annual sales of around $16.5bn by 2018 boosted by Xarelto.

AstraZeneca saw revenue fall by 11% in the first quarter of 2012 after generic competition hit the company hard.

Sales amounted to $7.349 billion after several key brands lost exclusivity, which accounted for an 8% decline in revenue. Reported operating profit, profit before tax and earnings per share were also down by more than a third.

David Brennan, Chief Executive Officer, says the “anticipated impact” of generic competition “has made for a difficult start to the year”.

Revenues were down in the US (12%), Western Europe (21%) and in Established Rest of the World (6%) and Emerging Rest of the World (1%); however, emerging markets did see a 1% increase.

In the US, revenue was down from $3.3bn in Q1 2011 to $2.9bn in the same period this year. Generic competition on Seroquel IR accounted for $223 million of the $384m loss. Growth was recorded for Onglyza, Seroquel XR and Symbicort. However, this was offset by a decline in sales of Nexium and a loss of protection for Toprol-XL, Arimidex and Merrem.

Sales were down further in Western Europe where generic competition for Nexium, Arimidex and Merrem accounted for nearly 60% of lost revenue. In Japan sales were down by a tenth, and in Canada by 8%.

An increase in revenue in China by 13% helped sales increase in emerging markets as AZ again faced the loss of patent protection for Crestor and Seroquel in Brazil and government interventions in price in Turkey.

AZ also lost $702 million in restructuring costs in Q1 as it undertook the third phase of the $2.1bn efficiency programme it revealed in February 2012. It anticipates that total restructuring costs will be absorbed this year in order to save $1.6bn by the end of 2014.

The disappointing results were published on the same day that David Brennan revealed plans to retire from his position on 1 June 2012.

Ana Nicholls, Analyst, Economist Intelligence Unit, says his decision to stand down is no real surprise. “Investors have long been dissatisfied with AstraZeneca’s efforts to cope with these challenges, despite its efforts to keep them onside,” she commented.

“Managers are aware they also need to step up their expansion into emerging markets that hold better growth prospects. Given this, and AstraZeneca’s fairly health cash pile, the company is under pressure to make acquisitions to help sustain growth – it is Mr Brennan’s failure to do this that has forced him into retirement.”

As a result of the Q1 figures, AstraZeneca readjusted its 2012 outlook and expects the decline in revenue will be in the range of the low to mid-teens.

Eli Lilly Chief Executive John Lechleiter believes his company needs to focus on exploiting the potential of its pipeline instead of making drastic cost savings to overcome revenue loss.

Speaking at the annual meeting of the Pharmaceutical Research and Manufacturers of America in Boston, the CEO said that savings alone would not be enough to tackle the challenges of generic competition on its two main products.

“I don’t think we can save our way out of the enormous challenge we face,” he said. “The best course is to maintain our focus on advancing our pipeline.”

Lilly expects to lose up to $3bn this year after its psychotic disorder drug Zyprexa lost patent protection in a number of major markets. Gemzar was also exposed to generic competition for the first time last year. Exclusivity for its depression treatment Cymbalta is also set to end in 2013.

The company’s leading experimental product is solanezumab, used to treat Alzheimer’s disease. It is currently in Phase III trials. Analysts have predicted the drug could be a “lottery ticket” for Lilly if approved, and generate sales of up to $9 billion by 2020.

Mr Lechleiter insists the success of solanezumab will not define the future of the pharmaceutical company and revealed the company was developing other treatments for Alzheimer’s. “Lilly’s future does not depend on solanezumab,” he said. “While we hope the molecules that we take into Phase 3 will be successful, we’ve said all along this is a high-risk program.

“We have other approaches and other molecules in our pipeline that we will continue to move forward.”

Despite the CEO’s savings claim, Lilly decided to impose a global salary freeze for the majority of its employees to help it manage the ‘patent cliff’ in February 2012.

NHS spending on drugs fell in 2011 due to patent expiry affecting a number of major products – and 2012 will see the trend accelerate.

The NHS in England spent £8.81bn on prescription drugs in primary care last year, compared to £8.83bn in 2010, according to the NHS Information Centre.

This fall, which reflects pressure on GPs to reduce their drug budgets, contrasts with the previous trend of drug spending increasing by 3–4% each year.

Therapy areas where the NHS pharmaceutical market was strongly affected by patent expiry in 2011 include cardiovascular care and CNS disorders – while diabetes care showed a new trend towards the selection of cheaper drug classes.

Cardiovascular drugs showed the steepest drop in sales: from £1.51bn in 2010 to £1.35bn in 2011. A major factor in this was the generic erosion of the anti-platelet drug Plavix from Sanofi and BMS, revenues from which fell from £46m to £12m.

By contrast, NHS spending on Pfizer’s statin Lipitor increased by £5m to a massive £310.8m – but that blockbuster will fall over the patent cliff in May, with wholesale shifting of GPs to generic versions expected.

The NHS spent £1.95bn on drugs for CNS disorders last year, but this therapy area is facing major generic erosion due to the recent patent expiry of AstraZeneca’s antipsychotic Seroquel and Pfizer and Eisai’s Alzheimer’s drug Aricept, which between them cost the NHS £170m in 2011.

In diabetes care, growing demand and the impact of new treatments is balanced by growing cost pressure forcing a retreat to older and cheaper drugs.

On the one hand, spending on Novo Nordisk’s new injectable GLP-1 drug Victoza increased from £9.6m to £21.9m last year, while AstraZeneca’s new oral medicine Januvia saw its revenue rise from £27m to £45m.

On the other hand, NHS spending on Novo Nordisk’s fast-acting insulin NovoRapid fell from £63.4m to £62.7m last year, due to pressure from the National Prescribing Centre to switch to the cheaper isophane insulin.

The UK pharmaceutical market thus faces both generic erosion and a new trend towards the choice of drug classes that reduce costs, but may not represent the standard of care.

Belgian biopharma company UCB has predicted that patent expiry will strongly affect its European growth in 2012.

While UCB’s blockbuster epilepsy drug Keppra faced little generic competition in Europe following its patent expiry in 2011, the company predicts a 50% sales fall for the product in 2012.

However, the company’s CEO said its focus on severe diseases of the immune system and CNS has helped to insulate it against economic austerity.

UCB saw its revenues rise by 1% to €3.25bn in 2011, but predicts a fall of nearly 5% to €3.1bn in 2012.

According to a UCB spokesman, Keppra faces competition from more than 100 generic substitutes in 2012, and its European sales can be expected to fall by 50%.

Delays in the launch of generic alternatives protected Keppra in 2011, when its global sales increased by 3% despite its patent expiry.

UCB’s CEO, Roch Doliveux, said that its commitment to therapy areas such as epilepsy and immunology had shielded the company from the impact of European austerity: “We still have the means in Europe for many years to come to pay for severe healthcare issues, and that’s what we’re addressing.”

Last year, UCB benefited from increased sales of three products: Vimpat for epilepsy, Neupro for Parkinson’s disease and restless legs syndrome, and Cimzia for Crohn’s disease and rheumatoid arthritis (RA).

Doliveux also argued that value-based pricing – due to be adopted by the NHS in 2014 – is not a good model to support innovation. He argued that the current PPRS system is “a very robust system that a lot of countries have tried to copy, and PPRS works well.”

Among non-UK companies, UCB is the leading non-British investor in UK pharmaceutical R&D.

Regulations favouring generic products and wider health insurance coverage by governments and private bodies are expected to boost generic consumption, analysts predict.

Frost & Sullivan expect the generic pharmaceutical market to peak this year after the patent cliff left ‘blockbuster’ drugs worth $150 billion facing generic competition.

Aiswariya Chidambaram, Research Analyst at Frost & Sullivan, said there were lucrative opportunities for generic manufacturers and “careful choice of product segments and appropriate time of entry” will allow them to “sustain amidst intense competition”.

The global generic market was estimated to be worth $123.85 billion in 2010, growing at an annual rate of nearly ten per cent.

The US, Germany, UK, France, Japan, Canada, Italy and Spain are the top eight global markets and account for 80% of total worldwide sales.

In Europe, high generic penetration in Germany and the UK provides very little growth opportunity. Markets such as France, Italy and Spain do offer growth opportunities, but researchers warn pricing policies, incentive schemes and regulatory frameworks pose market access challenges.

The two largest therapeutic areas are currently Central Nervous System and cardiovascular, accounting for nearly 38% of the global market. However, analysts predict rheumatology, oncology and respiratory are likely to witness significant growth in coming years.

Analysts predict that the diversification of product portfolios, vertical integration across the value chain and the potential of emerging markets will be the main drivers of acquisitions growth by generic companies.

Also, an increase in the number of partnership deals by generic companies is expected by Frost & Sullivan in the future as reliance upon M&A, rather than organic growth to compete against industry competitors is sought.

Global revenues from small-molecule targeted cancer therapies are expected to reach $27.3bn in 2015, a new report predicts.

visiongain’s Small-Molecule Targeted Cancer Therapies: World Market 2011-2021 found that the overall market generated $20.3bn last year but is set to grow as more patients are diagnosed with cancer.

Dr Syed Ahmed, a senior healthcare industry analyst, visiongain, says there is still “an under-met need for therapeutic agents” and the therapies “remain a crucial part of the pharmaceutical market from 2011 to 2021.”

The report found that there were more than 13 million patients worldwide diagnosed with cancer in 2009. But there may be as many as 20 million new cases by 2025, it says.

Targeted cancer therapies block the growth and spread of tumours by interfering with with molecules involved in tumour growth and progression. Most of these are either small-molecule drugs or monoclonal antibodies.

The market is currently dominated by Novartis’ Glivec/Gleevec (pictured), the report says, but ‘blockbuster’ brands are set to lose their patent protection in the next ten years paving the way for generic competition.

“A strong R&D pipeline for small-molecule cancer therapies makes this industry segment dynamic and promising for pharmaceutical companies," said a report analyst.

Sales increased more than 10% at Sanofi in the third quarter to €8.7 billion, despite the loss of €471 million due to generic competition compared to the same period a year ago.

Total sales grew 10.1% along with an 11% increase in growth platforms after strong performances in its diabetes, vaccines and consumer health divisions.

Christopher A. Viehbacher, Sanofi CEO, says the return to growth in sales and earnings is an “important milestone as the company progressively puts the patent cliff behind it”.

Growth platforms and Genzyme accounted for 68.5% of total sales after the recently acquired business recorded sales up 6.9% to €768 million.

Pharmaceutical net sales were up a tenth to €6.9 billion and helped year-to-date net sales rise 5.5% to €20 billion, despite generic competition to Lovenox, Ambien CR and Taxotere in the US and Plavix (pictured) and Taxotere in the EU plus the impact of US healthcare reform and EU austerity measures.

Its diabetes division was driven by a strong US and Emerging Markets performance which resulted in a 12.4% increase in sales after Lantus recorded growth of 14.6% and 23.4%, in respective markets. Growth in Sanofi’s vaccine division also increased 16.7% after a solid demand for seasonal flu medication in the US.

The Sanofi Group now expects 2011 business net income to be between 2%-5% lower than last year’s total. “We continue to make strong progress in R&D with the submission of five new products and also in the tight control of our costs,” said Mr Viehbacher.

It was reported this week that Sanofi is set to overtake Pfizer as the world’s biggest pharmaceutical company by 2016.

Submissions have been recently filed for Lyxumia (lixisenatide) in the EU, Aubagio (teriflunomide) and Zaltrap (aflibercept) in the US; Visamerin/Mulsevo (semuloparin) in the US and EU; plus Kynamro (mipomersen) in the EU.

The company released its Q3 performance on the day it announced it was cutting jobs in its US R&D and sales divisions.