2006 – how was it for you, Glaxo?

Yesterday, Glaxo reported its 2006 financial results… and on the face of it, it was another good year for them – the company had sales of £23.2 billion and made a profit of £7.8 billion for the year. But Seretide/Advair and the Avandia diabetes treatment experienced slowing sales last year. Demand for the two blockbuster drugs — which comprise one fifth of group revenues — has waned recently and both face competition from new market entrants, analysts said.

Glaxo employs over 40,000 people in sales and marketing – so this means that about one in every third person at Glaxo is a salesman. And we mustn’t forget the legions of Ad agencies, PR companies, design companies and the like who are needed to add their expertise to the mix.

Glaxo’s best sellers in 2006 were:

• Seretide
• Avandia
• Lamictal
• Wellbutrin
• Zofran
• Valtrex
• Coreg
• Imigran/Imitrex

What – no Seroxat this year you ask?

Top of the heap in 2005 was Seroxat (Paxil) – but you can see that no longer makes the best seller list anywhere, it was out of patent so everyone can buy the cheaper generic versions. This is a problem for Big Pharma (even though Seroxat actually turned over £620 million in sales in the year!).

This is why Glaxo is driven and develop ‘new’ versions of the their best sellers – like Paxil CR (in the USA). It’s not better for us punters – it’s just better for Glaxo, as they can get a fresh patent on the ‘new’ version, and make more money for longer. One analyst says: ‘Big Pharma spends too much time promoting treatments that are mere variations of top-selling drugs already on the market. That way, the companies make big profits, while spending relatively little on research and development.’

Another way that drug companies can extend the cash generating life of their products is to get them approved for new ‘indications’ – such as Seroxat for OCD; for panic disorder; for social phobia; for GAD and for PTSD. Perhaps soon we may be able to add a new money making indication to the list: seroxat for hypochondria.

Another way that drug companies can extend the cash generating life of their products is to get them approved for say, use in children – God knows Glaxo tried hard enough on this idea with Seroxat.

However, as I’ve said before, the age of the truly innovative blockbuster drug is over and so “…sales growth is coming from an ever widening portfolio of fast-growing products…” said GSK chief executive Jean-Pierre Garnier in the results statement. “We also have very healthy momentum in our pipeline, with 10 new products added to our late-stage development efforts in the last 12 months.” Pharmaceutical companies refer to their portfolio of drugs that are under development as their “pipeline.”

Garnier added: “We now have over 30 significant product opportunities in phase III development or registration, including five major new products planned for launch this year. For all these reasons, we look to the future with confidence.”

I’m glad he looks to the future with confidence – all I see is a desperate scatter gun approach to R&D and a rush to market with a growing number of ‘product opportunities’ – all too many of which won’t be tested properly, probably aren’t even all that safe.

The Big Pharma model is broken. What I say is let’s wait and see exactly how many of Garnier’s ’30 significant product opportunities’ make it to market – and make it without attracting controversy and lawsuits.