If you've picked up a prescription at your pharmacy anytime recently, or have been administered prescription medicines in your doctor's office or at a hospital, you probably don't need me telling you that they're exceptionally pricey (and growing pricier by the year).
However, on the other side of the coin, brand-name prescription drugs are what keep the lights on for drugmakers. Pharmaceutical and biotech companies rely heavily on the pricing power of their approved therapies in order to stay ahead of inflation, as well as fuel the cash flow that's needed to power additional innovation and possible business development (e.g., mergers and acquisitions).
Among the bounty of approved Food and Drug Administration drugs is the crème de la crème: blockbusters. A blockbuster drug is one that generates $1 billion or more in annual sales. The more blockbuster drugs in a drugmakers' pipeline, the more profitable it probably is, and the more cash flow it should be generating.
The best-selling prescription drugs of all-time
However, some drugs are literally in a class of their own. I'm talking about drugs that are or were generating $5 billion or more in annual sales regularly for years, if not longer than a decade. These upper echelon drugs are often what keep pharmaceutical and biotech companies relevant to investors and are what keep their growth engines churning.
Of course, as is the case with all brand-name drugs, patent expirations eventually allow generic competitors to enter the market, dramatically slowing legacy sales. Nonetheless, some brand-name prescription drugs have racked up some exceptional all-time sales figures. Utilizing the lifetime sales of over one-dozen top-selling branded drugs provided by Forbes between 1996 and 2012 and company reported sales data between 2013 and 2016, here are the 19 best-selling prescription drugs of all-time.
|Product||Approval Year||Lifetime Sales Through 2016 (in Millions)|
Some intriguing observations
One number that probably jumps out and grabs you is Lipitor's lifetime sales. Pfizer (NYSE: PFE), the drug giant behind Lipitor, milked its cholesterol-lowering drug for every last drop of revenue prior to its patent expiration earlier this decade. However, Lipitor still lives on for Pfizer as a blockbuster drug, with most of its sales coming from China and overseas markets. Lipitor still generated $1.76 billion in sales for Pfizer in 2016, pushing its lifetime sales to $148.7 billion!
Another lifetime sales figure that should really stand out is AbbVie's (NYSE: ABBV) anti-inflammatory drug Humira, which is currently in second place with $95.6 billion in lifetime sales. This $53 billion gap between Humira and Lipitor might appear insurmountable, but it's possible that Humira could pass Lipitor by as early as 2020 for the title of most lifetime sales. Humira is approved in 10 indications, and it generated more than $16 billion in sales for AbbVie last year alone (the single-best year for a prescription drug on record). The big question mark is whether AbbVie can keep biosimilar competition on the sidelines. If it can, Humira has a path to become the best-selling drug ever.
In terms of trends, you might note that many of these brand-name drugs treat specialized diseases. In other words, they treat cancer, an autoimmune disease, or some other specialized ailment. Specialized drug prices have been growing in leaps and bounds in recent years, which means that volume may not necessarily be driving sales of these therapies higher so much as price hikes. A good example would be Amgen's (NASDAQ: AMGN) anti-inflammatory drug Enbrel, which grew revenue by 14% in 2016, but actually had units sold of the drug fall by 6% year-over-year. This means price increases drove its 14% total growth.
Finally, it's worth pointing out that some of these drugs are still chugging along with huge annual sales figures, while others have all but disappeared from the spectrum. Aside from Humira's $16 billion in sales in 2016, Merck's Januvia, Sanofi's Lantus, and Roche's Avastin, Herceptin, and Rituxan/MabThera, all generated north of $6 billion in sales in 2016. On the other hand, Bristol-Myers Squibb's Abilify, Eli Lilly's Zyprexa, AstraZeneca's Seroquel, and Merck's Singulair all totaled less than $1 billion in sales last year.
The Trump factor
Perhaps the biggest question mark for these best-selling drugs is what their future might hold with Donald Trump as president. In years past, Congress more or less swept pricing issues under the rug. Trump has considered taking a more proactive approach, having noted on multiple occasions that he would lower prescription drug prices while president.
One of the biggest obstacles for Trump is that he probably can't tackle prescription drug pricing reform until he's resolved a number of other issues on his plate. This includes taking care of the passage of his healthcare plan, as well as tax and trade reform. It's unlikely that Trump will be serious about reforming prescription drug prices until these other issues are dealt with.
It also remains to be seen if Trump's ideas are even feasible. Trump has previously opined that he would substantially deregulate the Food and Drug Administration, as well as allow consumers to purchase prescription drugs in foreign markets. It's no secret that drugmakers subsidize their sales in foreign markets by pricing their drugs high in the U.S., which is why Trump wants to allow consumers the opportunity to buy brand-name drugs from foreign markets. The concern with Trump's plan is that FDA reform may not be possible to the extent he desires. The FDA has certain checks and balances in place to preserve the manufacturing safety of drugs sold. By importing drugs, it would completely circumvent these safety protocols.
It's pretty clear that Trump doesn't want to sweep prescription drug reform under the rug during his presidency, but it's unlikely that we'll see many of these best-selling drugs struggling to thrive while he's in the Oval Office.
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