Prescription drug sales topped $140 billion last year, compared with $121.7 billion in 1999, according to data collected by the National Association of Chain Drug Stores. That figure represents a 15 percent gain in one year. And while chain drug stores continued to draw the largest slice of the prescription drug sales pie–with a better-than 42 percent share of all retail pharmacy dollars–mail order and food stores gained steadily last year.
Most industry experts expected these trends. “Over the last decade, the top three growing prescription drug sales channels have been mail service, clinics and food stores,” said Doug Long, vice president of industry relations for IMS Health.
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The drivers behind these trends are readily explained. “In this atmosphere of rising prescription utilization, especially chronic diseases, a 90-day mail-order prescription can save money,” Long said. “Mail order drug sales through the institutional markets, such as oncology, dialysis and radiology clinics, are being driven by the switch from in-patient to out-patient care. Long-term care facilities are also driving sales due to the combination of the growing senior population and out-patient care for both seniors and others who are increasingly receiving long-term care at home.”
This combination of factors caused the mail order side of the retail pharmacy business to climb more than 24 percent in 2000, generating sales of $20.6 billion. With better than 14 percent of the total dollar universe, mail order ranks as the third-highest volume producer in retail pharmacy, just behind independent drug stores but a step ahead of both food and mass chains.
As for food/drug combo stores, Long noted, “Supermarkets offer the convenience of one-stop shopping. Most new supermarkets now, particularly in the southern and western parts of the country, won’t open without a pharmacy.” Supermarket pharmacy grew sales 25.7 percent last year, reaching the $16.9 billion mark.
Still, the traditional drug channel controls the lion’s share of the business with 64 percent of the total pharmacy ring at retail. Drug stores sold just over $90 billion worth of prescription drugs in 2000. However, drug chains continued to outpace their independent counterparts, nearly doubling the rate of growth actualized by independent pharmacy outlets in 2000.
Long-term care leads script volume
Compared with drug chains, independent pharmacies and mail-order channels, food stores showed the biggest gain in script volume between 1999 and 2000. At over 389 million, prescriptions generated by food-store pharmacies rose nearly 9 percent last year. In terms of growing total script count, drug chains were close behind, filling 7.1 percent more prescriptions last year than the year before. Of course, drug chains continue to control the dominant share of the total prescriptions filled in retail pharmacy with 47 percent of the market. Factor in independent pharmacy–where, albeit, growth was all but flat in 2000–and the overall drug channel accounted for 71 percent of all scripts filled at retail last year.
The largest percentage gain in script volume was shown in the long-term care channel. With almost 137 million prescriptions in 2000, long-term care script volume grew 19 percent from 1999, according to figures compiled by IMS Health. This figure will likely increase each year as waves of the U.S. population continue to approach retirement age.
Prilosec holds lead, Norvasc falls to Glucophage
The top 10 selling prescription drugs in the United States made registers ring to the tune of almost $20 billion dollars, barring sales through mail order. AstraZeneca’s purple giant Prilosec (omeprazole), indicated for gastroesophageal reflux disease still leads the pack in total brick-and-mortar pharmacy sales. Prilosec accounted for more than $3.4 billion in sales in 2000, up 8 percent from 1999. AstraZeneca has since introduced potential successor Nexium (esomeprazole magnesium), in anticipation of Prilosec’s patent expiration this fall. Many generic companies are bucking at the chance to offer an off-label version of Prilosec.
“Generics’ share of prescriptions has been flat for the last five or six years,” Long said. “The reason it has been flat is because a lot of brand names haven’t been coming off patent. There have also been new generations of drugs; many people who were taking naproxen, for example, were moved to Celebrex and Vioxx, and the same with some antibiotics. But there are some big name drugs coming off patent in the next year and a half.”
According to IMS Health, most of 1999’s top sellers held their ground, with some exceptions. TAP Holdings’ heart-burn drug Prevacid (lansoporazole) outsold Lilly’s anti-anxiety drug Prozac (fluoxetine) and claimed third place in 2000, although Prozac is poised to come off patent soon. Pharmacia’s blockbuster arthritis treatment Celebrex (celecoxib) climbed from ninth place in 1999 to sixth in 2000. Consumers bought over $1.6 billion worth of this COX-II inhibitor in 2000, up 44 percent from 1999. Schering-Plough’s ubiquitous allergy drug Claritin (loratadine) fell two notches from seventh to ninth place, and Bristol-Myers Squibb’s insulin sensitizer Glucophage (metformin) knocked Pfizer’s blood pressure drug Norvasc (amlodipine) out of the top 10 with $1.8 billion in 2000 sales.