New Generics Pose Potential Shake-up for Prescription Sleep Medications, Antihypertensives; Patients Could See Big Payoff

FRANKLIN LAKES, N.J., March 5 /PRNewswire-FirstCall/ -- Patients suffering from insomnia and high blood pressure may soon be able to sleep a little bit better thanks to the pending expiration of patents on a number of widely used prescription drugs expected in 2007; and if a new analysis of the use of generic prescription drugs is any indication, the savings could be significant.

According to the analysis by Medco Health Solutions, Inc. (NYSE: MHS) , the nation's leading pharmacy benefit manager (PBM), 55.2 percent of all medications dispensed to Medco members in 2006 were for generic medications -- a 3.7 percentage point increase over the generic dispensing rate (GDR) of 2005. The analysis found that Medco's generic dispensing rate has increased 14.7 percent since 2002. According to IMS Health, a one percent increase in generic utilization nationwide yields almost $4 billion in savings.

"There are an unprecedented number of brand name drugs going off patent representing more than $49 billion in sales through 2011," said Laizer Kornwasser, senior vice president of channel and generic strategy at Medco. "The savings opportunity for patients and payors is enormous and it's happening as Americans are recognizing that generic counterparts to these brand drugs are just as safe and effective. Consolidated generic dispensing rates will likely exceed the 60 percent range in the near future."

In 2007 alone, 10 brand-name medications with revenue exceeding $8.1 billion are expected to lose patent exclusivity in 2007, including the widely prescribed sleep medication Ambien, and antihypertensives Norvasc and Toprol XL. These medications follow an unprecedented year of generic savings in 2006 when several blockbusters lost patent protection. In 2006, Medco's clients and its nearly 60 million members saved $392 million from patent expirations of several blockbuster drugs including Zocor (simvastatin), Zoloft (sertraline), Pravachol (pravastatin), Flonase (fluticasone propionate) and Mobic (meloxicam).

"When a new generic drug is close to entering the market, we communicate to our clients, their members and health care providers by mail, fax, phone and e-messaging to help ensure that they take advantage of the savings opportunity immediately," said Kornwasser. "Through our mail-order pharmacy we can achieve a 95 percent generic substitution rate within the first week of the brand losing patent protection."

Blockbuster Insomnia Treatment

Ambien's (zolpidem) loss of patent protection could dramatically reshape spending on insomnia treatments during 2007 given the drug's U.S. sales exceeded $2 billion last year. Medications to treat sleep disorders are one of the fastest growing categories of drug spending, rising 31.5 percent in 2005 alone according to Medco.

During 2005, spending growth on sedatives and hypnotic drugs rose 31.5 percent, primarily driven by sales of Ambien and first year sales of Lunesta. U.S. sales growth of 38.1 percent continued for Ambien and Ambien CR's during 2006. While seniors are the most prevalent users of hypnotics, younger adults showed the greatest increase in use of these drugs. According to a recent Medco analysis, the number of adults aged 20 to 44 using sleeping medications increased by 128 percent from 2000 to 2005.

Savings for seniors

Patients using hypertension treatments could also greatly benefit from this year's patent expirations of Norvasc (amlodipine), Coreg (carvedilol) and Toprol XL (metoprolol extended release). Hypertension affects about 60 million adults in the United States. Pfizer's Norvasc, AstraZeneca's Toprol XL and GlaxoSmithKline's Coreg generated $4.8 billion in sales in 2006.

Savings for seniors in the anti-hypertensive drug category will be tremendous given that they are the population with the highest prevalence of hypertension. In fact, half of all Americans older than 60 years of age have high blood pressure, making the popular anti-hypertensive medications Norvasc and Toprol XL the third and fourth most frequently dispensed drugs in the United States, respectively, according to IMS Health.

Reflecting the growing role of generic drug use among the senior population, the generic utilization rate for Medco YOURx PLAN(TM) enrollees -- the company's Medicare Part D prescription drug plan -- was 59 percent for 2006, significantly higher than the national average.

These drugs present an opportunity for members of Medco YOURx PLAN to capitalize on the savings from generic drugs with a $5 co-pay for a 30-day supply of drugs from an approved retail drug store or a 90-day supply from Medco's mail-order pharmacy. Enrollees in Medco's Medicare prescription plan realized significant benefits from the program in the very first year. A recent analysis revealed that in 2006, excluding those members who received low income subsidies, beneficiaries enrolled in Medco YOURx PLAN are estimated to have achieved an average savings of $1,519 on their prescription medications.

"This year, and into the foreseeable future, generics will continue to deliver substantial savings with a number of widely used brand-name drugs losing patent," said Kornwasser. "We are making every effort to help tame health care costs for our clients and members by providing patients the opportunities and tools to save money on their prescriptions. Part of this is offering the best options on how and where to buy their prescriptions, such as Medco's mail-order pharmacy for chronic medications and Savings Advisor, a comparison shopping tool on medco.com, to help them find the lowest cost alternatives for their pharmacy needs."

About Medco

Medco Health Solutions, Inc. (NYSE: MHS) is the nation's leading pharmacy benefit manager based on its 2006 total net revenues of more than $42 billion. Medco's prescription drug benefit programs are designed to drive down the cost of pharmacy health care for private and public employers, health plans, labor unions and government agencies of all sizes, and for individuals served by the Medicare Part D Prescription Drug Program. Medco's technologically advanced mail-order pharmacies and award-winning Internet pharmacy have been recognized for setting new industry benchmarks for pharmacy dispensing quality. Medco serves the needs of patients with complex conditions requiring sophisticated treatment through its specialty pharmacy operation, which became the nation's largest with the 2005 acquisition of Accredo Health, Incorporated. Medco is the highest-ranked pharmacy benefit manager on the 2006 Fortune 500 list. On the Net: http://www.medco.com/.

This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward- looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release should be evaluated together with the risks and uncertainties that affect our business, particularly those mentioned in the Risk Factors section of the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.