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Retailers, pharmacies fear profit fall amid mushrooming dementia drugs
  • By So Jae-hyeon
  • Published 2018.11.22 15:23
  • Updated 2018.11.22 15:23
  • comments 0

Pharmaceutical companies are intensively competing to promote their dementia treatments on the back of the government’s support for dementia patients.

However, drug retailers and pharmacies are raising concerns that competition among too many dementia drugs might erode their profits.

Since President Moon Jae-in said that the state would take more responsibility for treating dementia, sales of dementia treatments including popular drug donepezil (original brand: Aricept) have been surging rapidly.

The top eight donepezil-containing medicines posted more than 9 percent growth in sales during the first three quarters this year. Other dementia treatments using other ingredients such as galantamine, memantine, and rivastigmine also recorded triple-digit expansion.

Generic drugs, in particular, have driven up the growth of the dementia treatment market.

Among donepezil-using drugs, the original medicine Aricept posted a single-digit growth, while generic copies recorded a double-digit one. Drugmakers with donepezil generic drugs are rushing to have their medicines prescribed more in hospitals.

A hospital in Seoul, which selects inpatient and outpatient prescription drugs through biddings, decided to prescribe five or six more donepezil drugs for outpatient care.

“As the hospital opened up more for outpatient prescriptions, the prescriptions of generic drugs increased significantly,” said a salesperson at a pharmaceutical firm who is in charge of sales at the hospital. “I also heard that there would be more outpatient prescription drugs.”

However, a wide range of choices for outpatient prescription drugs for a sing disease means more burden on retailers and pharmacies.

Retailers seek more profits in the larger outpatient prescription market than the inpatient market. Thus, multiple outpatient prescription drugs under the same disease treatment could reduce retailers’ profits. Retailers will have to supply products that they had not handled before or those with little margin.

If a hospital holds bidding for dual prescription drugs, retailers are less likely to participate in the bidding than the one for a single prescription drug.

Pharmacies also might struggle with excessive generic prescription medicines. Purchasing more products means more possibility of an increased inventory. Not purchasing prescription drugs might reduce the number of visiting patients. Thus, pharmacies have no other choice but to buy multiple medicines for dementia.

“It’s an open secret among retailers that some hospitals struggled with biddings because they sought dual prescription drugs,” an official at a retailer said. “Hospitals recently made excessive room for dementia-related generic drugs.”

Some observers worried that excessive competition among generic imitations for dementia could hurt the overall generic drug market. Too many generic drugs could lower the quality of medicines, just like carcinogen-containing valsartan drugs that were recalled earlier this year, they said.

An official at a pharmaceutical firm that sells donepezil said, “Hospitals’ increase of outpatient subscription drugs is something that the entire industry should pay attention to.”

If a negative issue occurs in the process, the whole pharmaceutical sector could suffer a setback, the official added.


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