Mylan-Natco Faces Uphill Battle in Gaining Market Share from Teva’s MS Drug

Mylan’s and its partner Natco Pharma’s plan to chip away at Teva’s with their own copy of the innovator’s blockbuster multiple sclerosis (MS) drug Copaxone hasn’t panned out as anticipated. Natco teamed up with US generic major Mylan for the 20 mg and 40 mg dosage versions of generic Copaxone, and the two launched their drug in October 2017. According to their agreement, Natco supplies the drug and Mylan markets it in US. Given the high complexity of the drug and the low competition for it, Natco was expected to make a profit of around ₹1000 crore in all for FY19 and FY20, before tapering off. However, gaining market share from Teva has proved tougher than earlier expected.  Teva was able to defend a large part of its market share, despite facing steep price erosion and competition from copycats by Mylan-Natco and Sandoz-Momenta, against the conventional wisdom of drug prices hitting the floor with generic entrants.

Teva’s market share for Copaxone stood at 77-78 percent at the end of the quarter ended September, and the drug maker has guided sales of USD 1.6 billion by the end of this calendar year. The slower ramp-up and higher-than-expected price erosion in generic Copaxone made Natco trim its FY19 EBITDA margin guidance by 318 basis points to 41.6 percent. Mylan’s Chief Executive Officer Heather Bresch had earlier alleged that the stranglehold of Teva on Copaxone was due to the “perverse incentives embedded in the current system.” Mylan, which had priced its version of Copaxone at USD 5000, or 14 percent below the brand price, when it launched the drug, resorted to an aggressive 60 percent price cut in July. The price cut did help Mylan win some market share, but not enough to beat Teva as the Israeli-drug maker too responded with rebates.

“We had said the last quarter and the previous quarter, we weren’t happy where our market share was, and we have been continuing to focus on this with pharmacies, with PBMs and with payers,” said Tony Mauro, Mylan’s Chief Commercial Officer, in the company’s recent earnings call. Mylan is now banking on several contracts that are in the process for renewal. “Over the last quarter, we have seen sequential 25 percent gain in market share, up 5 percent total market share gaining Q2 to Q3, at one point in Q3 new scripts were getting the 30 percent level for the first time. So we are very excited where we are going but we are not finished and we have got more to do and more to work with as it relates to that,” Mauro said. “Time is running out for Mylan-Natco duo to win big market share from Teva, as Dr Reddy’s and Biocon are in race to launch Copaxone copies, though it may not happen in FY19, but FY20 is possible,” an analyst, who didn’t want to be named. – Money Control