Recent Trends Give Xyzal Blockbuster Potential

Implications: FDA approval for UCB / Sanofi-Aventis new prescription drug Xyzal for treatment of seasonal and perennial comes at the perfect time for a big win for the pharmaceutical companies.  Xyzal has the potential to be the next blockbuster. The key questions:  Will physicians embrace the new med; how will the product be marketed; and most importantly, how will managed care and patients react.

Analysis:  Since Claritin went generic and over-the-counter (OTC) in 2002, it has left the prescription market to Allegra (Sanofi-Aventis) and Zyrtec (UCB/ Pfizer). Patients seeking relief from allergies and insurance coverage for their prescription (OTC meds are seldom covered by health plans) turned to these two products. Both of these drugs are scheduled to lose patent protection in the near-term, with generic Allegra already available.

Both companies are well entrenched in the allergy market, and both have a lot to lose, so the approval comes at the right time. Resources can be redirected to Xyzal rather than redeployed, assuring a rapid uptake.

Finally, both allergists and allergy sufferers are always looking for the 'latest and greatest' treatment. The combined marketing budget and share of voice will create a strong presence, with representatives detailing, medical journal articles and advertising, and likely a huge DTC advertising push.

The key concern, and the biggest factor that could dampen the launch, is the reaction of managed care.  Will the larger insurers and PBMs be willing to pay for it and add it to formulary in the face of proven drugs that are now less expensive generics?

And how will consumers react - faced with the choice of a generic (with a nominal co-pay) versus a much larger potentially third-tier or non-formulary co-pay? 

The factors seem to be in place for a blockbuster.  The main question, how will Sanofi-Aventis and UCB handle the managed care hurdle?