Frost & Sullivan: Third-Generation Drugs Boost Psychotherapeutic Market

According to a new research report by Frost & Sullivan (Mountain View, CA), third-generation pharmaceuticals—created by breakthroughs in drug discovery technology—promise to create even more opportunities in the booming psychotherapeutic market. The report, entitled "U.S. Psychotherapeutic Markets," details the market opportunities for pharmaceuticals used in the treatment of psychiatric and/or behavioral disorders. These markets reached revenues of $8.3 billion in 1997, and are divided by disease components within the study: depression, schizophrenia, anxiety disorders, attention deficit disorder (ADD), and obesity.

"Our understanding of the CNS has changed dramatically in recent years as we learn more intimately the processes governing neural systems and cellular communication," said Alex Ward, pharmaceutical analyst at Frost & Sullivan. "These drugs are likely to have greater efficacy than the current psychotherapeutics, and just as important, will lack the numerous side effects."

Although generic first generation drugs such as haloperidol, thorazine, and TCAs are still well represented in the prescription market, drug revenues are being driven primarily by second generation psychotherapeutics that are more specific in their selectivity for receptor subspecies. Furthermore, new drug discovery technologies are expected to create an explosion of third-generation psychotherapeutics which will continue to drive revenues into the next decade.

"Third-generation psychotherapeutics are likely to be well-accepted by managed care because they will reduce the costs of inpatient care," said Ward. "Therefore, as the current 'me-too' second generation psychotherapeutics begin to face patent expiration, the third generation drugs will command premium prices."

A new effort is underway for competitors to strengthen their brand with aggressive marketing strategies. As general practitioners increasingly become prescribers for psychotherapeutics, all of the companies have assembled large sales forces strictly targeting general practitioners. Another extremely successful strategy has been for competitors to sponsor head-to-head phase IV studies to demonstrate the greater effectiveness of one brand over another, or a brand over a generic.

Frost & Sullivan is an international marketing consulting company that monitors the medical industry for market trends, market measurements, and strategies.

For more information: Russ Pecoraro, Frost and Sullivan, 2525 East Charleston Rd., Mountain View, CA 94043. Tel: 650-237-4386. Fax: 650-903-0915. Email: rpecoraro@frost.com.