What is a Blockbuster Drug?
A blockbuster drug is an extremely popular drug that generates annual sales of at least $1 billion for the company that sells it. Examples of blockbuster drugs include Vioxx, Lipitor, and Zoloft. Blockbuster drugs are commonly used to treat common medical problems like high cholesterol, diabetes, high blood pressure, asthma, and cancer.
BREAKING DOWN Blockbuster Drug
A blockbuster drug can be a major factor in a pharmaceutical company's success. However, it can also cause major problems for a company if the drug is discovered to have problematic side effects or is recalled after being released. Also, the patents on blockbuster drugs eventually expire, which brings on competition from less expensive generic equivalents.
The three biggest blockbuster drugs of all time, with combined lifetime sales to date of more than $350 billion, are as follows:
Blockbuster Drug #1: Lipitor
Treats: High cholesterol
Lifetime sales: $150.1 billion
Warner-Lambert originally developed Lipitor. It was approved in the U.S. in 1997. Pfizer acquired Warner-Lambert in 2000 to gain sole ownership of the drug – a wise investment. Lipitor would eventually account for one-fourth of Pfizer’s total sales. The patent expired in 2011, but Lipitor still lives on for Pfizer as a blockbuster drug, with most of its sales coming from China and overseas markets. Lipitor still generated $1.76 billion in sales for Pfizer in 2016, pushing its lifetime sales to current levels.
Blockbuster Drug #2: Humira
Treats: Ankylosing spondylitis, arthritis, Crohn’s disease, plaque psoriasis, ulcerative colitis
Lifetime sales: $109.2 billion
Doctors liked Humira’s ability to counteract inflammation caused by several diseases. The drug is losing patent protection in 2018, so sales are soon likely to peak. Humira is owned by AbbVie, a 2013 spin-off from Abbott Labs. It's possible that Humira could surpass Lipitor by 2020 to become the biggest blockbuster drug ever. Humira is approved for 10 indications, and it generated more than $16 billion in sales for AbbVie last year. It is not currently known whether AbbVie can keep biosimilar competition at bay as other companies seek to replicate their formulas.
Blockbuster Drug #3: Advair
Treats: Chronic obstructive pulmonary disease, asthma
Lifetime sales: $95.7 billion
Advair got its approval in 2001 and has been a hot seller since the beginning. Its U.S. patent expired in 2010, but no successful generic competitor has surfaced. Copying the actual drug isn't the issue. The problem seems to be that rivals can't figure out how to copy the inhaler – until they do, GlaxoSmithKline investors can rest easy.