Hepatitis C Marketing Wars Begin

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   Pharmaceuticals

Hepatitis C Marketing Wars Begin

Herper, 10.17.02, 5:00 PM ET

NEW YORK - Late last night, Roche received approval from the Food and Drug

Administration for Pegasys, a treatment for hepatitis C. That's no surprise.

We predicted it last week (see " The Week Ahead: Oct. 14-18, 2002 " ). Now, the

real battle begins, as Roche positions Pegasys to compete with

Schering-Plough's PEG-Intron.

For Roche (otc: RHHBY - news - people ), Pegasys is crucial. It is the first

major new drug the Basel, Switzerland-based giant has launched in two years,

and it could potentially be a very big seller. But it won't be an easy

fight. PEG-Intron has already been on the market for almost two years,

making it a well-established product. PEG-Intron and related hepatitis C

treatments made by Schering-Plough (nyse: SGP - news - people ) have annual

sales of more than $1 billion.

To convince doctors that Pegasys is a superior treatment, Roche is eating

its cost. The first 15,000 prescriptions of Pegasys written between now and

Dec. 31 will be given away for free. Roche expects the injectible drug to be

on pharmacy shelves as early as next week.

" There is an awful lot of excitement about this, " says s Gemayel, vice

president of specialty-care commercial operations for Roche.

Gemayel says that aside from the giveaway, Roche has a clear marketing

message for the new treatment, which combats hepatitis C virus and the

chronic liver disease it causes. One advantage: Doctors can tell if Pegasys

is working in their patients after giving it for three months. With other

drugs, the medicine must be given for twice that long before doctors can be

sure the patients won't respond.

There are other arguments in the new drug's favor, too. It is well studied;

three papers on Pegasys have appeared in The New England Journal of

Medicine. And Pegasys is the only product in its class approved for use in

patients who already have cirrhosis of the liver, meaning that

nonfunctioning scar tissue has replaced normal liver tissue.

It is also vital that Pegasys be approved in combination with Roche's

Copegus, a proprietary ribavirin (or anti-viral) drug. Most patients taking

PEG-Intron are given the drug packaged with Ribapharm's (nyse: RNA - news -

people ) ribavirin drug--the combination therapy can get rid of hepatitis C

entirely in many patients.

" A lot of the treatment shifting to combination therapy is shifting to

treatment with ribavirin, " says Gemayel. The Pegasys/Copegus combination

will be reviewed by an FDA advisory panel in November and could be approved

by the end of this year.

PEG-Intron has actually benefited four companies: Enzon (nasdaq: ENZN - news

- people ), which designed the current chemical formulation of the drug;

Ribapharm, which makes ribavirin; ICN (nyse: ICN - news - people ), which

spun off Ribapharm; and Schering-Plough. Pegasys only has to help Roche. Can

it do it?

" We view this extremely seriously, " says Gemayel. " We hope to make sure that

Pegasys is recognized in the marketplace for its value and will rapidly

become the preferred brand. "