Analysis: Sleep Warnings’ Impact Minor

By STEVE MITCHELL

New warning labels on insomnia treatments, including the top sellers of Sanofi-aventis’ Ambien line and Sepracor’s Lunesta, probably won’t result in a major drop in sales, according to analysts.

The new warning about allergic reactions and dangerous behaviors during sleep will most likely have a detectable but not very big impact on sales, Natalie Taylor, an analyst with Decision Resources, told United Press International.

The warning is expected to be a modification of the warnings section and not a black box warning, which may lessen the hit on sales of the drugs.

If the warning had been a black box warning, the impact on sales would be significant, Taylor added.

Even so, the widespread media coverage will probably cause the warnings to take a bigger toll on sales than they otherwise would have.

Because this has been publicized, I think it will have an impact on 2007 sales of hypnotics, Taylor said.

However, the impact is difficult to quantify because the insomnia market is one of the fastest growing markets, she added.

The biggest change is likely to be seen among primary care physicians, who account for about 80 percent of prescriptions for these medications. The remaining 20 percent of prescriptions are written by psychiatrists or are for patients who are being treated for another medical disorder.

Primary care physicians will be more prudent but psychiatrists generally aren’t as affected by these warnings because they’re treating more severe patients, Taylor said.

The Food and Drug Administration said late Wednesday sedative-hypnotics can cause severe allergic reactions, such as facial swelling, and lead to dangerous behaviors, including sleep-driving and preparing and eating food while asleep.

In addition to requesting manufacturers place warnings on labeling about these risks, the FDA also recommended the drug makers issue dear doctor letters and develop patient medication guides.

The agency’s action applies to 13 drugs. In addition to Ambien and Lunesta, this includes Medpointe Pharm’s Butisol Sodium, Parke-Davis’ Carbrital, Valeant’s Dalmane, Questcor’s Doral, Pharmacia and Upjohn’s Halcion, Abbott’s Placidyl and Prosom, Tyco’s Restoril, Takeda’s Rozerem, Eli Lilly’s Seconal and King’s Sonata.

The FDA, noting that the rate of these new adverse effects can vary from product to product, also recommended manufacturers conduct clinical trials to better assess the frequency with which they occur.

Lawrence Neibor, an analyst with R.W. Baird, thinks the FDA’s action is unlikely to have much impact on the insomnia drug market because these risks have been known since the early part of last year, when they emerged in association with Sanofi-aventis’ Ambien line.

“It could impact market growth if it stirs new negative perceptions of insomnia products, but we believe this may have already largely played out following March-06 reports in the popular press concerning sleep-driving/

sleep-eating with Ambien,” Neibor stated in a research report issued Thursday.

Specifically looking at Sepracor’s Lunesta, Neibor also doesn’t foresee much of a hit to that drug, stating that new FDA requirements for insomnia medications will not have a significant adverse impact on Lunesta.

Even if the FDA’s move does have an adverse impact on this class of medications, no one drug will have an advantage, so the net effect will be a draw.

Because all drugs in the space will be impacted by the same ‘class language,’ this should not meaningfully affect the competitive landscape, Neibor stated.

R.W. Baird told UPI Neibor was unavailable for comment.

However, both Lunesta and Ambien face a significant challenge ahead next month when the launch of a generic Ambien is expected.

Goldman Sachs analyst James Kelly reduced his 2007 sales forecast for Lunesta earlier this week by $23 million due to the anticipated impact of generic Ambien. But Sepracor may be able to turn things around in 2008.

We assume a slight market share decline in the second half of 2007 as a result of Ambien IR generic competition, but share gains return in 2008 as the market stabilizes, Kelly stated in a research report.

I think the generic Ambien is going to eat into new scripts of Lunesta, she said.

Ambien CR may take less of a hit because doctors prefer it to Ambien. A lot of physicians I’ve talked to like Ambien CR because it’s a little better at maintaining sleep than Ambien, Taylor said.