The might of the Tamiflu drug

Welcome to Basel, Switzerland, home to the headquarters of global healthcare company, Roche; today, senior executives at Roche are set to host a meeting with journalists to discuss a topic that in ordinary markets would be unusual for a drug company who's renowned for focusing on areas such as oncology and other hospital-prescribed niche medicines.

But then, these aren't ordinary markets. Not only are pharmaceutical companies operating in the shadow of an economic crisis, but also in the grip of a market that has been rocked by the current flu pandemic.

Today, Roche will be discussing the impact that Tamiflu - the anti-viral drug that has become synonymous with the treatment of the H1N1 flu virus - has had on the firm. In fact, Tamiflu has now become something of an unexpected “blockbuster” and boasts projected sales of €1.3bn for the year. It has become Roche’s fourth-biggest selling product.

As traditional summer blockbusters go, an anti-viral drug probably isn't the first thing most people thing of: but considering Tamiflu was pretty much a flop when it was launched in 1999, this turnaround story provides a textbook example of how to create commercial success that even the most hardened Hollywood executive would be envious of.

Prior to concerns over the pandemic, Japan had been the only country to widely adopt the use of Tamiflu to treat seasonal flu, which has long been dismissed as a mild threat by many other countries; despite killing up to 500,000 people each year.

And while, since June 2009, Roche has been forced to allow other companies to develop competing drugs to Tamiflu, after much speculation about Roche's so-called 'monopoly' of Tamiflu in the UK, it was governments' response across the globe to a possibly swine flu pandemic - and Tamiflu's key role in that response - that has led to the drug's new status.

Tamiflu not only met a clinical need, it offered an advantage over the alternatives. (Only one other drug, GDK's Relenza, which was launched just ahead of Tamiflu really competes, but as it has to be inhaled, rather than swallowed, is more difficult for patients to take than Tamiflu). From here, the benefits continued: Tamiflu filled a psychological gap, its snappy and savvy brand name more clearly linked to the virus it was designed to treat than its competitors, and by supporting and circulating studies that suggested the widely varying levels of stockpiles purchased by different governments, Roche added pressure for the stragglers to purchase more.

If that's not enough, Roche has now sold bulk versions of the drug’s ingredients to governments in moves to prolong the shelf-life currently being stipulated by the seven years regulators have allowed. The Swiss-based firm is also proposing ways for governments to send back older stock of the drug for reprocessing and reuse.

In short, Tamiflu may has exceeding expectations across the board - including Roche's own. It may not be around for the next pandemic (with its patent likely to have expired) but just like a movie blockbuster one year that isn't around the next, it is likely Tamiflu's impact will boost profit margins for some time to come. In other words, for Tamiflu, thanks to a human need and a savvy strategy in marketing, the drug has become this year's pharmaceutical superhero.

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