Big Pharma Makes More Money On Kids, Use Of Medications Among The Young Rises

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The pharmaceutical industry has found a growing source of sales–the prescription of medicines, primarily used by adults in the past, to children. A portion of the sharp increase in drugs used by children last year was due to H1N1 doses. But, the majority of the “improvement” in sales was because children are being treated for a rising number of chronic illnesses.According to an annual study done by Medco Health Solutions, Inc. (NYSE: MHS):

An analysis of pediatric medication use found that in 2009, more than one in four insured children in the U.S. and nearly 30 percent of adolescents (10-19 year olds) took at least one prescription medication to treat a chronic condition; the most substantial increases were seen in the use of antipsychotic, diabetes and asthma drugs over the past nine years.

The data showed that Type 2 diabetes medication use by juveniles increased 5.3% in 2009. There was a 17% increase in the use of antihypertensives in children. Both of these trends are almost certainly due to the rise in childhood obesity. The underlying cause of the illness and the need for treatment will almost certainly continue into adulthood and overweight children remain overweight as they age.

The growing use of asthma treatments was also significant. Respiratory drug use moved higher by 5% for children in 2009 and was higher 42%t since 2001.

For psychiatric disorders, the largest spending on drugs for children was treatments for ADHD. During 2009, 13.2% of the prescription drug benefit dollars spent on children were for ADHD medications.

But the real growth in the psychiatric pharma area was a rise in the prescriptions for severe mental disorders–atypical antipsychotics. Since 2001, the use of these drugs in children has doubled. The medical community is ambivalent about the trend. “Atypical antipsychotics are extremely powerful drugs that are being used far too commonly – especially in children – given their safety issues and side effects,” said Dr. David Muzina, a specialist in mood disorders and national practice leader of the Medco Therapeutic Resource Center for Neuroscience.”

Several large drug companies benefited as the FDA gave them permission to offer treatments formerly for adults for pediatric use as well. These include cholesterol drugs Welchol made by Daiichi Sankyo, Inc. and Crestor made by AstraZeneca PLC (NYSE: AZN) ; Atacand  for hypertension also made by AstraZeneca; Axert for migraines made by Ortho-McNeil-Janssen Pharmaceuticals; heartburn treatment Protonix made by Pfizer Inc (NYSE: PFE); and atypical antipsychotic medications Abilify made by Bristol-Myers Squibb Company (NYSE: BMY),  Seroquel made by AstraZeneca  and Zyprexa made by Eli Lilly and Company (NYSE: LLY)

The big pharma industry is under siege as many of its drugs go off patent and their sales are largely replaced by less expensive generics. Drug companies are finding that their costs of R&D to find “blockbuster” treatments remains high but they are simultaneously faced with growing competition from biopharmaceutical companies.

It appears that much of the growth in sales for major drug companies during the decade will be for treating children who are overweight, unable to breathe, or mentally unsettled.

Douglas A. McIntyre