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Lexapro: The First Victim of Part D?

 
• By Michael McCaughan

A slowdown in sales of Forest's flagship antidepressant Lexapro left analysts confused: generic versions of Celexa seem to be weighing down the new product, but why did the impact suddenly arrive in the third quarter? A recently policy pronouncement from CMS may be a clue.

Analysts listening in on Forest Laboratories Inc. ’s Oct. 18 quarterly earnings call were left scratching their heads: the company’s biggest brand, the antidepressant escitalopram (Lexapro), is losing share to generic versions of a predecessor product, citalopram (Celexa). As a result, Forest is now projecting that Lexapro will fall short of its objective of reaching a 21.5% share of the antidepressant market by as much as a point-and-a-half. The company trimmed its full year revenue target for the brand by about $100 million (to $1.9 billion). The gloomy forecast confirmed investors’ fears about Forest, driving the company’s stock down 3% for the day—on top of a 20% decline in the weeks leading up to the earnings report.

In some respects, the slow-down in Lexapro is not surprising. After all, it is a close chemical cousin of Celexa and makes an inviting target for managed care plans trying...

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