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Niche-buster drugs launch next market evolution: biologics, small-niche drugs become new blockbuster model as generic market share increases.

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IS THE BLOCKBUSTER DRUG model on its way out? After all of the billions of dollars generated by these popular drugs treating common conditions, will generic drugs, patent expirations, safety issues and a dry pipeline for high-incident diseases make room for a new drug paradigm?

Some industry leaders predict that biologics will be the new blockbuster model--costing more but targeting niche diseases and fewer people. "Niche-buster" has even hit the vernacular.

A 2006 report by market analyst Datamonitor suggests that drug companies are not shying away from the new biologics even though they are targeting a limited population. Instead, they are realizing the sales potential of lower marketing costs, limited competition and greater support from regulators.

Biotech drugs also are less vulnerable to patent expirations and generic competition--the death knell of the pharmaceutical industry. The Food and Drug Administration has not yet created a system for approving generic biotechs.

Datamonitor's "From Blockbuster to Nichebuster" report predicts that the newer drugs will place an emphasis on research and development, while the blockbusters relied on aggressive sales and...

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