Shire Shrugged Off

In a perfect world, when two drugs compete for patients with the same disease, the better drug should win out.

But "better" can be defined in many ways: A drug may be more effective than its competitor, it might be safer, easier to tolerate or less expensive.

But here's a news flash: Drug companies and the health care system don't operate in a perfect world, which is why Shire Pharmaceuticals(SHPGY) will probably succeed in getting doctors to prescribe its newly approved drug, Vyvanse, for attention deficit hyperactivity disorder (ADHD).

Shire will likely accomplish this feat even though its current ADHD drug, Adderall XR, is in most ways equal to or better than Vyvanse.

It shouldn't work out that way, but it will. U.K.-based Shire is in the process of buying New River Pharmaceuticals(NRPH), which developed Vyvanse. Once that deal closes, Shire will control both Adderall XR and Vyvanse.

The thing to remember here is that Adderall XR will go generic in a couple of years, so Shire needs to get patients off that drug and onto Vyvanse, which has years and years of profitable patent life left.

And because Shire will control both drugs -- and is the dominant player in the ADHD market -- the company can pretty much do whatever it takes to make the switch happen. Shire sales reps will descend on doctors' offices to push Vyvanse, while minimizing Adderall XR. The drug might be priced at a discount while Adderall XR's price rises.

And would anyone be surprised if we see supply shortages of Adderall XR in the market, making the drug hard to prescribe and tilting the playing field in Vyvanse's favor?

The market certainly believes that Vyvanse will be a success. New River's stock has been a rocket, and generally, investors cheered when Shire announced the deal to buy the company. American depositary shares of Shire closed Thursday down 2.3% to $62.97.

But I'm a bit of an idealist, and this still has me believing (this is going to sound naive) that the best drug should win. And when I look at Adderall XR vs. Vyvanse, I can't see any good reason why a doctor would prescribe the latter.

Take a look at the chart, which breaks down the common adverse events listed for each drug, as listed in their respective labels filed with the Food and Drug Administration (which can be found here). As you can see, Adderall XR is better tolerated than Vyvanse across all but one category.

Adverse Event Profile: Vyvanse vs. Adderall XR Results for pediatric patients
Adverse event	Vyvanse (n=218)	Adderall XR (n=374)
Abdominal pain	12%	14%
Nausea	6%	5%
Vomiting	9%	7%
Weight loss	9%	7%
Decreased appetite	39%	22%
Dizziness	5%	2%
Insomnia	19%	17%
Irritability/nervousness	10%	6%
Source: Vyvanse and Adderall XR labels, per FDA web site.

According to the same drug labels, 10% of Vyvanse-treated patients in clinical trials discontinued due to adverse events deemed related to the drug. For Adderall XR, the drug-related discontinuation rate in studies never exceeded 3.4%