To All,
Ran across this interesting article in the latest Forbes. It's not exactly about Duramed. I just include it here because of how much it reminds me of how tenaciously AHP is trying to protect it's estrogen product. Methinks the big drug companies have a little bit too much political clout.
FROM FORBES MAGAZINE forbes.com
Delaying tactics
By William P. Barrett
Bristol-Myers Squibb sells $1 billion a year of a
drug it didn't invent and can't patent-but knows
how to protect.
Delaying tactics
By William P. Barrett
FOR MASTERFUL MANEUVERING you've
got to hand it to Bristol-Myers Squibb. The New
York-based drugmaker (1997 sales, $17 billion)
has, against all odds, preserved a near-monopoly
over one of its most profitable drugs.
The drug is Taxol, Bristol's brand name for
paclitaxel, a trace compound found in the bark of
the Pacific yew tree in the northwestern U.S.
During the 1970s researchers for the U.S.
government's National Cancer Institute
discovered that paclitaxel stops the growth of
some cancerous tumors.
The institute hired Hauser, Inc., a tiny but
innovative Boulder, Colo. laboratory, to figure out
how to extract paclitaxel from the trees. This took
a lot of doing since it requires almost 11/2 yew
trees to produce the typical treatment course of
1/14 of an ounce. By the late 1980s the institute
had spent more than $30 million on research, but
while Hauser had perfected an extraction
technique, the product was nowhere near market.
The institute decided to seek bids. The winner: a
joint plan by Hauser and Bristol. Bristol would
spend more than $100 million to finish clinical
studies and get the drug to market. Hauser,
developing a reputation for chemical extraction,
would supply the paclitaxel.
Although $100 million may sound like a lot of
money, it is a screaming bargain for getting a lock
on a promising new drug. Why so cheap? Since it
hadn't invented the drug, Bristol couldn't get a
20-year patent-a legal monopoly. Taxol had
been invented at taxpayer expense, and Hauser
controlled the leading extraction technology.
Bristol was merely getting the right to be first to
bring the drug to market. Paclitaxel is "neither
patented nor patentable," a Bristol official assured
Congress in 1991.
To make final development worthwhile, however,
the Food &Drug Administration approved Taxol
in 1992, giving Bristol five-year "market
exclusivity," until December 1997. The FDA had
this power under the 1984 Waxman-Hatch law,
designed to speed up drug approvals.
Taxol became a phenomenal hit for use in
chemotherapy treating ovarian and breast cancer;
for Bristol it was a cash machine. A single
treatment retails for about $2,000. Last year, with
worldwide sales of $941 million, Taxol became
Bristol's second-largest seller. Experts estimate
Taxol accounted for a huge 15% of Bristol's
record 1997 profits of $3.2 billion, or $3.22 a
share. The biggest customer for this
government-invented drug: the government's
Medicare program.
Along the way, for tax and supply diversification
reasons, Bristol developed its own operation in
Ireland to manufacture paclitaxel and then fired
Hauser as a supplier. "Bristol fulfilled every
contractual provision we had, to the letter," says a
still-bitter Dean Stull, Hauser's organic chemist
boss. "But I still feel betrayed."
Rival drugmakers eagerly awaited the end of
Bristol's five-year market exclusivity. They figured
they then could quickly buy paclitaxel from
Hauser and others, undercut Bristol and make a
killing.
They were wrong. The five-year exclusivity has
come and gone, but Bristol still dominates the
market.
Drugmakers Immunex Corp. of Seattle and Ben
Venue Laboratories of Cleveland sought FDA
approval last fall to make a generic Taxol. Bristol
responded with lawsuits alleging, of all things,
patent infringement.
As it turns out, Bristol recently obtained two
patents from the U.S. Patent & Trademark
Office-not for Taxol, but for its "use." Bristol
claimed to have invented new ways of
administering Taxol, largely by cutting the dosage
to reduce side effects.
Is this patentable? While the courts decide, Bristol
gains 30 more months of U.S. market
exclusivity-maybe another $2 billion of sales at
the current rate.
Taxol alone accounted for an
estimated 15% of Bristol-Myers
Squibb's worldwide profits in
1997.
Ivax Corp. of Miami had been testing paclitaxel
for a new use, fighting Kaposi's sarcoma, an
AIDS-related illness. But just weeks before Ivax
sought formal permission from the FDA, Bristol
filed its own request for FDA approval. For
Bristol this market would have been small change,
but drugs approved for one use have a way of
being prescribed for others. Under federal
procedures that favor new uses for existing drugs
proposed by their makers, Bristol won an FDA
order blocking Ivax for six years.
Last fall Bristol sought congressional approval to
extend its Taxol monopoly for five years in
exchange for paying the National Institutes of
Health a 3% royalty. Bad press about special
interest laws closed that channel. But as a Bristol
spokesperson says, "We will pursue all avenues
that are available to us."
It promises to be a continuing fight. Bristol lost a
legal bid last summer to block a Dutch firm from
buying Hauser's paclitaxel. Canada recently
okayed another company to market paclitaxel. An
outfit in India advertises over the Internet that it
can supply Taxol "of U.S. origin."
At the moment, Bristol reigns supreme in the U.S.
and it owns an estimated 70% of the world
paclitaxel market. In the end, it is almost certain to
lose its dominant position, but it means to
postpone that day for as long as possible. |
