Best-selling drugs fight hard against generics
Mylan faces long road getting Prozac, Procardia XL to
market
Thursday, March 25, 1999
By Teresa F. Lindeman, Post-Gazette Staff Writer
In the last month, Mylan Laboratories Inc. has won tentative approval from the
government to make generic versions of two of the best-selling drugs in
America - hypertension and angina drug Procardia XL and, even better, the
antidepressant Prozac.
Yet lengthy legal battles over the patents for the medicines could keep Mylan
cooling its heels for years.
Brand-name drug makers are mounting tougher and more complicated battles to
protect their most profitable drugs, leaving generic manufacturers like Mylan
with the prospect of spending millions of dollars and long months tied up in court
only to find the market altered by the time they are allowed in.
"Who knows what's going to be thought up in those evil minds," said Mylan
Vice President Patricia Sunseri, only half-jokingly.
Already, the U.S. District Court has a stack of court papers documenting the
two-year dispute over Procardia XL between Mylan and brand-name
competitors Bayer Corp. and Pfizer Inc.
So far, that case seems to be a pretty straightforward legal battle over patents.
Things are getting much more creative in the Prozac business, where Eli Lilly &
Co. is working hard to defend a drug that's so popular it is used to treat
everything from depression to obsessive-compulsive disorder to melancholy
pets.
When the drug eventually loses patent protection, Barr Laboratories Inc. will be
first in line to sell the generic. But Lilly isn't expected to give up that easily. The
brand-name company has been looking at ways of altering the basic product to
keep users from making the switch to the less-expensive generic.
By the time Mylan gets its version of Prozac into the pharmacies, some of the
$2.5 billion spent on the antidepressant may have been diverted elsewhere.
Congress set the stage for legal battles like these in 1984. Sweeping legislation
made it easier for generic drugs to win Food and Drug Administration approval,
but also set up ways for innovators to extend their patents. While a patent lasts
20 years, brand-name companies complain they lose a lot of time working
through tests and FDA approvals.
Since Congress' goal was to encourage competition, lawmakers added an
incentive for generics to challenge patents that appeared weak. The first
company to get FDA approval earns six months on the market free of generic
competition, a headstart that can mean millions of dollars in sales.
The most intense fights have been over the products, like Prozac, that pile up
the biggest profits.
Barr Laboratories filed its application to make Prozac in April 1996, even
though the drug was protected by patents that don't expire until 2001 and 2003.
Barr is arguing Lilly should not have been given four separate patents, covering
everything from the actual compound to the method of using the medicine. The
case is in the U.S. Court of Appeals, which could make a decision in about a
year.
If Barr wins, it could start selling generic Prozac two years before the last
patent is scheduled to expire in 2003.
Lilly is making things even more interesting by switching from capsules to
tablets, a move that that could persuade users to stay with them and not switch
to generic capsules. Barr can follow suit, but it'll have to go through another
lengthy FDA review process.
Lilly has also discussed linking up with another company to sell a purer form of
the drug, a move that has reportedly attracted the attention of the Federal Trade
Commission.
The FTC is also said to be looking into a case where a brand-name
manufacturer paid generic competitors not to sell a drug.
By comparison, the Procardia XL case is pretty tame, although the
manufacturers could still take unusual steps to protect their market share as
time starts to run out.
Bayer Corp. holds the patents and Pfizer Inc. has the license to make the drug.
Spokeswomen for both companies declined to comment because of the ongoing
litigation.
Mylan was the first generic to file with the FDA to make the drug, a calcium
channel blocker. Bayer and Pfizer filed suit in Pittsburgh soon after. The two
companies also sued other competitors who came along later and have
challenged the FDA's right to process any submission involving the
extended-release mechanism used in the drug.
If Mylan can successfully argue the patent holders don't deserve protection all
the way to 2010, it could take years off its wait for that prized first six months
of sales.
In all these situations, both sides have to decide if the hassle and the legal bills
are worth it. That may be why smaller drugs haven't stirred up as much
litigation.
"You can put in millions of dollars and still lose," said Carol Cox, spokeswoman
for Barr Laboratories.
On high-profit medicines, the risk is often a good one both for brand-name drug
makers, whose lawsuits stall the process, and for generics, who get to market
sooner.
One formula estimates generics generally take about half the business away
from a brand-name manufacturer. If Pfizer is selling $700 million worth of
Procardia XL, the generics might take about $350 million of that, said Lyle
Schonberger, an analyst with Olde Discount Corp. in Detroit.
"They do have the potential to be big, big drugs for the generic industry,
particularly for Mylan," said Schonberger.
That kind of potential explains why Mylan officials are willing to sign off each
month on about $2 million worth of legal bills related to patent challenges.
The drug maker now has 35 applications filed with FDA seeking the right to
make generic alternatives to brand-name drugs. Fourteen of those have been
challenged in court.
"They are frivolous patents in most every case," Sunseri says.
Mylan has been among those pushing Congress to take another look at the 1984
legislation that governs the industry and helped spawn all these lawsuits. Sunseri
said a hearing to consider the issue again is scheduled for mid-April.
Barr Laboratories officials aren't sure they want to see it reopened. Cox noted
that brand-name companies are likely to demand more patent protection, while
even various generic companies have diverse priorities.
"If it gets reopened, it's going to be a big to-do," predicted Cox.
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