Drugmakers battle to keep generics off market
By Julie Appleby and Jayne O'Donell
USA Today
The pain was like electric shocks through her feet — symptoms that began after Beth Constantine stopped taking a drug that treats her chronic depression.
She'd lost her job, leaving her without insurance and unable to pay $100 a month for antidepressant Paxil. In pain and worried about her depression returning, Constantine last July wished she could buy a lower-cost generic version of Paxil.
But there wasn't one.
That's because Paxil is caught up in an increasingly common drug-industry tactic, one that affects other big-selling medicines such as Prilosec and Taxol. Drug companies are finding it advantageous to file new patents on existing drugs — in BuSpar's case, only hours before the original patent was to expire. Such moves can keep lower-cost generics off the market for years.
At the heart of the controversy is whether drug companies are legitimately protecting new discoveries on drugs they spent years researching — many of which bring in more than $1 billion a year in sales revenue. Critics say drug firms are using questionable legal tactics to delay rivals as long as possible, knowing prices and their own market share for top-selling products can drop by half or more once generics hit the market.
The dispute isn't just between drug companies. Employers, governors, consumer advocates and antitrust enforcers have joined in opposing some efforts by drug companies to use patent tactics to extend monopolies beyond the 20 years granted under current patent law. Twenty-nine states have filed suit against Bristol-Myers Squibb over patents on the cancer drug Taxol.
Drug firms say their patent efforts are the legitimate outgrowth of ongoing research into existing drugs — and are aimed only at protecting the rewards they deserve for the time and money they put into developing new treatments.
"Patents are one reason why we can be so proud of so many new discoveries," says Mary Anne Rhyne of GlaxoSmithKline, the maker of Paxil. "So, yes, you may get cheaper drugs without those patents, but patents have been the incentive that has made this country the envy of the world with its medical discoveries and treatments."
Under current law, drugs win 20 years of exclusive rights, starting at the time a patent is filed. The clock starts ticking even while the drug is still in development — so most drugs have far fewer than two decades of monopoly once they get on the market.
But, in many cases, drug firms file additional patents. If the new patent is upheld, the clock starts again for another 20 years. The average number of patents on a drug has gone from two to 10 in the past two decades, according to the generic-drug industry.
New patents can block generics because patent-holders are able to sue generics that want to bring a rival to market, saying the generic is infringing on a patent. Such lawsuits result in automatic 30-month stays, preventing generic competition while the parties try to hash out their differences in court.
Critics say the drug companies can drum up almost anything to win a new patent; the industry counters that it must meet strict standards set by the U.S. Patent and Trademark Office.
Some of the new patents won by drug companies in recent years cover new uses for the existing drugs or new time-release formulas. Some, however, cover such things as the shape of pills, dosage and, in one case, the color of the bottle.
The list of drugs whose new patents are being challenged in lawsuits or are under investigation by prosecutors reads like a "Who's Who" of the pharmaceutical industry: AstraZeneca's Prilosec, the second-best-selling drug in the world; Bristol-Myers Squibb's BuSpar; Glaxo's Paxil and dozens of others.
"I don't know of any of the large drug companies that are not aware of the potential way to extend their monopoly profits," says Meredyth Smith Andrus, an assistant attorney general at the Maryland Attorney General's office.
Maryland, like many other states, is suing drugmakers over what the states allege are efforts to keep lower-cost drugs off the market. It's a problem, Andrus says, that costs consumers millions each year.
Because the feud over Paxil is complex, it also highlights the difficulty Congress may face later this summer if it takes up a proposal to change drug patent laws.
And it shows the tremendous financial stakes for all involved: for Glaxo, trying to maintain monopoly on a drug it's had on the market since 1994; for the generic makers that want a piece of Paxil's $2.7 billion in annual sales; and for consumers who pay $80 to $100 a month for a drug that advocates say could cost half that if competition were available.
Generic firms first went after Paxil in 1998. Although the drug's main patent won't expire until 2006, the firms applied to produce copycat versions. They argued they could make a similar version without infringing on Glaxo's patent.
But Glaxo wasn't going to let Paxil go without a fight. It filed suit against the generic makers, saying they would infringe on Paxil's patent. Four years later, those cases are still mired in court, in part because Glaxo has filed nine new patents on the drug — including patents for versions of the drug it doesn't even market. Those patents potentially protect Paxil until 2016.
Each patent filed by a drugmaker gives it an opportunity to challenge and delay by years generic firms that want to bring a competitor to market.
Glaxo representatives say all the patents are legitimate. Any drug company, they say, can win a patent for a new use of the drug, just as long as that listing also includes a condition, such as depression in Paxil's case, that the drug is already FDA approved to cover.
Several drugmakers — Abbott, Geneva, Aventis, Andrx and Biovail — have recently settled with the FTC over allegations that they either made payments to generic firms to delay competition or listed questionable patents to block generic efforts. More FTC investigations are ongoing.
Because blockbuster drugs are so profitable, antitrust enforcers say the firms will try almost anything to keep the market to themselves, even for a few additional months.
Some lawmakers in Congress are pushing legislation that would limit the ability of brand-name companies to delay generics. The measure may be debated this summer. The drug industry says such a fix could harm efforts to develop new drugs by cutting revenue — and isn't necessary.
Jeff Trewhitt, spokesman for the Pharmaceutical Research and Manufacturers of America, points out that generic drugs represent 49 percent of all prescriptions, up from 19 percent in 1984, when a law was passed aimed at making it easier to get generic competition.
Current law, Trewhitt says, "puts a balance between incentives for brand-name companies and for generic companies." The McCain-Schumer bill upsets that balance in favor of generics, he says, and could stifle industry efforts to produce new drugs.
But Jody Hunter, director of health benefits at Georgia-Pacific, says Fortune 500 companies spent more than $2.5 billion last year for 17 drugs facing patent expiration. She says Congress could save these companies more than $1 billion.
Dozens of lawsuits challenging new patents have been filed by states and consumer groups. Many of the lawsuits seek restitution for consumers. "We're trying to get them where it hurts," says Ahaviah Glaser, director of the Prescription Action Litigation Project, which has filed lawsuits over 11 drugs it says should have generic versions.
Another alternative comes from an unlikely source: the CEO of a major drug company.
Daniel Vasella, chairman and CEO of Novartis, says drug firms should get a certain period of years, say 10, after a drug wins market approval during which it would have exclusive rights.
"There have been some legalistic ways of extending patent life, which I don't think are legitimate," says Vasella, one of the few industry CEOs who will publicly criticize some industry tactics. "One has to accept that patents have an end."
