[Ip-health] Abbott evergreening strategy at issue in Teva antitrust suit - WSJ

[robert weissman]

The Wall Street Journal

June 2, 2008

  TriCor Case May Illuminate Patent Limits

By *SHIRLEY S. WANG*
June 2, 2008; Page B1

Pharmaceutical makers go to great lengths to protect their exclusive
marketing rights to best-selling brand-name drugs. But a pair of
lawsuits and a government antitrust investigation involving a drug made
by *Abbott Laboratories* could help define how far those companies can
legally go to fend off copycat rivals.

[Patent play]

The controversy centers on one of Abbott's biggest moneymakers, a
33-year-old cholesterol medicine called TriCor, which racked up U.S.
sales of $1.2 billion last year. State and federal authorities are
examining whether Abbott violated antitrust laws in its efforts to
prevent an Israeli company from successfully selling a generic version
of the drug.

The outcome could provide legal signposts for major drug makers to
follow in seeking to extend the lives of their brand-name drugs. Those
companies have struggled in recent years to find replacements for their
aging blockbusters and also face generic competitors increasingly
seeking to enter the market for drugs that are still under patent.

Drug companies typically have three to 10 years of exclusive patent
rights remaining when their products hit the market. But they often find
ways to extend their monopolies by patenting slight improvements to
those medications. Critics say some of these methods are abusive and
hurt consumers and government health plans by denying them access to
legitimate low-cost alternatives.

In a lawsuit filed in federal court in Delaware, 25 states and the
District of Columbia allege that, in addition to filing new patents on
questionable improvements to TriCor, Abbott engaged in a practice known
as "product switching." That involves retiring an existing drug and
replacing it with a modified version that is marketed "new and
improved," preventing pharmacists from substituting a generic for the
branded drug when they fill prescriptions for it.

Product switching isn't against the law, but the states' lawsuit alleges
that Abbott acted improperly by employing it and other strategies solely
to preserve its monopoly on TriCor. The Federal Trade Commission is
investigating the same issue. Abbott denies any wrongdoing.

The TriCor saga dates back to the 1960s, when the drug, known
generically as fenofibrate, was discovered by Laboratoires Fournier of
France. Fournier began selling the product in Europe in 1975.

More than two decades later, Abbott, based in suburban Chicago, licensed
the U.S. rights to the drug and won approval from the Food and Drug
Administration to market it under the brand name TriCor. The drug's
underlying patent had expired, but Abbott patented a new way to make it.

I n 1999, one year after TriCor hit the U.S. market, generic-drug maker
Novopharm Ltd., soon after acquired by Israeli rival *Teva
Pharmaceuticals Industries* Ltd., applied to the FDA to market a copycat
version of the drug. Abbott struck back. It sued Teva, alleging patent
infringement.

The lawsuit triggered a 30-month waiting period under the 1984
Hatch-Waxman Act, during which a copycat drug can't be launched while
patent challenges are worked out.

During the waiting period, Abbott altered its product, lowering the
dosage and changing it to a tablet from a capsule. After filing a patent
on this modified form of TriCor, Abbott bought back the remaining
supplies of the capsules from pharmacies and replaced them with the
lower-dose tablets.

By the time 30 months had elapsed and Teva was ready to launch its
generic version of the drug, there was no longer a market for it. The
reason: FDA rules say a pharmacist can substitute a cheaper generic for
a branded drug only if they are strictly bioequivalent. Not only does
that mean the generic version must contain the same active ingredient,
it also must also be in the same form and dosage.

Since Teva's generic capsules were no longer technically bioequivalent
to Abbott's new TriCor tablets, pharmacists couldn't automatically
dispense them in place of the branded drug.

In June 2002, Teva asked the FDA to let it sell a generic version of the
TriCor tablets. Repeating the same pattern, Abbott sued Teva again for
patent infringement, triggering another 30-month waiting period. Abbott
then changed TriCor's formulation and dosage a second time before Teva
could bring its generic tablets to market. After courts repeatedly ruled
against it in the patent lawsuits, Abbott dropped the patent litigation
in 2005.

Teva has since filed a countersuit alleging that Abbott's actions
violated antitrust laws. If what Abbott did is allowed, pharmaceutical
companies could switch from one formulation of a drug to another and
protect their monopolies indefinitely, Teva says in its suit, which is
scheduled for trial in November.

Abbott says it has the right to protect its innovations and denies
switching formulations for the sole purpose of warding off generic
competition. It says the two switches brought improvements for patients.
The first reformulation enabled the drug to raise patients' good
cholesterol and the second eliminated the requirement that it be taken
with food, Abbott adds.

"Any suggestion that new formulations did not offer patients benefit is
false," says Abbott spokeswoman Melissa Brotz.

Yet the data on which Abbott bases the good-cholesterol claim is from
clinical trials involving the original TriCor, not the subsequent
versions of the drug, according to publicly available FDA documents.

Teva argues that the drug's active ingredient stayed the same and that
the supposed improvements were smoke screens.

In the past several months, more than two dozen state attorneys general
have effectively sided with Teva. No hearing has been scheduled on the
states' lawsuit.

"Pharmaceutical companies should not be able to get away with protecting
their patents purely on the basis of altering their products on dosage
or small changes in order to keep their profits up," says Florida
Attorney General Bill McCollum, who is spearheading the multistate suit.
"The public interest is for patents to eventually expire."

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