[Pharm-policy] Jerry Hirsch in LA Times on Taxol patent dispute and barriers to generic entry

[James Love]

http://www.latimes.com/news/front/20000906/t000083729.html

     Wednesday, September 6, 2000 

     Patent Fight Delays Cheaper Cancer Drug 

     By JERRY HIRSCH, Times Staff Writer


More than $500 million annually could be slashed from the cost of
treating breast and ovarian cancer once a generic version of the drug
Taxol becomes available. How soon, though, depends on the outcome of a
complicated patent dispute that will be heard today in a federal
courthouse in Los Angeles. 

Analysts have called the Taxol case a "poster child" for problems in the
way the pharmaceutical industry is regulated. 

The case also pits intellectual property rights against the rising cost
of health care and raises questions over how much a company should
profit from a drug discovered by government scientists. 

Moreover, the legal battle over Taxol is the latest example of the
protracted delays that keep generic versions of important drugs off the
market--and out of the hands of poorer patients. 

  [snip]

At today's court hearing, U.S. District Judge William Matthew Byrne Jr.
will review the claims of three companies, all with an interest in the
drug. What Byrne decides will determine whether pharmaceutical giant
Bristol-Myers Squibb Co. gains 30 additional months of unhindered sales
of Taxol--worth at least $2 billion--or whether generic specialist Ivax
Corp. will be able to sell a lower-priced version. 

Government officials and industry observers maintain that because the
financial stakes are so huge, the pharmaceutical companies have learned
how to use cumbersome drug regulatory laws to delay approval of generic
drugs for as long as possible. Such tactics cost consumers--including
the government, employers and other insurance providers--billions of
dollars in added health-care expenses. 

"This is simply an industry that is out of control," said Cindy Pearson,
executive director of the National Women's Health Network. "There
doesn't seem to be a company within it that is reasonable." 

   [snip]


Even a seeming victory for consumers can become unhinged by regulatory
delays. A U.S. Court of Appeals ruled last month that Prozac
manufacturer Eli Lilly & Co. could not extend its patent by two years to
2003. But Lilly plans to come out with a pediatric version of the
antidepressant soon, a move that would give the company a six-month
extension because the government rewards manufacturers that develop
drugs for children. 

As the only Taxol manufacturer, Bristol-Myers makes about $3 million a
day selling the breast cancer drug in the United States. But once a
generic version comes on the market, the price of the drug--which costs
$1,000 to $3,000 per course of treatment--would fall by about a third in
the first six months and by half after that. 

Although Taxol was discovered by government scientists, Bristol-Myers
has had exclusive rights to develop and market the drug since 1992. But
last month, smaller rival Ivax won tentative approval from the Food and
Drug Administration for its generic equivalent of Taxol. 
                             
   If Ivax gets final clearance, it will get exclusive rights to market
the drug for six months for having been the first to file a generic
Taxol-related patent with the government. 

But in recent weeks a third party has emerged waving its own
Taxol-related patent, and it is the ensuing courtroom fight that's
threatening to delay the roll-out of a generic version by more than two
years. 

Looking to get a piece of the Taxol gold mine, tiny Santa Monica-based
biotech firm American BioScience Inc. sued Bristol-Myers to force it to
recognize its Taxol-related patent and list it with the government. 

Bristol-Myers rapidly agreed to settle with American BioScience. But
Ivax opposed the agreement and its arguments will be heard by Byrne
today. 

If the settlement is approved, Ivax will be forced to prove that its
drug does not infringe American BioScience's patent. And although most
believe Ivax will ultimately prevail, the action would nonetheless
trigger a 30-month FDA waiting period. 
        
Ivax already sat through one 30-month waiting period, which ended this
summer, while it successfully fought off a Bristol-Myers lawsuit
challenging its right to make paclitaxel, the generic form of Taxol. But
in the time it took Bristol-Myers to lose the lawsuit, the company
reaped several billion dollars more in Taxol sales, which reached $1
billion annually in the United States last year. 

Bristol-Myers would not comment on the American BioScience lawsuit or
the proposed settlement. But Miami-based Ivax contends that it is in
Bristol-Myers' interest to find ways to keep triggering waiting periods
and delaying generic versions of Taxol from hitting the market. 

Bristol-Myers defends its action in the handling and pricing of Taxol.
The New York-based drug behemoth said it has invested about $1 billion
in the drug, including funding for 600 clinical trials. 

"We spent that money to get the drug off of the laboratory shelves and
into hospitals and we have continued to develop Taxol to treat more
types of tumors and cancer," said Pat Donohue, a corporate spokesman. 
Health-care advocates, however, believe Bristol-Myers has had a fair
period of exclusive rights to Taxol and now should stand aside to allow
competition--and lower prices. 
        
"This is beyond a matter of profit," said Larry Sasich, a pharmacist
with Public Citizen's Health Research Group in Washington. "This is an
issue of pure, blatant greed."  Sasich called the Taxol case an example
of how drug companies "scratch at every means possible to get extended
exclusivity for their product." 

Such tactics are why there is growing interest in revising the 1984 law
that regulates generic competition of pharmaceuticals. Rep. Henry A.
Waxman (D-Los Angeles), coauthor of the legislation, said drug companies
have figured out how to use the law "to hamper and delay generic
approvals." But he doubts any change in the law is possible before the
November election. 

Waxman noted that Schering-Plough, maker of the blockbuster anti-allergy
drug Claritin, has tried unsuccessfully to attach patent extensions to
appropriations bills and even agricultural legislation. 

Waxman said that among other "anti-competitive" tactics are agreements
under which brand-name drug makers essentially pay generic companies to
stay out of the market. Two years ago, according to Waxman, Ivax agreed
to defer marketing a generic version of Abbott Laboratories'
hypertension drug Hytrin for two years in return for quarterly payments
of $6 million. 
The Taxol case, however, "is particularly egregious because much of the
research to develop this drug was done by the National Cancer Institute
at taxpayer expense," Sasich said. 

  [snip]

American BioScience filed its first patent application for Taxol in
1993, said Joseph F. Coyne Jr., the company's attorney. It languished
until this summer, when it was approved by the U.S. Patent Office. 

American BioScience went to court Aug. 11 and won a preliminary order
forcing Bristol-Myers to list its patent, which Coyne said covers
improvements in how Taxol is administered. Ivax officials and others in
the industry believe American BioScience's claims might not survive a
court test, though. 

But if American BioScience succeeds in court, it might be able to force
the larger companies to pay it a license fee or royalties, or it could
decide to make the drug itself. 

"Our company has a right to be rewarded for its innovation," Coyne said.
"The way you motivate people to do research is with profits." 

    [snip]

-- 
James Love  mailto:love@cptech.org http://www.cptech.org
Consumer Project on Technology, P.O. Box 19367, Washington, DC 20036
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