[Pharm-policy] CNNfn: generic approval time grows

[Mike Palmedo]

http://cnnfn.cnn.com/2001/06/28/companies/generic_approval/index.htm

<snip>

 Average approval time for generic drugs according to the FDA.

1995 - 35.3 months
1996 - 33.2 months
1997 - 25.6 months
1998 - 22.5 months
1999 - 19.9 months
2000 - 22.3 months

<snip>

Analysts said one reason for the increased approval time could be
patent-holders prolonging court battles against proposed generic
alternatives. And those battles could get even nastier with some of the
top-selling drugs up for expiration.

Earlier this month Mylan Laboratories Inc. (MYL: up $0.69 to $29.00,
Research, Estimates) won FDA approval of cholesterol-lowering agent
lovastatin – the generic version of Merck's Mevacor – and Merck
immediately acquired a temporary restraining order for a fuller hearing.

In May, Eli Lilly & Co. (LLY: down $0.39 to $73.63, Research, Estimates)
lost an appeal on the approval of its top-selling anti-depressant
Prozac, which had sales of $2.5 billion last year.

Lilly is still considering a rehearing or taking the matter to the
Supreme Court, but is running out of time as Barr Laboratories Inc.
(BRL: up $1.07 to $70.02, Research, Estimates) intends to launch its
generic version on Aug. 2.

And AstraZeneca PLC is still in court battling for the patent to remain
on the world's best-selling drug, ulcer treatment Prilosec, which had
sales of $6.5 billion last year.

---------------------------------------------

 Drug patent profit extended

Generic approval time grows, giving patent holders longer to reap
earnings

June 28, 2001: 7:34 a.m. ET

NEW YORK (CNNfn) - Pharmaceutical stocks are usually a safe haven for
investors in times of economic trouble, according to experts. After all,
even during a slowdown consumers still need to buy medication.

But when Merck & Co. stock tumbled after warning on second-quarter
revenue and earnings on June 22, pulling the entire drug sector down
with it, things looked a little more shaky.

Merck (MRK: down $0.15 to $65.49, Research, Estimates) cited
disappointing sales of its arthritis drug Vioxx, which was expected to
make up for a shortfall in sales of hypertension treatment Vasotec,
ulcer medicine Pepcid, and Mevacor, a cholesterol fighter; all of whose
patents expired this year.

Once a company loses its patent and generic alternatives become
available, drugmakers can see revenue for the product fall as much as 80
percent. But new data, suggesting the time for generic drug approval is
on the rise, could mean a little more time for pharmaceutical companies
to squeeze profits from top-selling drugs and provide a little more
bottom-line stability.


Generic approval time increases

According to statistics released by the FDA, in 2000 the mean average
time for generic drug approval increased for the first time in five
years.

For the 232 generic drug approvals in fiscal 2000 the average approval
time was 22.3 months, up 2.4 months from average time of the 198
approvals in 1999.

   GENERIC APPROVALS BY FISCAL YEAR
    Average approval time for generic drugs according to the FDA.

1995 - 35.3 months
1996 - 33.2 months
1997 - 25.6 months
1998 - 22.5 months
1999 - 19.9 months
2000 - 22.3 months

Since 1995, when the FDA averaged 35.3 months for generic approval, the
time has decreased steadily. Preliminary data for fiscal 2001 are not
yet available.

According to Jeffrey Kraws, pharmaceutical analyst with Gruntal & Co., a
continued increase in approval time will have more of an impact, with a
record number of drugs losing patents during the next three years.

"If the generic doesn't get out there then the pharmaceutical company
(with the patent) obviously benefits," Kraws said.

But he did not see any current effect on the drug sector and said the
companies are doing the right thing by investing in their drug pipelines
to have replacement drugs at the ready when patents expire.

The FDA said during fiscal 2000 the median approval time for new drugs
was 11.6 months, down 3 percent from the previous fiscal year.


Take them to court

Analysts said one reason for the increased approval time could be
patent-holders prolonging court battles against proposed generic
alternatives. And those battles could get even nastier with some of the
top-selling drugs up for expiration.

Earlier this month Mylan Laboratories Inc. (MYL: up $0.69 to $29.00,
Research, Estimates) won FDA approval of cholesterol-lowering agent
lovastatin – the generic version of Merck's Mevacor – and Merck
immediately acquired a temporary restraining order for a fuller hearing.

In May, Eli Lilly & Co. (LLY: down $0.39 to $73.63, Research, Estimates)
lost an appeal on the approval of its top-selling anti-depressant
Prozac, which had sales of $2.5 billion last year.


Click here for pharmaceutical stocks

Lilly is still considering a rehearing or taking the matter to the
Supreme Court, but is running out of time as Barr Laboratories Inc.
(BRL: up $1.07 to $70.02, Research, Estimates) intends to launch its
generic version on Aug. 2.

And AstraZeneca PLC is still in court battling for the patent to remain
on the world's best-selling drug, ulcer treatment Prilosec, which had
sales of $6.5 billion last year.

But AstraZeneca also has a backup plan and has already put a successor
to Prilosec, Nexium, on the shelves.

Pharmaceutical firms develop new versions of successful drugs – either
chemical cousins that may be more potent or produce fewer side effects
than the original, or combination therapies that use their product in
conjunction with another compound to treat a different type of illness
or that offer more effective treatment. The new products can't prevent
the introduction of generic competition to the original brands, but they
can help the companies retain patients who might be looking for the
cheaper generic alternative.

Schering-Plough Corp. (SGP: down $0.54 to $36.44, Research, Estimates)
is also trying to get ahead of the game with a successor to No. 1
allergy medicine Claritin, which is scheduled for patent expiry in 2002.
The company put its hopes on a non-sedating antihistamine known as
desloratadine to keep customers.