Magazine article Drug Topics

Patent Wars Continue to Rage

Magazine article Drug Topics

Patent Wars Continue to Rage

Article excerpt

The decades-old battle between the generic drug industry and brand-name pharmaceutical companies over patent rights has always been a David and Goliath fight. Little David's revenues in 2001 were $11.1 billion and Goliath's were about 11 times that, at $121 billion, with 20% and higher profit margins for several big innovator companies.

We know how the biblical clash ended, and Goliath is no doubt becoming increasingly apprehensive. David got some help from friends this year, including very proactive consumer groups like Prescription Access Litigation (PAL), a Boston coalition of 70 healthcare organizations. In the past 18 months, PAL has brought nearly three dozen class action lawsuits against pharmaceutical companies charging antitrust, false advertising, and price-fixing.

As for consumers, they're turning increasingly to generics. Last year, generic drugs had a 45% market share, up 12 points in 10 years, according to FTC officials. This year, David found a powerful ally in the federal government. One of the most significant setbacks to brand-name pharmaceutical companies since the fight with generics began may have happened in April. That's when the Federal Trade Commission announced a consent agreement with Biovail Corp. of Canada over the company's attempts to use ancillary patent filings to delay generic competition to its heart drug Tiazac (diltiazem). FTC declared many of Biovail's tactics illegal, and Biovail agreed not to use additional patent filings to delay generics in the future. But, most significantly, FTC also required Biovail to surrender part of its exclusive license to the patent in question.

"FTC is being very aggressive in these cases," said David Balto, a former FTC official now with White & Case, a Washington, D.C., law firm. Forcing the divestiture of a patent is a remarkable and rarely used remedy, he said.

FTC announced in recent months that it is investigating several other cases in which brand-name drugmakers allegedly made deals with generic companies to keep generics from entering the market. In one example, FTC is investigating whether German drugmaker Bayer AG paid Barr Laboratories Inc. of Pomona, N.Y., $25 million per year to keep Barr from selling a generic equivalent of Bayer's top-selling antibiotic Cipro (ciprofloxacin), which brings in about $1 billion per year. …

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