Copyright 1999 Boston Herald Inc.
The Boston Herald
August 16, 1999 Monday ALL EDITIONS
SECTION: FINANCE; Pg. 039
LENGTH: 955 words
HEADLINE:
Claritin patent ending? Copley seeks generic OK
BYLINE:
By Jennifer Heldt Powell
BODY:
Usually companies
work diligently to avoid being sued. But earlier this year, Copley
Pharmaceutical Inc. did everything it could to be taken to court.
In
March, the Canton-based generic drug manufacturer filed an application with the
Food and Drug Administration for approval on a generic liquid version of the
popular allergy medication Claritin.
Drug giant Schering-Plough Corp.
makes Claritin, but a patent on the medicine expires in 2002. Another patent, on
the substance Claritin becomes after it is injested, known as the metabolite,
protects Schering from competitors until 2004.
Copley charges that the
metabolite patent is invalid because its ingredients were disclosed in the
original Claritin patent.
Copley's bid for an FDA permit to make a
generic form of the medication was the pharmaceutical world's equivalent of a
dare.
Schering took up the challenge and charged Copley in U.S. District
court with patent infringement.
If Copley wins, it can begin selling a
Claritin knockoff as soon as the first patent expires in 2002. Even better, it
will be allowed to sell its drug for 180 days before any other generic company
can sell another version under an obscure law, the Hatch-Waxman
Act of 1984.
The law aimed to encourage generic drug makers to develop
low-cost rivals for name-brand medicines. It's a reward for spending millions of
dollars on a legal challenge.
"If you're the only one out there and
everyone wants a generic, then for 180 days people will be buying from you and
you get your foot in the door," said Copley executive vice president, general
counsel and secretary Gene M. Bauer.
Such clashes are becoming more
common as the pharmaceutical world grows more lucrative and competitive.
Companies spend an average of five years and $ 500 million bringing a
drug to market, Schering says. Most drugs never make it. When companies finally
get a blockbuster like Claritin, they hang on to it for as long as possible.
Last year, Americans snapped up $ 1.9 billion worth of Claritin. That
accounted for one-third of Schering's total U.S. revenue.
Those gains
are behind the push by Schering and other drug makers for federal legislation
that could extend the patents on eight medicines that slogged through the
regulatory process. Supporters claim the companies lost valuable marketing time
because of delays in getting FDA approval.
Drug companies are given
20-year rights to patented substances. But the clock starts ticking long before
the drug is ready for the market. Going through the testing and approval process
can take years.
Sales of brand name drugs often drop off within weeks of
patent expirations as generic rivals emerge. In Massachusetts, as in most
states, pharmacists are required to provide generic substitutes for brand-name
drugs if they are available. In addition, insurers offer financial incentives to
clients to use generics.
Copley and other generic drug makers oppose any
patent extensions. They are supported by consumer advocates and others who say
that the brand names should make room for cheaper generics.
"No one is
against innovation and no one is against rewards for invention and no one is
against legitimate profit," said Steven L. Grossman, owner of J.E. Pierce
Apothecary in Brookline. "The problem is when it appears to be price gouging and
when it appears to be getting one's patent extended simply to make more money."
The bill has also been opposed by the Israeli company Teva
Pharmaceutical Industries Ltd., which plans to buy Copley for $ 220 million.
Schering's recent campaign for a patent extension is rooted in the
Hatch-Waxman Act of 1984. That law lets drug makers petition
for extensions of up to five years to compensate for regulatory delays. Drugs
already in the review proces, so-called "pipeline drugs," including Claritin,
were granted only two-year extensions.
But the Claritin review took more
than six years, three times longer than normal, Schering claims. By the time
Claritin reached the market, just seven years remained on its patent
- the marketable average drug has 12.6 years of patent protection.
But under a 1994 global trade treaty, the General Agreement on Tariffs and
Trade, Claritin won a two-year extension.
Under legislation proposed in
the House and Senate, makers of the pipeline drugs could seek an additional
three-year extensions of their patents.
Supporters say strong patent
protections are necessary to encourage companies to spend more on finding new
drugs.
"Pharmaceutical research involves both high risk and an enormous
investment of resources," said Richard Jay Kogan, Schering's chairman and chief
executive, testifying for the bill at a Senate Judiciary Committee hearing.
"Without fair patent protection, we simply could not generate the necessary
capital that allows us to make these risky and large investments."
Schering has nearly doubled its research spending since the U.S.
introduction of Claritin in 1993, Kogan said.
If the legislation fails,
consumers could save more than $ 11 billion by buying generic alternatives from
2002 to 2012, according to a report by the University of Minnesota's Institute
of Pharmaceutical Research in Management and Economics. The study was funded in
part by generic drug makers.
On Claritin imitations alone consumers can
expect to save $ 7.33 billion by 2007, the report said. Copley Pharmaceutical
hopes to facilitate a good deal of that savings, and reap a windfall in the
process.
Photo Caption: DRUG WAR: Steven L. Grossman of J.E. Pierce
Apothecary in Brookline counts Claritin tablets. Copley Pharmaceutical Inc. is
seeking FDA approval to make a generic version of the allergy medication. Staff
photo by Patrick Whittemore
LOAD-DATE: August
16, 1999 
