Copyright 1999 The Houston Chronicle Publishing Company
The Houston Chronicle
July 18, 1999, Sunday 2 STAR EDITION
SECTION: BUSINESS; Pg. 2
LENGTH: 814 words
HEADLINE:
Drug firms battle over extension of Claritin
patent
SOURCE: Knight Ridder Tribune
News
BYLINE: FRANK DAVIES
DATELINE: WASHINGTON
BODY:
WASHINGTON - A high-stakes battle developing in Congress this summer has
nothing to do with party politics and ideology, and everything to do with large
profits and the cost of that popular allergy medicine in consumers' pockets.
The outcome will determine how much consumers pay for Claritin, which
generated $ 2.3 billion in sales last year as the world's top-selling
antihistamine, when its manufacturer's patent expires in a
couple of years and competitors can market a cheaper generic version.
Schering-Plough of Madison, N.J., has hired a battalion of
well-connected lobbyists to secure a patent extension three
years beyond 2002. Last year, the company spent $ 4.2 million on lobbying for
its interests, according to disclosure reports.
Consumer groups say
allergy sufferers would pay 30 to 60 percent less for a generic equivalent,
based on data from a congressional research study.
Waiting in the wings
are generic manufacturers such as Ivax of Miami, eager for a share of a
lucrative market. The chairman of another generic company, Bruce Downey of Barr
Laboratories in Pomona, N.Y., recently testified before Congress that generics
could offer the equivalent of Claritin to the average user for about $ 15 a
month, compared with the $ 87 a month it now costs.
The struggle between
generics, brand-name companies and consumer groups comes at a time when the high
cost of drugs has grabbed headlines. President Clinton has
proposed Medicare coverage of prescription drugs and GOP
leaders are suggesting drug subsidies for the poorest
beneficiaries.
Congressional reports showed drug prices
rising 8 percent a year annually from 1990 to 1995, and a study by the House
Government Reform and Oversight Committee found that senior citizens in the
United States paid 81 percent more than Canadians for the 10 most popular
drugs.
The money at stake is nothing to sneeze at. Last
year, Fortune Magazine found that the pharmaceutical industry was the most
profitable in the nation, based on rate of return on sales, assets and equity.
At a recent hearing, Rep. Marion Berry, D-Ark., a former pharmacist,
held up two identical bottles of 100 tablets of Claritin. The one from a U.S.
drugstore cost $ 218. The second, bought in Canada - where drug
prices are controlled - cost $ 61.
Groups such as Consumers Union and
Public Citizen contend the U.S. prices reflect excessive profits that should not
continue for three more years. A patent extension, Berry said,
"will punish consumers and increase profits in what is already the most
profitable industry in existence."
But Schering-Plough and the
brand-name industry say the issue is not profits but patent
fairness. Drugs such as Claritin are expensive to develop; when
they succeed, some of the profits are plowed back into developing other
drugs, a risky proposition because those drugs
may not pay off.
In addition, it takes a long time for the U.S. Food and
Drug Administration to review and approve
drugs, leaving them in the pipeline for many years before they
can be marketed. Schering-Plough began the research and development process for
Claritin some 20 years ago, but began selling it only in the early 1990s.
Schering-Plough tried unsuccessfully for two years to get a
patent extension through heavy lobbying late in the legislative
year, trying to tack a provision onto other bills. This year, the manufacturer
has adopted a direct approach, with House and Senate bills establishing a review
process in the Patent and Trademark Office to extend the
exclusive rights on seven "pipeline" drugs that went through a
lengthy review process.
Besides Claritin, the other
drugs that could get a patent extension are:
Relafen, for arthritis treatment (manufacturer SmithKline Beecham);
Cardiogen-82, a diagnostic imaging agent (Bristol-Myers Squibb); Nimotop, for
head trauma (Bayer); Dermatop, for itchy skin (Hoechst Marion Roussel);
Penetrex, for urinary tract infection (Rhone-Poulenc Rorer); and Eulexin, for
prostate cancer (Schering-Plough).
"We're in favor of a fair, equitable
process with a decision to be based on its merits," said Bill O'Donnell, a
spokesman for Schering-Plough.
Critics counter that the process in the
House bill puts the burden of proof on an opponent of the patent
extension, takes the FDA out of the review and almost guarantees
continued exclusive rights for the brand-name drugs. They also
point out that Claritin already has received two patent
extensions since 1984.
"The company knew the rules going in,
and now they want to change them," said Rep. Peter Deutsch, D-Fla., who opposes
the proposed legislation. "We have a balancing act now between innovative
drugs and generics that seems to work."
Brand-name
companies get a set period, usually about 20 years, to make and market
drugs before generic companies are allowed to sell cheaper
versions.
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