Copyright 2000 / Los Angeles Times
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September 6, 2000, Wednesday, Home Edition
SECTION: Part A; Part 1; Page 1; Financial Desk
LENGTH: 1587 words
HEADLINE:
PATENT FIGHT DELAYS CHEAPER CANCER DRUG
BYLINE: JERRY HIRSCH, TIMES STAFF WRITER
BODY:
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.
For major pharmaceutical companies, extending their exclusive rights to
sell these blockbuster drugs--even if it involves mere days or
weeks--can mean millions in additional profits.
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."
Pressure on
drug companies to maintain their exclusive rights is expected
to increase as a number of blockbusters with combined annual sales of $ 34
billion--more than a quarter of the $ 120 billion raked in yearly by the
drug industry--will lose patent protection in
the next five years, said Leonard Yaffe of Banc of America Securities.
Barring legal maneuvers such as those affecting Taxol, the
drugs expected to come off patent include
big-name allergy drug Claritin, cholesterol fighter Zocor and
blood pressure treatment Vasotec.
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.
Back in 1958, the federal government started a program to test plants
for anti-cancer properties.
Five years into the program, government
botanist Kurt Blum came across the bark of the Pacific yew tree in a Washington
forest.
Bristol-Myers reached a so-called commercial research and
development agreement with the government to take over development of Taxol in
1989 and won FDA approval in December 1992.
The drug
took off, becoming an incremental but important advance in treating ovarian and
breast cancer.
"It wasn't a cure, but it did move the needle on how long
people can survive with ovarian cancer," said Dr. Ted Trimble, an oncologist
with the National Cancer Institute.
Trimble said Taxol, named after the
yew's Latin name, Taxus brevifolia, has shown promise in treating breast and
lung cancer and Kaposi's sarcoma, a cancer that often afflicts AIDS patients.
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."
If that means the price of the drug
remains at its current level for a while, that's the way intellectual property
law works, he said.
"I don't think there are any cancer patients not
getting Taxol because it is a third higher than it would be otherwise," Coyne
said.
That's not always the case, according to health professionals.
But the cancer ward at D.C. General Hospital in Washington avoided using
Taxol as a first treatment for ovarian cancer as recently as 1998 because of
cost issues, said oncologist Dr. Margaret Akpan.
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