Copyright 1999 The Times-Picayune Publishing Co.
The Times-Picayune
June 27, 1999 Sunday, ORLEANS
SECTION: NATIONAL; Pg. A1
LENGTH: 1885 words
HEADLINE:
CLARITIN PATENT AT CENTER OF BATTLE;
DRUG
MAKER LOBBIES TO EXTEND MONOPOLY
BYLINE: By Bill Walsh
Washington bureau
DATELINE: WASHINGTON
BODY:
For millions of people, Claritin has been a
miracle drug, a tiny pill with the power to relieve the worst
itching and sneezing that the allergy season can bring.
For its maker,
Schering-Plough Corp., Claritin has been a wonder of a different sort. The
drug's enormous popularity worldwide has generated record sales
for the New Jersey company, $2.3 billion last year.
But storm clouds are
gathering on the horizon for the maker of the world's best-selling
antihistamine. When the drug's patent expires in 2002, generic
drug makers will be able to move in and market their own
low-cost versions of Claritin, not only grabbing a share of Schering-Plough's
market but forcing the company to lower its price. With billions of dollars at
stake, Schering-Plough has been looking for relief of its own on Capitol Hill.
For the past three years, the company has waged a relentless campaign in
Congress to extend Claritin's patent. Powered by a
multimillion-dollar lobbying assault and a barrage of well-timed campaign
contributions, Schering-Plough has used a variety of strategies to protect its
monopoly. That's not uncommon among pharmaceutical companies, especially those
with blockbuster drugs such as Claritin.
The debate
exposes the political and policy tensions between a drug
company's rights to recover research and development costs, including those for
products less lucrative than Claritin, and the public's right to low-cost
drugs through the power of competition.
Schering says
it wants more time to exclusively market Claritin to make up for the years it
lost -- needlessly, the company says -- in the federal review process. But
consumer groups and generic competitors, who have mounted a savvy and forceful
political campaign of their own, say the company is trying to manipulate the
system to reap huge profits by delaying competition.
"To me, it's like
robbery in broad daylight," said Martha Kealey, a consumer advocate with Ralph
Nader's Public Citizen, a nonprofit watchdog group. "They have figured out that
they can attempt to use the political process for monopoly price protection far
beyond what is in any way legitimate. If they get away with it, it's a message
to any company with a best-selling drug: You did it for
Claritin, why not me?"
By any measure, Claritin spent a long time under
the federal government's microscope. In 1986, when Schering first applied for
FDA clearance, the agency was taking about 28 months to approve
drugs for sale. But it wasn't until 1993 that the FDA gave the
final OK to Claritin.
All the while, the clock on Claritin's
patent, its right to exclusively market the
drug domestically and control the price, was ticking. The
reasons for the lengthy FDA review are a matter of intense dispute. Recently,
Congress asked the Government Accounting Office to get to the bottom of it.
Schering says it got caught in a bureaucratic sinkhole. It says its
application was given low priority by the FDA, which it says was understaffed at
the time, and a series of "unanticipated events" dragged the review out over
years.
To settle that complaint, bills filed in Congress by Rep. Ed
Bryant, R-Tenn., and Sen. Robert Torricelli, D-N.J., would give the
Patent and Trademark Office authority to investigate whether
Schering-Plough got a fair shake in front of the FDA and, if not, extend the
patent for as much as three years.
"We're not looking
for an automatic extension. We would like an independent body,
like the Patent Office, to look at this," said William
O'Donnell, a spokesman for Schering-Plough. "We believe we acted in due
diligence at all stages of the review process."
What is clear is that
FDA reviewers and company officials were in regular contact throughout the 6
1/2-year review, sometimes telephoning daily.
It wasn't idle chitchat,
as illustrated by documents obtained from the FDA through the Freedom of
Information Act. For nearly three years, government scientists raised concerns
because the active ingredient in Claritin in some experiments appeared to
promote the growth of cancers in lab rats. They repeatedly questioned company
testing results until they were satisfied the drug was safe.
The FDA also questioned other company information. Claritin had been
tested in capsule form but Schering-Plough wanted to sell it as a tablet. The
FDA reviewers persistently expressed doubts that the two forms were chemically
equivalent until the company performed more tests, adding to the delay.
Not all of the FDA's concerns were purely scientific, documents show.
The agency objected to the company's proposed ads for Claritin and demanded
"significant revisions" in December 1992. It would be three months before the
two sides reached an agreement.
Documents also suggest that the company
may have contributed to the delay by amending its Claritin application several
times during the review. And according to the company's own documents, on at
least two occasions Schering failed to send to the FDA studies the agency had
requested.
Company critics, namely consumer groups and generic
competitors, blame Schering for the Claritin delay and oppose the company-backed
legislation to re-examine the FDA approval process.
Rep. Henry Waxman,
D-Calif., who has opposed the company's Capitol Hill campaign at every turn,
derides the Bryant and Torricelli legislation as the "Claritin Monopoly
Extension Act."
It "is nothing more than a recycled
version of the patent extension Schering-Plough has attempted
on repeated occasions to sneak into law," Waxman said.
There's plenty at
stake for Schering-Plough. The company makes other well-known goods, such as Dr.
Scholl's foot products and Coppertone tanning lotion, but Claritin is the engine
that fuels the company's growth.
Originally, the patent
on Claritin was set to expire last year. But the active ingredient in Claritin,
loratadine, has had its market exclusivity extended twice.
The first
time was in the mid-1980s, when Congress gave a one-time
extension to a host of drugs in an effort to
spur more research by enticing drug companies with longer
monopolies. Some received five extra years, but others, including Claritin, got
two.
A decade later, Claritin and hundreds of other products won another
patent extension as part of the Global Agreement on Tariffs and
Trade. The United States stretched all domestic patent lives
from 17 to 20 years to track international laws.
But beginning in 1996,
the company tried to win more extensions by having friendly
lawmakers, usually those from Tennessee or New Jersey where Schering has major
corporate operations, insert language into session-ending spending bills.
It hardly mattered that the bills had nothing to do with health care.
Appropriations bills are a favorite target for special-interest legislation
because they are so dense, sometimes thousands of pages long, that items can
slip past opponents.
But each time pro-Claritin language surfaced,
consumer groups and generic drug makers howled in protest,
compelling the sponsors to withdraw it. In fact, the opposition has proven
remarkably successful in keeping Schering-Plough and other drug
makers from winning patent extensions from Congress.
At
a time of soaring drug prices, low-cost generic
drugs have tremendous political appeal. Because the generic
versions, which are often as much as 60 percent cheaper, can only be sold after
brand-name patents expire, it is easy to portray companies
seeking patent extensions as anti-consumer.
The generic
drug companies have the political good fortune of being aligned
with consumer advocates. And they have made the most of it, taking out
pro-consumer newspaper ads blasting the Bryant-Torricelli legislation and
working with seniors groups to pressure co-sponsors.
Those companies
have not relied solely on the grass-roots campaign to make their point on
Capitol Hill. Records show that the Generic Pharmaceutical Industry Association
contributed $20,500 to the Republican Party in March 1998. Individual
drug makers, such as Barr Laboratories in New York, kicked in
$34,500 to the GOP. All the contributions were in "soft money," which is
restricted to get-out-the-vote and party-building activities and is not
regulated by the federal government.
Still, their financial investment
pales in comparison to what Schering-Plough has spent trying to protect its
monopoly on Claritin. Information compiled by the Center for Responsive Politics
shows that the company spent $2.6 million lobbying in 1997. The chief recipient
was Baker Donaldson, a Tennessee company headed by Howard Baker, a former
senator and White House chief of staff.
The company has bought other
big-name talent including Peter Knight, a prominent Democratic fund-raiser and
Clinton-Gore ally, and former Sen. Dennis DeConcini, D-Ariz., and Rep. Vin
Weber, R-Minn.
Despite the lobbying muscle, it quickly became evident
that a flat-out extension of Claritin's patent
was not going to work. So, the company tried a novel approach. Along with
drug maker Bristol-Myers Squibb, Schering proposed simply
buying an extension.
Under the plan, makers of selected
drugs, including Claritin and Bristol-Myers' cancer treatment
Taxol, would pay the government 3 percent of royalties to be earmarked for
biomedical research. In exchange, the companies would win
extensions on their patents for as long as
five years.
The proposal attracted plenty of attention but little
political support.
The company then opened up another front in Congress,
this time through the auspices of Sen. Frank Lautenberg, D-N.J. Lautenberg said
Claritin's lengthy approval by FDA should be reviewed by the
patent commissioner, a proposal that would resurface in 1999
behind the Tennessee-New Jersey team of Bryant and Torricelli.
With
Claritin's patent deadline looming, the company stepped up
pressure on Congress. In 1998, Schering had nine lobbying companies under
contract, and its lobbying payroll swelled to $4.2 million, records show.
Between 1997 and 1998, the company's political action committee gave
more than $280,000 to the Democratic and Republican parties.
In March,
the company's political action committee sent a $50,000 check to the Democrats'
Senate fund-raising arm. As negotiations over appropriations heated up in
September in the Republican-controlled House, the company paid $100,000 to the
GOP's congressional fund-raising wing. Thirteen days later, it wrote a $50,000
check to Senate Republicans -- again, all in soft money.
But again, it
wasn't enough. In a final mad dash, House Republican leaders tried to attach
Lautenberg's amendment onto the omnibus appropriations bill, a 4,000-page
document that accounted for two thirds of federal spending. Lawmakers openly
complained that the document was so big they hadn't read it. But before the bill
was finalized, opponents caught wind of the maneuver and publicly labeled
sponsors as anti-consumer. The provision was withdrawn.
The company has
come back this year with the Bryant-Torricelli bills, which are expected to get
their first public hearing in July.
Company officials said they have
been wholly above-board in their efforts. They also say that they will continue
pressing Congress until the patent life on Claritin is extended
or it expires, whichever comes first.
LOAD-DATE: June
29, 1999 
