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ABT TEVA TriCor Case May Illuminate Patent Limits

http://online.wsj.com/article/SB121236509655436509.html

By SHIRLEY S. WANG
June 2, 2008

Pharmaceutical makers go to great lengths to protect their exclusive marketing rights to best-selling brand-name drugs. But a pair of lawsuits and a government antitrust investigation involving a drug made by Abbott Laboratories could help define how far those companies can legally go to fend off copycat rivals.

The controversy centers on one of Abbott's biggest moneymakers, a 33-year-old cholesterol medicine called TriCor, which racked up U.S. sales of $1.2 billion last year. State and federal authorities are examining whether Abbott violated antitrust laws in its efforts to prevent an Israeli company from successfully selling a generic version of the drug.

The outcome could provide legal signposts for major drug makers to follow in seeking to extend the lives of their brand-name drugs. Those companies have struggled in recent years to find replacements for their aging blockbusters and also face generic competitors increasingly seeking to enter the market for drugs that are still under patent.

Drug companies typically have three to 10 years of exclusive patent rights remaining when their products hit the market. But they often find ways to extend their monopolies by patenting slight improvements to those medications. Critics say some of these methods are abusive and hurt consumers and government health plans by denying them access to legitimate low-cost alternatives.

In a lawsuit filed in federal court in Delaware, 25 states and the District of Columbia allege that, in addition to filing new patents on questionable improvements to TriCor, Abbott engaged in a practice known as "product switching." That involves retiring an existing drug and replacing it with a modified version that is marketed "new and improved," preventing pharmacists from substituting a generic for the branded drug when they fill prescriptions for it.

Product switching isn't against the law, but the states' lawsuit alleges that Abbott acted improperly by employing it and other strategies solely to preserve its monopoly on TriCor. The Federal Trade Commission is investigating the same issue. Abbott denies any wrongdoing.

The TriCor saga dates back to the 1960s, when the drug, known generically as fenofibrate, was discovered by Laboratoires Fournier of France. Fournier began selling the product in Europe in 1975.

More than two decades later, Abbott, based in suburban Chicago, licensed the U.S. rights to the drug and won approval from the Food and Drug Administration to market it under the brand name TriCor. The drug's underlying patent had expired, but Abbott patented a new way to make it.

I n 1999, one year after TriCor hit the U.S. market, generic-drug maker Novopharm Ltd., soon after acquired by Israeli rival Teva Pharmaceuticals Industries Ltd., applied to the FDA to market a copycat version of the drug. Abbott struck back. It sued Teva, alleging patent infringement.

The lawsuit triggered a 30-month waiting period under the 1984 Hatch-Waxman Act, during which a copycat drug can't be launched while patent challenges are worked out.

During the waiting period, Abbott altered its product, lowering the dosage and changing it to a tablet from a capsule. After filing a patent on this modified form of TriCor, Abbott bought back the remaining supplies of the capsules from pharmacies and replaced them with the lower-dose tablets.

By the time 30 months had elapsed and Teva was ready to launch its generic version of the drug, there was no longer a market for it. The reason: FDA rules say a pharmacist can substitute a cheaper generic for a branded drug only if they are strictly bioequivalent. Not only does that mean the generic version must contain the same active ingredient, it also must also be in the same form and dosage.

Since Teva's generic capsules were no longer technically bioequivalent to Abbott's new TriCor tablets, pharmacists couldn't automatically dispense them in place of the branded drug.

In June 2002, Teva asked the FDA to let it sell a generic version of the TriCor tablets. Repeating the same pattern, Abbott sued Teva again for patent infringement, triggering another 30-month waiting period. Abbott then changed TriCor's formulation and dosage a second time before Teva could bring its generic tablets to market. After courts repeatedly ruled against it in the patent lawsuits, Abbott dropped the patent litigation in 2005.

Teva has since filed a countersuit alleging that Abbott's actions violated antitrust laws. If what Abbott did is allowed, pharmaceutical companies could switch from one formulation of a drug to another and protect their monopolies indefinitely, Teva says in its suit, which is scheduled for trial in November.

Abbott says it has the right to protect its innovations and denies switching formulations for the sole purpose of warding off generic competition. It says the two switches brought improvements for patients. The first reformulation enabled the drug to raise patients' good cholesterol and the second eliminated the requirement that it be taken with food, Abbott adds.

"Any suggestion that new formulations did not offer patients benefit is false," says Abbott spokeswoman Melissa Brotz.

Yet the data on which Abbott bases the good-cholesterol claim is from clinical trials involving the original TriCor, not the subsequent versions of the drug, according to publicly available FDA documents [LOL].

Teva argues that the drug's active ingredient stayed the same and that the supposed improvements were smoke screens.

In the past several months, more than two dozen state attorneys general have effectively sided with Teva. No hearing has been scheduled on the states' lawsuit.

"Pharmaceutical companies should not be able to get away with protecting their patents purely on the basis of altering their products on dosage or small changes in order to keep their profits up," says Florida Attorney General Bill McCollum, who is spearheading the multistate suit. "The public interest is for patents to eventually expire.”



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