Biotech Values

[Biopharm investor]

Update on AG's

Health News Daily
via NewsEdge Corporation : August 18, 2004
Volume 16, Issue 160

Mylan is taking its fight against "authorized" generics to Capitol Hill and the Federal Trade Commission.

The company hopes to meet with Hill staffers and members of Congress to lay the groundwork for legislation against authorized generics.

The firm is approaching members of Congress who worked on the generic drug reform provisions in the Medicare Modernization Act of 2003. Those members include Sens. Orrin Hatch (R-Utah), Judd Gregg (R-N.H.), Charles Schumer (D-N.Y.), Edward Kennedy (D-Mass.) and Rep. Henry Waxman (D-Calif.).

Mylan is also eyeing members of Congress whose constituents include generic drug makers.

Any legislation against authorized generics is not likely to be introduced until the next congressional session, which begins in January.

Mylan expects to be joined by other generic firms in arguing to Congress that authorized generics are anticompetitive after being shut out at FDA.

In a July 2 response to separate citizen petitions filed by Mylan and Teva, FDA declined to prohibit the entry of authorized generics during an ANDA first-filer's 180-day marketing exclusivity period.

FDA said authorized generics appear to have a pro-competitive effect by lowering prices. The agency also asserted its does not have the authority to prohibit such deals.

Mylan has filed a lawsuit challenging FDA's decision.
The company is also understood to be taking the lead among generic firms who have approached the Federal Trade Commission with concerns about authorized generic deals.

The companies are trying to build a case that entry of authorized generics during a first-filer's 180-day exclusivity period does not result in lower prices for consumers.

The firms also are trying to persuade FTC that authorized generic deals create an anticompetitive effect because they result in fewer Paragraph IV patent challenges against brand drugs. However, it could take months or years to prove this theory through empirical data.

Whether the generic firms' arguments will have any sway on FTC is questionable, particularly since the agency has generally viewed agreements that speed the entry of generics as being pro-consumer.

In May, the agency allowed an authorized generic agreement between Bristol-Myers Squibb and ANDA first-filer Teva to proceed for the first generic version of Paraplatin (carboplatin).

Mylan's citizen petition and its current lawsuit against FDA stem from the presence of Watson's authorized generic of Procter & Gamble's Macrobid (nitrofurantoin) during Mylan's 180-day exclusivity period.

Mylan is understood to be seeking support from, and working with, other companies whose 180-day marketing exclusivity periods have been similarly impacted by the presence of authorized generics.

For example, Apotex launched its generic paroxetine (GlaxoSmithKline's Paxil) at risk almost a year ago with first-to-file exclusivity, only to encounter immediate competition from Par's authorized generic.

Barr's launch of several oral contraceptives, including generic versions of J&J's Ortho Tri-Cyclen and Ortho Novum 7/7/7, have also felt the effects of authorized generic competition from Watson.

Teva has repeatedly asserted that authorized generic deals undercut the value of exclusivity that comes from patent challenges.

During a recent earnings call, Teva CEO Israel Makov predicted authorized generics would lead to consolidation within the generic drug industry.

The Generic Pharmaceutical Association also opposes authorized generics. The group said it has not gone to the FTC with its concerns but is currently exploring all options on the issue.