FDA Ruling Will Extend Brand-Name Drug Patents : Pharmaceuticals: Move will hurt makers of generics. Agency says GATT forced it into decision.

In a costly setback for makers of generic drugs, the Food and Drug Administration ruled Thursday that certain brand-name drugs can keep their monopoly in the market for up to three extra years.

The agency said it was forced into the decision because of a new global trade agreement and the way Congress chose to implement it.

The lawmakers may have been unaware of how implementation of the General Agreement on Tariffs and Trade would affect competition in the prescription drug market. GATT extends patent protection to 20 years for a wide range of products. Drugs in the United States have had 17-year patents from the time they were approved. Effective June 8, the patents will grow to 20 years from the date the manufacturers made the patent filings.

“Our legal analysis was that the generic companies have to wait until the extended patent expires before they may market their products,” said William B. Schultz, the deputy FDA commissioner who handed the victory to drug firm Glaxo Wellcome Inc.

Glaxo’s Zantac, an ulcer remedy that was due to lose its patent protection in December, will be able to keep its monopoly until July, 1997, under the agency’s ruling. Zantac, one of the top-selling medicines in the world, costs $83 for a month’s supply, the company says.

Generic makers had hoped to bring Zantac copies onto the market at year’s end at half that price.

Sen. David Pryor (D-Ark.), who had tried to dissuade the FDA from taking the position it took Thursday, warned that the move would cost consumers billions of dollars in higher prices for years. He said he would try to rush through legislation to override the FDA.

“It means that there’s going to be unjust enrichment for several drug companies. This is a classic case of unintended consequences,” said Pryor, who has long crusaded against high drug prices. “This was never intended by Congress, it was never intended by anyone negotiating GATT. It was an error, and it should have been corrected by FDA.

“GATT’s whole intention was to help consumers. This goes just the other way,” Pryor said.

Lewis A. Engman, president of the Generic Pharmaceutical Industry Assn., called the FDA decision “outrageous.”

“Today FDA chose to give big drug companies windfall profits which will be paid for by American consumers,” Engman said. “I am surprised that this Administration would force consumers to pay dramatically higher prices for drugs.”

“I predict that this matter is far from settled,” said Engman, whose member companies are likely to take the matter to court.

But Nancy Pekarek, manager of media relations for Glaxo, based in Research Triangle Park, N.C., hailed the decision, saying, “It preserves the integrity of the GATT agreement in terms of 20-year patent protection.”

She said it will help consumers by giving the pharmaceutical companies that develop drugs a bigger incentive to discover new medicines.

“Patent protection is the lifeblood of our industry,” she said.

The FDA action means that an estimated 109 drugs under existing patents as of June 8 will get the benefit of the longer protection period. It is expected to mean an average of about 20 months’ extra protection.