Ruling Shortens Branded Drugs’ Monopoly

Nearly 100 brand-name drugs lost their chance at an extra few years’ monopoly in the market Wednesday under a ruling by the U.S. Patent and Trade Office.

At issue is whether the drugs could get two patent extensions, one from a 1984 law and another under a global trade agreement provision that takes effect today.

The General Agreement on Tariffs and Trade extends patent protection to 20 years from the date drug makers file for a patent. Until now, those patents have had a 17-year life from the time they were granted. Current patent holders will get whichever expiration date is later.

A 1984 law has already offered brand-name drugs up to an extra five years’ patent life to help offset the time it takes those medicines to get Food and Drug Administration approval for sale.

Makers of brand-name drugs said they were entitled to both extensions, and in March the patent office tentatively agreed. The proposal theoretically could have given some drugs patent protection for a total of 25 years, although the Pharmaceutical Research and Manufacturers Assn. insisted that was highly unlikely.

But the patent office reversed itself Wednesday, ruling that companies that took the 1984 extension can’t also get one from GATT. The ruling affects 94 brand-name drugs and means that the longest a medicine will be able to monopolize the market because of the extension is slightly under 22 years.

“American consumers should get a price break on many drugs as a result of the patent office’s reversal” because it opens the market to quicker generic competition, said Sen. David Pryor (D-Ark.).

The brand-name industry was disappointed by the ruling.

“Their March tentative ruling was the correct one from a legal standpoint,” said Neil Mulcahy, an attorney for the pharmaceutical association.

Another 15 drugs, including the billion-dollar ulcer drug, Zantac, will get the GATT extension.

But Pryor renewed his pledge to fight those drugs’ market exclusivity. GATT had included a provision saying cheaper generic versions of these drugs could proceed to the market on the brand name’s original expiration date if they paid the competitor compensation. But the FDA last month said prior law invalidated that provision, meaning GATT will postpone generic competition for these 15 drugs.