Patent Fight Delays Cheaper Cancer Drug
More than $500 million annually could be slashed from the cost of treating breast and ovarian cancer once a generic version of the drug Taxol becomes available. How soon, though, depends on the outcome of a complicated patent dispute that will be heard today in a federal courthouse in Los Angeles.
Analysts have called the Taxol case a “poster child” for problems in the way the pharmaceutical industry is regulated.
The case also pits intellectual property rights against the rising cost of health care and raises questions over how much a company should profit from a drug discovered by government scientists.
Moreover, the legal battle over Taxol is the latest example of the protracted delays that keep generic versions of important drugs off the market--and out of the hands of poorer patients.
For major pharmaceutical companies, extending their exclusive rights to sell these blockbuster drugs--even if it involves mere days or weeks--can mean millions in additional profits.
At today’s court hearing, U.S. District Judge William Matthew Byrne Jr. will review the claims of three companies, all with an interest in the drug. What Byrne decides will determine whether pharmaceutical giant Bristol-Myers Squibb Co. gains 30 additional months of unhindered sales of Taxol--worth at least $2 billion--or whether generic specialist Ivax Corp. will be able to sell a lower-priced version.
Government officials and industry observers maintain that because the financial stakes are so huge, the pharmaceutical companies have learned how to use cumbersome drug regulatory laws to delay approval of generic drugs for as long as possible. Such tactics cost consumers--including the government, employers and other insurance providers--billions of dollars in added health-care expenses.
“This is simply an industry that is out of control,” said Cindy Pearson, executive director of the National Women’s Health Network. “There doesn’t seem to be a company within it that is reasonable.”
Pressure on drug companies to maintain their exclusive rights is expected to increase as a number of blockbusters with combined annual sales of $34 billion--more than a quarter of the $120 billion raked in yearly by the drug industry--will lose patent protection in the next five years, said Leonard Yaffe of Banc of America Securities.
Barring legal maneuvers such as those affecting Taxol, the drugs expected to come off patent include big-name allergy drug Claritin, cholesterol fighter Zocor and blood pressure treatment Vasotec.
Even a seeming victory for consumers can become unhinged by regulatory delays. A U.S. Court of Appeals ruled last month that Prozac manufacturer Eli Lilly & Co. could not extend its patent by two years to 2003. But Lilly plans to come out with a pediatric version of the antidepressant soon, a move that would give the company a six-month extension because the government rewards manufacturers that develop drugs for children.
As the only Taxol manufacturer, Bristol-Myers makes about $3 million a day selling the breast cancer drug in the United States. But once a generic version comes on the market, the price of the drug--which costs $1,000 to $3,000 per course of treatment--would fall by about a third in the first six months and by half after that.
Although Taxol was discovered by government scientists, Bristol-Myers has had exclusive rights to develop and market the drug since 1992. But last month, smaller rival Ivax won tentative approval from the Food and Drug Administration for its generic equivalent of Taxol. If Ivax gets final clearance, it will get exclusive rights to market the drug for six months for having been the first to file a generic Taxol-related patent with the government.
But in recent weeks a third party has emerged waving its own Taxol-related patent, and it is the ensuing courtroom fight that’s threatening to delay the roll-out of a generic version by more than two years.
Looking to get a piece of the Taxol gold mine, tiny Santa Monica-based biotech firm American BioScience Inc. sued Bristol-Myers to force it to recognize its Taxol-related patent and list it with the government.
Bristol-Myers rapidly agreed to settle with American BioScience. But Ivax opposed the agreement and its arguments will be heard by Byrne today.
If the settlement is approved, Ivax will be forced to prove that its drug does not infringe American BioScience’s patent. And although most believe Ivax will ultimately prevail, the action would nonetheless trigger a 30-month FDA waiting period.
Ivax already sat through one 30-month waiting period, which ended this summer, while it successfully fought off a Bristol-Myers lawsuit challenging its right to make paclitaxel, the generic form of Taxol. But in the time it took Bristol-Myers to lose the lawsuit, the company reaped several billion dollars more in Taxol sales, which reached $1 billion annually in the United States last year.
Bristol-Myers would not comment on the American BioScience lawsuit or the proposed settlement.
But Miami-based Ivax contends that it is in Bristol-Myers’ interest to find ways to keep triggering waiting periods and delaying generic versions of Taxol from hitting the market.
Bristol-Myers defends its action in the handling and pricing of Taxol. The New York-based drug behemoth said it has invested about $1 billion in the drug, including funding for 600 clinical trials.
“We spent that money to get the drug off of the laboratory shelves and into hospitals and we have continued to develop Taxol to treat more types of tumors and cancer,” said Pat Donohue, a corporate spokesman.
Health-care advocates, however, believe Bristol-Myers has had a fair period of exclusive rights to Taxol and now should stand aside to allow competition--and lower prices.
“This is beyond a matter of profit,” said Larry Sasich, a pharmacist with Public Citizen’s Health Research Group in Washington. “This is an issue of pure, blatant greed.”
Sasich called the Taxol case an example of how drug companies “scratch at every means possible to get extended exclusivity for their product.”
Such tactics are why there is growing interest in revising the 1984 law that regulates generic competition of pharmaceuticals. Rep. Henry A. Waxman (D-Los Angeles), coauthor of the legislation, said drug companies have figured out how to use the law “to hamper and delay generic approvals.” But he doubts any change in the law is possible before the November election.
Waxman noted that Schering-Plough, maker of the blockbuster anti-allergy drug Claritin, has tried unsuccessfully to attach patent extensions to appropriations bills and even agricultural legislation.
Waxman said that among other “anti-competitive” tactics are agreements under which brand-name drug makers essentially pay generic companies to stay out of the market. Two years ago, according to Waxman, Ivax agreed to defer marketing a generic version of Abbott Laboratories’ hypertension drug Hytrin for two years in return for quarterly payments of $6 million.
The Taxol case, however, “is particularly egregious because much of the research to develop this drug was done by the National Cancer Institute at taxpayer expense,” Sasich said.
Back in 1958, the federal government started a program to test plants for anti-cancer properties.
Five years into the program, government botanist Kurt Blum came across the bark of the Pacific yew tree in a Washington forest.
Bristol-Myers reached a so-called commercial research and development agreement with the government to take over development of Taxol in 1989 and won FDA approval in December 1992.
The drug took off, becoming an incremental but important advance in treating ovarian and breast cancer.
“It wasn’t a cure, but it did move the needle on how long people can survive with ovarian cancer,” said Dr. Ted Trimble, an oncologist with the National Cancer Institute.
Trimble said Taxol, named after the yew’s Latin name, Taxus brevifolia, has shown promise in treating breast and lung cancer and Kaposi’s sarcoma, a cancer that often afflicts AIDS patients.
American BioScience filed its first patent application for Taxol in 1993, said Joseph F. Coyne Jr., the company’s attorney. It languished until this summer, when it was approved by the U.S. Patent Office.
American BioScience went to court Aug. 11 and won a preliminary order forcing Bristol-Myers to list its patent, which Coyne said covers improvements in how Taxol is administered. Ivax officials and others in the industry believe American BioScience’s claims might not survive a court test, though.
But if American BioScience succeeds in court, it might be able to force the larger companies to pay it a license fee or royalties, or it could decide to make the drug itself.
“Our company has a right to be rewarded for its innovation,” Coyne said. “The way you motivate people to do research is with profits.”
If that means the price of the drug remains at its current level for a while, that’s the way intellectual property law works, he said.
“I don’t think there are any cancer patients not getting Taxol because it is a third higher than it would be otherwise,” Coyne said.
That’s not always the case, according to health professionals.
But the cancer ward at D.C. General Hospital in Washington avoided using Taxol as a first treatment for ovarian cancer as recently as 1998 because of cost issues, said oncologist Dr. Margaret Akpan.
