Drug Makers Can Sell Own Generics
Pfizer Inc. and other drug companies have the right to sell unbranded versions of their own drugs even if they undercut sales of generic competitors, a U.S. appeals court has ruled.
Teva Pharmaceutical Industries Ltd., the world’s biggest generic-drug maker, sued in August to stop Pfizer from selling a lower-cost version of the epilepsy drug Neurontin. The U.S. Court of Appeals for the District of Columbia Circuit, in a ruling Friday, said the law didn’t prohibit such “authorized generics.”
“It’s yet another loss for the generics industry,” said David Maris, an analyst at Banc of America Securities in New York.
The size of the potential generics market is illustrated by a study released Monday by researchers at Brigham and Women’s Hospital in Boston. Americans would spend $8.8 billion less on drugs annually if brand-name medicine prescriptions were switched to cheaper generic alternatives whenever possible, the study found.
Total drug expenditures, which were as high as $141 billion in 2001, could be reduced by as much as 11% each year, according to the study.
The Federal Trade Commission, at the urging of three U.S. senators, is looking into whether authorized generics are anti-competitive. Under federal law, the first generic-drug maker to challenge patents on a drug wins six months of exclusive marketing rights. Teva argued that Pfizer, the world’s largest drug company, sought to thwart competition by undermining that incentive.
“It does not follow, however, from the Congress having intended to create an incentive to challenge brand-drug patents -- as it clearly did -- that the incentive it created is without limitation,” the court wrote.
Executives with Israel-based Teva didn’t comment. U.S. sales of Neurontin plunged to $56 million in the first quarter from $570 million a year earlier.
The decision “affirms our right to sell Pfizer medicines in generic-drug markets,” said Paul Fitzhenry, a spokesman for New York-based Pfizer. “We see the ruling as good news for consumers in terms of both quality and cost.”
Teva, in its lawsuit, urged the Food and Drug Administration to curb introduction of cheaper “authorized generics” that are the same as brand-name drugs. The FDA said it had no authority to block the unbranded versions because the makers already had approval to sell them.
