[e-drug] BMS pays USD670m to settle evergreening disputes

[e-drug@usa.healthnet.org]

E-DRUG: BMS pays USD670m to settle evergreening disputes
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[An interesting article in the New York Times (copied as fair use) which
shows the risks of evergreening techniques to keep patents alive and
generics out after "normal" patent expiry.
BMS tried many tricks to avoid generic competition. For example, it tried
some years ago to stop a Dutch generic company to register a generic
paclitaxel in South Africa. After the South African DRA ignored BMS
opposition, and registered the generic drug, BMS just bought the Dutch
company to avoid the marketing of the drug! WB]

http://www.nytimes.com/2003/01/08/business/08DRUG.html

Bristol-Myers Squibb to Pay $670 Million to Settle Lawsuits
By MELODY PETERSEN

Bristol-Myers Squibb said yesterday that it had agreed to pay $670 million
to settle numerous lawsuits by states, consumers and competitors charging
it with using illegal tactics to keep lower-priced versions of its
medicines Taxol and BuSpar out of the market.

The drug company said final details of the settlement were still being
negotiated with the state attorneys general and other parties who filed
suit. The terms are subject to approval by the courts where the lawsuits
were filed.

The announcement, however, is an important step toward resolving the many
lawsuits filed against Bristol after it tried to stop companies from
selling lower-priced generic versions of BuSpar, an antianxiety medicine,
and Taxol, a cancer drug. Both drugs are now available as generic
medicines, but the lawsuits claim that patients were deprived of the
lower-priced medicines for many months because of Bristol's actions.

The New York attorney general, Eliot Spitzer, said that the high cost of
the settlement should send a message to the entire pharmaceutical industry
that actions like Bristol's would not be tolerated. New York was part of a
coalition of states whose attorneys general filed the lawsuits on behalf of
consumers and state Medicaid programs.

"We're going to continue to be very aggressive," Mr. Spitzer said.

Under the agreement, Bristol said it planned to pay $535 million to resolve
the BuSpar litigation and another $135 million to settle claims relating to
Taxol.

In a statement, Bristol said that it believed that the actions it had taken
to protect its rights to the two drugs were "entirely lawful." The company
said it agreed to settle to put the uncertainty and risk of litigation
behind it.

The settlement does not end investigations by the Federal Trade Commission
into whether Bristol took illegal steps to try to keep generic versions of
BuSpar and Taxol off the market. "We're continuing to have discussions with
the F.T.C.," said Robert F. Laverty, a spokesman for Bristol.

Mr. Spitzer said Bristol and the plaintiffs in the suits were negotiating
terms aimed at preventing Bristol from taking similar actions to delay
generic competitors in the future.

The lawsuits involving BuSpar and Taxol revolved around secondary patents
that Bristol filed with the Food and Drug Administration that worked to
delay the sale of the generics.

Just 12 hours before the patent on BuSpar was to expire in November 2000,
and as Mylan Laboratories was loading trucks with its generic version of
the drug, the United States Patent Office issued a new patent to Bristol,
which it immediately filed with the F.D.A. to stop the shipments.

The states and other parties argued that the second BuSpar patent, which
covered a chemical substance made in the body after a patient swallows the
drug, was not valid and that Bristol had used fraud to get the F.D.A. to
accept it.

Neither Mylan Laboratories nor another generic manufacturer was able to
sell buspirone, the generic name for BuSpar, until four months later. In
that time, Bristol earned tens of millions of dollars from the drug's
sales.

In the case of Taxol, the lawsuits contend that Bristol's illegal actions
denied patients and state governments access to a lower-priced version of
the cancer medicine from December 1997 to April 2001.

The lawsuits claim in part that Bristol illegally colluded with a smaller
drug company, American BioScience, to get another patent on the drug filed
at the F.D.A., which stalled the sale of the generic medicine.

Taxol was discovered by the taxpayer-financed National Cancer Institute.
The government gave Bristol the rights to continue with development and to
sell the drug.

Other drug companies have also filed for secondary patents on products and
tried to use loopholes in federal law to extend the time they have to sell
a product exclusively.

For example, in the late 1990's, Warner-Lambert filed additional patents
covering Neurontin, an epilepsy drug, which have succeeded in keeping
generic makers from selling the medicine even though its primary patent
expired in 2000. Pfizer, which now owns Warner-Lambert, says the patents
are valid.

The amount of money involved in such cases is often substantial.

Before generic companies began selling Taxol, Bristol was earning roughly
$3 million a day from the medicine. Prices for the first generic drug on
the market are often 30 percent below the price of the brand-name drug.
Prices fall even more as other manufacturers begin selling the generic.

Yesterday, Senators Charles E. Schumer, Democrat of New York, and John
McCain, Republican of Arizona, reintroduced legislation aimed at closing
loopholes in the law that the drug companies have used to keep lower-price
medicines off shelves. That legislation overwhelmingly passed the Senate
last year, but Republican leaders in the House of Representatives refused
to bring it up for a vote.



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