Beating Patent Death

Brand name drug manufacturers are using novel formulations and delivery methods and creative life-cycle strategies to thwart an emboldened generics industry.

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Beating patent death
is not easy, but this
article lays out some
useful strategies.

By Angelo De Palma, Ph.D., Contributing Editor

Like death and taxes, pharmaceutical patent expirations are inevitable. According to a report by Cap Gemini (Philadelphia), by 2007 the top ten drug firms will lose more than $40 billion in sales to patent expiry (Bar Graph 1; this and other graphs referenced in this article may be accessed by clicking the "Download Now" button at the end of the article). The report warned that as many as 19 blockbuster drugs could be vulnerable by 2008.

Looming in the background, ready to pounce on any weakness in a drug’s legal or patent status, are generics manufacturers. Generics are now a $40 billion annual industry and account for more than half of all prescriptions filled in the United States, according to the market research firm Cutting Edge Information (Durham, N.C.). Sales of generics are expected to hit $60 billion by 2007, the company says (Bar Graphs 2 and 3).

Like other inventors, pharmaceutical developers enjoy 20 years of patent exclusivity. Since the clock starts ticking soon after discovery, innovators rarely enjoy more than about a dozen years of protection.

A few exceptions are worth noting, but none are automatic. Orphan drug status provides an additional seven-year exclusivity even if the drug is off-patent. Companies may also apply for extensions in rare situations where regulatory delays were out of their control. Six-month pediatric extensions require additional clinical studies in return for a relatively brief period of additional exclusivity.

Sundry strategies

Strategies for extending patent protection are many and varied, including: improved formulations, novel delivery methods, controlled release, chiral switches, exchanging the counter-ion, replacing an esterified group, device-drug combination products (through implants, inhalers, prefilled syringes), and drug-drug or drug-biologic combinations. These vary in complexity and degree of additional patent protection (if any). Some trigger new drug applications (NDAs), some do not; combination strategies may be regulated by FDA’s Center for Devices and Radiological Health (CDRH) instead of its Center for Drug Evaluation and Research (CDER).

The three requirements for obtaining a new 20-year period of exclusivity are the same for original NCEs (new chemical entities) and add-ons: The invention must be new, it cannot be obvious to someone of ordinary skill, and it must be useful in some practical way.

“Evergreening” and add-on patenting involves significant work and preparation, notes Dr. Teresa Welch, a partner at the law firm Michael Best & Friedrich (Milwaukee). “But if successful, companies are rewarded with additional years of exclusivity and brand-level sales,” says Welch. However, such tactics are coming under increasing regulatory scrutiny.

Add-on patents often suffer from limited coverage or suspect validity, notes Jeffrey Ward, also a partner at Michael Best & Friedrich. Litigation over add-on patents form the bulk of legal actions brought under the 1984 Hatch-Waxman Act, which essentially created the generic pharmaceutical industry. Hatch-Waxman allowed generics companies, for the first time, to manufacture and test (although not sell) brand-name actives before the original patent expired.

Concerns of industry “gaming” the patent system through add-ons and related tactics have led to a flurry of rulings, most of them favorable to generics firms. For example, FDA has tightened rules for inclusion of patents in the Orange Book, which lists all approved drugs and pertinent patents. As part of their Abbreviated New Drug Application (ANDA), generics manufacturers must refer to the Orange Book and make specific certifications for each patent related to their target molecule.

Attack of the generics

Buoyed by early successes, generic drug manufacturers are waging legal war on big pharma patented products. Dr. Ybet Villacorta, a patent attorney with Katten Muchin Zavis Rosenman (Washington, D.C.), likens this interplay of science, law and public policy to a “cat and mouse game” fueled by spiraling healthcare costs and an uncertain future for small-molecule drug development.

“The generics industry is definitely getting bolder,” notes Jon Hess, senior analyst with Cutting Edge Information, as generics no longer wait for patent expiration to launch an attack on branded products. Many have employed a “Paragraph IV” certification, which attempts to convince the Patent Office that their knockoff does not infringe on existing intellectual property or that the original patent (or patents) was invalid or unenforceable. When a Paragraph IV certification is made, the patent holder receives a notification letter from the generic, which invariably triggers a lawsuit requesting a 30-month stay of the generic’s approval. “Paragraph IV certification is a tactic used primarily against sponsors that receive patents on trivial formulation changes,” says Welch.

Patent invalidation stakes are high for innovator companies and generics alike, but so are the potential windfalls. “There’s a one- to two-million dollar ante just to play this game,” says Villacorta.

At one time, patenting active metabolites was a viable means of extending patent life. Metabolites conveniently “discovered” years after the original patent was issued were a rich source of added exclusivity.

A 2003 Federal Circuit Court decision made defense of metabolite patents much more difficult, if not impossible. Schering-Plough had received a patent for a metabolite of its blockbuster Claritin antihistamine several years after patenting the active compound, loratadine. When Geneva Pharmaceutical tried to market generic loratadine, Schering sued since the metabolite, whose patent was still in effect, was inevitably produced in the bodies of patients taking loratadine. The court ruled against Schering, setting a precedent that has probably settled the metabolite situation once and for all.

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