Automation & Control / QRM Process

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.

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.

As a result of this ruling and others, evergreening has become more difficult. “Legislators on both sides of the Atlantic have tightened up the rules in response to perceived abuses,” comments Linda Horton, a partner with Hogan & Hartson (Brussels). For example, FDA has permitted only a limited number of 30-month extensions obtained by challenging ANDAs. Plus, as Horton points out, last year’s Medicare legislation made it more difficult to claim continued exclusivity and keep generics off market. The E.U. has passed similar legislation.

“Companies that develop a new dosage form or delivery system, or a new salt or ester, fall under the E.U.’s ‘Global Marketing Authorization,’ which provides 10 years of exclusivity, period,” notes Horton. “If a company has already used up its 10 years and comes up with improvements, that’s fine, but they will not enjoy protection from competition for those new products.”

As in the U.S., European regulators make exceptions for pediatric indications, new indications supported by substantial research, and research-supported OTC switches that provide convenience or other patient benefit.

Difficulties, but no dearth of possibilities

Chemical manipulation of drug structures provides the surest path to additional patent exclusivity. In PEGylation, which has been around since the late 1980s, the polymer polyethylene glycol (PEG) is attached to a protein. The technique, which can be used to improve bioavailability and other performance characteristics, has been around since the late 1980s. Now, it is catching on as a patentable life cycle management strategy. The two poster-children for PEGylation, Amgen’s Neulasta (G-CSF) and Roche’s PEGASYS (interferon), have been remarkable success stories.

Neulasta, which treats chemotherapy-induced white blood cell depletion, is injected just once per chemotherapy cycle as opposed to every couple of days for the non-PEGylated drug. Neulasta also offers decreased immunogenicity, so it is better tolerated. PEGASYS offers similar benefits. Both products use Advanced PEGylation technology licensed from Nektar Therapeutics (San Carlos, Calif.).

Macromolecules, which are generally difficult to administer, benefit the most from PEGylation. Candidate molecules include proteins, peptides, and possibly genes. The first PEGylated oligonucleotide, Macugen, was approved last December. Macugen is a PEGylated anti-VEGF aptamer drug developed by Eyetech Pharmaceuticals (New York, N.Y.) and Pfizer to treat wet AMD (age-related macular degeneration). Macugen is an example of a NME (new molecular entity) that was PEGylated early in the development process to extend circulating half-life.

Companies interested in exploring PEGylation for a finicky macromolecule can investigate this approach by purchasing reagents from Nektar. If the drug shows promise, sponsors may enter a licensing agreement to use PEGylation during manufacture, or have Nektar produce high-volume PEG reagents for the end product. Nektar also specializes in pulmonary drug delivery. Its main product in that category, in partnership with Pfizer, is Exubera inhaled insulin, which is in Phase III testing. Nektar has six approved PEGylation drugs, three medicines in Phase III, five in Phase II, and 10 in Phase I.

“As companies look to stimulate growth in a competitive market, life cycle management using PEGylation or other advanced drug delivery methods will become an even more important tool,” says Christian Pangratz, head of PEGylation marketing at Nektar. “PEGylation provides a way to protect a market franchise by developing a next-generation medicine that is not just different but substantially improved and patentable.”

Deliverance

Delivery-based options for life cycle extension have proliferated, to the benefit of drug marketers as well as patients. “There are many ways to skin this cat,” comments Dr. John Fara, CEO of Depomed (Menlo Park, Calif.), “but most people prefer a tablet to an injection or implant.”

Depomed offers an oral tablet technology that provides tissue-targeted controlled release delivery through proprietary Gastric Retention (GR) technology. GR encapsulates medicines in a polymeric matrix which, when swallowed, swells to the size of a nickel and remains in the stomach for up to six hours. While the tablet is in the stomach it delivers its payload to the upper small intestine, an adsorption site with high surface area and extensive active transport mechanisms.

GR-formulated medicines could potentially be administered in lower doses, cutting down on systemic side effects. Upper digestive tract delivery also reduces lower-GI side effects like diarrhea.

“GR enables companies to apply a proven technology to existing drugs and thereby enhance exclusivity,” says Fara. Development times for GR formulations can stretch to five years and costs vary, depending on the regulatory and clinical strategy.

Not every product works with GR, which handles molecular weights below about 400, eliminating most peptides and proteins. However, larger molecules might be helped by formulating them with carriers to assist their assimilation into active transport mechanisms.

Bristol Myers Squibb has licensed GR for metformin, a drug for type 2 diabetes. Depomed has also been working on GR-delivered ciprofloxacin (an antibiotic), furosemide (for heart failure), and gabapentin (a pain reliever).

With so many delivery technologies available for line extensions, and with drug approvals near historic lows, it’s a wonder drug firms are not beating down the doors of companies like Depomed. Fara believes the reason is that certain products simply lose their market appeal and are outsold into oblivion by newer medications and generics. Plus, there’s the economics. “Developers might not see a payback in investing 15 or 20 million dollars in a novel dosage form of a ‘tired’ drug when the original brand is still limping along and generics have entered the marketplace.”

Focus on innovation

Extending or creating new intellectual property requires thinking outside the “me too” box. “The focal point of patent extension should be innovation, particularly patent benefit,” says Kenneth Anderson, Vice President of commercial development at NexMed (Robbinsville, N.J.). “But innovation costs money, which is why companies must take advantage of revenues from established brands.”

NexMed, a drug delivery company, transforms mature drugs to more user-friendly formats with the goal of creating or extending patent life. The company has developed Alprox-TD alprostadil cream, an impotence treatment that improves the currently available alprostadil product, which requires urethral insertion. NexMed has licensed European rights for Alprox-TD to Schering AG. NexMed is also developing an alprostadil product for female sexual arousal disorder.

NexMed is looking for licensing partners for several other products in various stages of clinical and preclinical development. These include an antifungal nail lacquer, a cream for premature ejaculation, an anti-emetic patch, a cream for bed sores, and a patch for arthritis pain. The antifungal lacquer is a topically administered version of terbinifine, a systemic antifungal marketed by Novartis under the tradename, Lamisil.

Editor's Note: All graphs referenced in this article may be accessed by clicking the "Download Now" button below.


What's In a (Brand) Name?

With branded products losing half their revenue within two years of going off-patent, and 90% after five years, life cycle management is never too early.

“Drug firms have traditionally done a poor job of maximizing lifetime economic impact,” says Terri Hisey, vice president and national leader at Cap Gemini Life Sciences (Philadelphia). Failure to squeeze every dollar out of intellectual property results in lower revenues, less capital for reinvestment and lower relative R&D expenditures.

Brands that have not established themselves suffer a double whammy: As patents expire and medications go OTC, many products lose reimbursement status. “They literally fall off formularies,” says Hisey.

During the period of patent exclusivity -- preferably as clinical trials begin -- firms should do everything possible to accelerate product launch and reduce approval times. A life cycle management program needs to be patient- and benefit-centered, since these factors are critical for obtaining multiple indications and maximizing potential within each approved use.

“Companies are missing a huge opportunity by focusing exclusively on the business and legal aspects of patenting,” Hisey adds.

Consultant Russ Read of Hope Pharma Consulting (Winston-Salem, N.C.) offers the following suggestions for maximizing brand value:

  • Understand the brand’s science to exploit value-added indications or modifications to chemistry or delivery that add value.

  • Investigate licensing, co-marketing, and co-development partnerships before commercialization to maximize brand value. “By the time a product is on the market it’s already quite late in its life cycle,” says Read.

  • Create a larger market “pie” to compensate for loss of revenue after patent expiry. Read likes strategies that include sustained release, single-dosing, new dosage forms, and novel delivery vehicles.

  • If you can’t beat ‘em, join ‘em: When all else fails, find a manufacturing or co-marketing partner to create a “branded generic.”



Son of Hatch-Waxman

By 2006, 11 biopharmaceuticals with combined annual sales of $15 billion will come off patent; by 2015, the numbers will at least double. Off-patent biotherapeutics are nothing new. Insulin and human growth hormone have been available in generic form for years, and enjoy multi-billion dollar annual sales. So potential bio-generics manufacturers are lining up to get a piece of that $30 billion in sales for soon-to-be-off-patent biologics, right? That would be true but for one minor detail: the regulatory framework for biogenerics doesn’t even exist.

While any good organic chemistry lab can categorize a small-molecule drug in a few hours, it’s not so easy to do for biologics. These complex products, manufactured in microorganisms or cultured cells, turn out to be more than their simple linear chemical structural backbone. In addition to twists, turns, folds, and other higher-order geometric structures, biologicals also possess post-translational modifications (PMTs) — glycosylations, acetylations, and phosphorylations — that alter both chemistry and activity.

Demonstrating equivalence for biologicals is more than a simple chemistry exercise, which is why biomanufacturers are so fond of saying that “the product is the process.” Since sponsors are under no obligation to give away process secrets, developers of biogenerics must figure everything out on their own. As a result, nobody knows how to demonstrate bioequivalence for therapeutic proteins, how these products would be regulated, how much clinical testing FDA will ask for, and how long the process will take.

But the really bad news is that biogenerics have no legal leg to stand on because Hatch-Waxman specifically excluded them.

“Clearly, what we need is something like son of Hatch-Waxman,” comments Stephen Bent, an attorney and co-chair of the life sciences industry team of Foley & Lardner (Washington, D.C.).

Biologicals are among the highest-priced drugs. With the Medicare Prescription Drug Benefit coming online in 2006, it is in the interests of patients, generics makers and government to give biogenerics a firm legal standing. In this regard Europe, where many basic biotech patents expire first, may offer some guidance on equivalence issues.

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