Patent Baristas

Blue Cross/Blue Shield and other insurers have sued GlaxoSmithKline in a dispute over the generics market of Paxil. The insurers are alleging that Glaxo has been gaming the patent system to keep cheaper generic alternatives to the antidepressant off the market. Glaxo lost its patent on Paxil in 2003. They accuse Glaxo of violating federal and state antitrust laws and fraud laws and engaging in deceptive trade practices.

The lawsuit alleges that the drug company claimed to hold patents on scientific procedures that already were in the public domain and listed invalid patents with the U.S. Food and Drug Administration that kept other pharmaceutical manufacturers from making generic equivalents.

Since sales on a blockbuster drug can plunge 80 percent or more the first year after a generic competitor hits the market, drugmakers have an incentive to fend off generics for as long as possible. In addition, brand-name drugs can cost three times their generic equivalents, according to the Generic Pharmaceutical Association, even though the FDA insists there is no therapeutic difference between generics and name brands.

Drug companies have tried to release new “improved” versions, also newly patented, as patents on their original drugs expire. For example, when Glaxo lost its patent on Paxil, they came out with a new version that patients take just once a day, rather than twice. Paxil CR, a once-a-day “controlled release” drug that had $824 million in U.S. sales last year.

Another tactic is to release an over-the-counter drug when patents expire to hold on to market share as in the case of Schering-Plough, which release an OTC of Claritin, its blockbuster antihistamine, thus killing a lot of its generics market.

This doesn’t always work, of course, as in the case of Merck & Co., who tried to get approval for an over-the-counter version of Mevacor, a cholesterol-lowering drug, but the FDA turned it down.

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