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Vivian Rodriguez was skiing with her kids in Vail, Colo., last year when her world came crashing down. It wasn’t an avalanche. It was breast cancer. “I felt a lump and said ‘Whoops! This wasn’t here before,’ ” Rodriguez said. It wasn’t long before she had the lump removed and began a five-month-long regimen of chemotherapy and Taxol, a drug that can significantly boost a patient’s chances for survival. That boost, however, has come at a hefty price: Complete treatments range in cost from $10,000 to $20,000. With a generic version of the drug, the treatment cost would likely be 30 percent to 50 percent lower. “It’s a very, very, very important drug to us,” says Dr. Mark Lewis, an oncologist at Memorial Regional Hospital in Hollywood, Fla., who has 10 patients using Taxol. Having a generic on the market, he says, “will be a cost benefit to the hospital and the patient.” But because the financial stakes are so high, big drug companies have learned how to use complicated drug regulatory laws to delay approval of generic drugs for as long as possible. They can sometimes win patent extensions by finding new applications for an old drug. The issue is further complicated by intellectual property laws, which allow companies to file patents on everything from the chemicals that make up a drug to the means by which drugs are administered. Few cases exemplify the complexity of the process better than Miami-based Ivax Corp.’s fight to create a generic version of Taxol. Discovered more than 30 years ago in the bark of the Pacific yew tree, Taxol has been shown to aggressively attack a wide range of cancers. Today, oncologists consider its use standard for breast and ovarian cancers. The National Cancer Institute devoted millions of dollars and 30 years of research toward laying the groundwork that would lead to the drug’s development. Lacking the resources to manufacture and market the drug, the federal government signed an agreement in late 1992 giving Bristol-Myers the exclusive right to sell Taxol for five years. After that, other drug companies were to be free to start selling their own versions of the drug. But as one of those companies — Ivax — quickly learned, Bristol-Myers wasn’t about to give up its dominant position without a fight. $1 BILLION MONOPOLY Ivax was first out of the box with approval by the Food and Drug Administration for Onxol, its version of paclitaxel, the active ingredient in the cancer-fighting drug. By law, the first generic drug company to receive FDA approval to market a drug gets the exclusive right to its sale for six months. During that time, generic companies typically charge about one-third less than the price of the brand-name drug. After that, it’s a competitive free-for-all with the price dropping over time from 15 percent to as much as 50 percent, forcing the brand-name company to slash the price of its drug. Fearful of losing its monopoly on a drug that brings it more than $1 billion in annual sales, Bristol-Myers has spent the last three years battling Ivax at every turn, bringing patent suits against Ivax in several states in an effort to keep the company from launching its own product. Until late October, when Ivax started shipping Onxol, Bristol-Myers had nearly an eight-year monopoly on the life-extending drug. The legal battles are nothing new. Smaller generic drug companies often must battle big pharmaceutical makers seeking to block them from bringing their less-expensive, but equally effective, drugs to market. Twice, drug giant Schering-Plough was able to maintain its monopoly on Claritin, the world’s top-selling allergy drug, by getting bills passed in Congress that gave it patent extensions. And Hoechst Marion Roussel Inc. kept its monopoly on the popular heart drug Cardizem CD by paying Fort Lauderdale, Fla.-based Andrx Corp. not to bring its generic version to market. But the Ivax/Bristol-Myers fight is being called by those in the industry the “poster child” for the way the pharmaceutical industry is regulated, or some might charge, unregulated. “Unfortunately, it’s the kind of battle Ivax and other generic companies face all of the time,” said Jay Shapiro, of Stearns Weaver Miller Weissler Alhadeff & Sitterson in Miami, who has represented Ivax in its numerous court battles with Bristol-Myers. He argues that brand name companies are engaging in all kinds of schemes and strategies to extend exclusivity. “So you understand the stakes here, every day Bristol-Myers keeps generics off the market, they sell $4 million to $5 million of this product. That’s every day, Saturday and Sunday included,” Shapiro said. “To say they have a strong financial incentive to keep generics off the market is an understatement of the century.” A Miami patent attorney who is not involved in the Ivax brawl agreed. “My experience has been anybody with a monopoly seeks to use whatever legal methods it can and whatever legal resources it has at its disposal to properly maintain that monopoly,” said Jim Gale of Feldman Gale & Weber. “The question here is what is proper. My perception is that the courts are finding that Bristol-Myers’ actions are not proper,” said Gale. Bristol-Myers spokeswoman Nancy Goldfarb did not return repeated phone calls or respond to faxes requesting comment. DISCOVERING TAXOL The events leading to Taxol’s discovery date to the mid-1950s, when Congress pushed the National Cancer Institute to find a cure for the disease. It fueled the search with hundreds of millions of dollars in taxpayer money and sent investigators out in search of plants that might have anti-cancer properties. In 1962, one of those investigators gathered some bark from a yew tree and sent it off to researchers. But it wasn’t until 1967 that scientists actually were able to pinpoint the active ingredient that helps fight cancer and not until the early 1980s that Taxol would be ready for human testing. Unequipped to manufacture and sell the products it develops, the National Cancer Institute often seeks private companies to bring drugs to market. In the case of Taxol, four companies offered proposals. In 1990, the cancer institute gave Bristol-Myers a Cooperative Research And Development Agreement or CRADA, assigning it exclusive rights to commercialize Taxol. Bristol-Myers paid nothing for the agreement and was not required to pay the government any royalties it received on Taxol sales. Indeed, Bristol-Myers has been the institute’s “favorite partner,” according to Consumer Project on Technology, a group started by Ralph Nader. Among the 34 cancer-fighting drugs that have received NCI funding, 11 were at one time or another marketed exclusively by Bristol-Myers. “If you didn’t care about price, Bristol-Myers could credibly argue that they could do a good job because they were the dominant marketing company for cancer drugs in the world,” said James Love, director of the Consumer Project on Technology. CRADAs typically contain a reasonable pricing clause. In this case Bristol was able to negotiate the reasonable pricing clause out of the agreement “because of their sworn assurances that that they had no patent protection and no ability to exclude others,” said Shapiro. ‘A MAJOR MILESTONE’ Four days after Christmas in 1992, Bristol-Myers held a press conference to announce it had received FDA approval for the use of Taxol to treat cancer. The company’s then-senior vice president described it as “a major milestone in a 30-year quest.” It was during the same press conference that the company’s then-medical director, Dr. Isadore Pike, announced the terms of the deal. Taxol, he said, “has never been patented, and no patent is possible, so the only exclusivity or protection the company has is five years of protection from an abbreviated new drug application.” Bristol-Myers made the same claim a year earlier during a Congressional investigation into the propriety of exclusive agreements between the federal government and drug manufacturer. At issue was whether such deals would offer any protection to patients from price-gouging. “At the same time that Bristol-Myers was saying that no patent was possible and they had no patent protection, they were [filing their own] patent applications,” Shapiro said. Robert Lipper, vice president of biopharmaceutical research and development for Bristol-Myers, testified during a court hearing last month in Miami-Dade Circuit Court that at the time his company was referring to patents on the drug, and nothing else. In this case, Bristol-Myers contends Ivax has infringed, not on the patent for Taxol, but on the chemicals used in concert with the drug so that it can be administered through injection. “Paclitaxel is not patentable. But I don’t know how other legitimate research can not be patentable,” Lipper said. EXPIRING EXCLUSIVITY With its exclusivity about to expire in Dec. 1997, Bristol-Myers that same year obtained its patents and “promptly popped them into the Orange Book,” a listing of patents, said Shapiro. “Lo and behold, right when their exclusivity was about to expire, all of a sudden these patents started popping out of the patent office,” he said. “These were patents they told Congress weren’t possible to get.” Once a patent is listed in the Orange Book, the FDA typically is prohibited for 30 months from approving any generic drug that might interfere with that patent. The policy is designed to give competing parties time to fight it out in the courts. “What it amounts to is a free preliminary injunction,” said Shapiro, whose court battles over Taxol have meant flying from one end of the country, working 20-hour days, and even missing his daughter’s first birthday. Still, he says, it’s been worth it. “It’s an important case for this company, and for the public,” Shapiro said. In March, Bristol-Myer’s patent infringement claim was tossed out of court and in June the 30-month stay expired. Ivax was ready to start producing its own generic, and therefore cheaper, brand of Taxol through its subsidiary Zenith Goldline Pharmaceuticals, but it ran into another legal quagmire. In August another company, American BioScience Inc. of Santa Monica, Calif., entered the fray by claiming that it, too, held a patent � this one relating to the way the drug is administered. “They have a broad patent with a lot of claims, 98 percent of which is directed to a formulation of Taxol that neither Ivax nor Bristol-Myers infringes,” Shapiro said. American BioScience sued Bristol-Myers in California in an attempt to get a federal judge to order Bristol-Myers to recognize American BioScience’s patent and list it with the FDA. Listing the patent could have blocked Ivax from selling generic Taxol for another 30 months. Ivax moved to have the case dismissed, claiming that Bristol-Myers and American BioScience had conspired to bring the lawsuits as part of “a collusive effort intended to extend Bristol’s monopoly over Taxol.” The judge “bought into our argument that this is a sham lawsuit intended to protect Bristol-Myers,” said Eugene Stearns of Stearns Weaver Miller, who also represents Ivax. The two companies agreed to settle before the motion to dismiss was heard, with Bristol-Myers agreeing to list the patent. The court refused to adopt the settlement, dismissed the case, and ordered the patent to be de-listed. The deal has caused many, including the FTC, to question whether the two companies colluded against Ivax. American BioScience also sued the FDA in Washington, D.C., claiming it had no right to approve the sale of Ivax’s generic version. A district court judge in Washington, D.C., rejected the case. The company appealed and was denied again. “The whole thing with American BioScience is a tempest in a teapot,” says Alfred Engelberg, a retired patent attorney in New York who once represented the generic drug industry. “I think it’s just a game going on, the end purpose of which is to get the patent listed and delay the entry of generic competition.” Attorneys for American BioScience did not return phone calls seeking comment. $1,000 A DOSE, AND UP Until now, a standard dose of Taxol costs from $1,000 to $2,000, according to Dr. Michael Troner, a medical oncologist/hematologist at Baptist Hospital in Miami. An entire course of treatment can cost $10,000 to $20,000 depending on the type of cancer and the treatment protocol. Such monopoly-driven prices can be 2,000 times what it cost the company to produce the drug. “That fact that it is going to be a generic simply means to me that the price will go down and if the price will go down, that’s better for insurers and patients,” Troner said. While insurance companies will benefit financially from having patients on the less expensive version of a drug, they have remained solidly on the sidelines. “There are other players out there who ought to be more aggressively involved,” Stearns said. “The federal government, the FTC, private insurers, health care providers, I think they have been happy to sit around and say ‘Ivax has done a great job fighting the battle,’ but they need to join,” he said. But politics just won’t allow for it, insurers say. Mohit Ghose, a spokesman for the American Association of Health Plans, says his organization never voices opposition or support in such matters because “the pharmaceutical industry are colleague organizations and it’s important for them to do their own thing.” Locally, the Florida Association of Health Plans also has remained out of the fracas. “Have we been as aggressive as we could? Probably not. But we need to take the path cautiously,” said Robert Bernal, the organization’s vice president. The problem, according to Bernal, is that if managed-care companies join the battle, it may appear that they are only interested because generic drugs are cheaper and they will be accused, once more, of trying to keep costs down. “If we come out too aggressively it’s ‘There go the HMOs again, looking at the bottom line,’ ” he said. Meantime, Ivax’s bottom line has been hit to the tune of millions, company officials say. The Bristol-Myers litigation has not only cost Ivax millions in lawyers’ fees, but the company also has also lost more than $100 million in profits that it would have made by selling Onxol. The drug represents a significant product for the company, says Gregg Gilbert, an analyst with Merrill Lynch in New York. “Our estimates are $24 million for the fourth quarter and $136 million next year,” Gilbert said. “But the real issue after 2001 is how many generic competitors there will be for Taxol. If there are a few, they can continue to grow the product. If there are several, it won’t be much of a growth driver.” For Ivax, Onxol means more than profits. “Ivax has become a leader in not only selling generic products, but in getting generic products to market,” Stearns said. “As a consequence, the significance of this battle has not just been in winning, but in its willingness to be a leader in fighting the battle.”

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