Healthy Skepticism Library item: 2207

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Agovino T.
Bristol-Myers Aims to Secure Monopoly
AP Business Writer 2001 Nov 12

Full text:

NEW YORK (AP) — In an industry known for going to extremes to secure exclusive rights, Bristol-Myers Squibb Co. manages to stand out with inventive tactics and exhaustive efforts.

The company that once attempted to block generic competition by patenting a medicine bottle now has an army of lobbyists blanketing the capital to secure its monopoly on diabetes treatment Glucophage through 2004 by evoking its exclusive right to label the drug for pediatric use. The $1.73 billion drug is barely used by children, however.

It is believed to be the first time a drug company has used this approach to retain its monopoly and it is an unusual choice: Glucophage is for adult-onset diabetes — less than one 1 percent of prescriptions are written for children.

Glucophage’s market exclusivity ended in 2000 and 14 generic companies are awaiting approval.

Now, Bristol-Myers lobbyists are trying to massage pending legislation to extend the company’s monopoly on its second-biggest selling product.

The Senate’s version of the bill intended to improve pharmaceutical safety for children favors the generic industry, and the House is expected to pass a similar version this week.

But no one discounts Bristol-Myers lobbying prowess. It retains 57 lobbyists, second only to Pfizer Inc, according to Public Citizen, the consumer group. And now the stakes are especially high.

Bristol-Myers has already had two drugs — anxiety drug BuSpar and cancer treatment Taxol — cannibalized by generic competition this year and its near term pipeline is deemed solid but not stellar by analysts.

In both cases, the decisions to allow generic competition were overturned in court, though it remains unclear when or if Bristol-Myers can recoup lost revenue or prevent further erosion.

Generic firms fear the recent court rulings threaten their ability to challenge the validity of branded companies’ patents — a key part of their strategy to get drugs on the market quicker. With those defeats, the last thing the generic firms want is for Bristol to set a precedent for a new way to stall generic competition. The current method of choice for extending exclusivity is adding new patents.

``There is a full court press on Glucophage,’‘ said Jake Hansen, vice president of government affairs at Barr Laboratories, which has a generic version of Glucophage. ``Those court cases were significant setbacks. We have to close the loophole on Glucophage otherwise the other companies will take advantage.’‘

Congress is currently negotiating the extension of legislation which gives brand name drug companies an additional six months of market exclusivity if they conduct tests to determine a product is suitable for children. The legislation passed by the Senate reaffirmed the six month extension. However, it also allows labels on generic medicines to be sold if they exclude pediatric data even if the brand name company still retains patent protection on that information.

The language in the legislation follows FDA policy for handling labels on generics which allows information on new indications to be omitted. When a drug is approved for a new use, the company receives an additional three years of market exclusivity, but only for that indication.

Bristol-Myers is pushing for a strict interpretation of FDA regulation, which requires that labels contain notes on pediatric use and that generic drugs have labels that are the same as the original product.

Bristol-Myers conducted pediatric tests on Glucophage, giving it the automatic additional six months of market exclusivity. Because the tests showed a benefit to children, the company then received the exclusive right to a pediatric label until June 2004.

At the very least Bristol-Myers seeks to exempt Glucophage from the law.

``Government should rule prospectively not retrospectively,’‘ said Bristol-Myers spokesman Patrick Donohue.

A defeat would mean billions of dollars lost in sales for Bristol-Myers.

Glucophage sales will fall anywhere from 50 percent to 80 percent if it loses exclusivity, analysts said. Bristol-Myers has introduced two variations of Glucophage, but company executives have conceded switching consumers to the new products is going slower than anticipated.

Bristol-Myers sales already have been hard hit this year through the loss of important monopolies. For the third quarter ended Sept. 30, 2001, BuSpar revenues swooned 84 percent to $28 million while Taxol sales fell 33 percent to $279 million.

Over the past few months Bristol-Myers has taken bold steps to bolster its core business. It sold its hair care business, purchased DuPont’s pharmaceutical division and bought 20 percent of ImClone Systems, a biotech firm with promising cancer drugs.

Still, analysts are concerned because Bristol-Myers hasn’t offered any guidance on next year’s financial performance. Moreover, no data has been released on Vanlev, a hypertension drug, for which the company plans refile for FDA approval by the end of the year. An earlier application for Vanlev was withdrawn because of side effects.

``The pipeline certainly has quantity but we don’t know yet about the quality or the earnings power,’‘ said Trevor Polischuk, an analyst at Lehman Brothers. ``If they lose the Glucophage patent there will be near term revenue pressure. The stock will be rewarded if Bristol wards off generic Glucophage.’‘

Shares of Bristol-Myers fell 36 cents Monday to close at $54.49 on the New York Stock Exchange, well off their 52-week high of $71. 21.