Healthy Skepticism Library item: 2222

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Publication type: news

Bristol-Myers Squibb Effort to Extend Glucophage Patent Galvanizes Congress and Divides Drug Industry
Kaisernetwork.org 2001 Nov 21
http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=8166

Full text:

The Wall Street Journal today chronicles a “lobbying battle” by Bristol-Myers Squibb to extend the patent for its diabetes drug Glucophage by using a “legal loophole” that has “outraged” lawmakers, consumer groups and even “split” the pharmaceutical industry. The Journal reports that Bristol-Myers efforts to use the loophole are “complicating” efforts to pass a pediatric exclusivity bill that is widely supported by the industry (Harris/McGinley, Wall Street Journal, 11/21). That bill, the Best Pharmaceuticals for Children Act (S 838), sponsored by Sens. Christopher Dodd (D-Conn.) and Mike DeWine (R-Ohio), would grant drug companies that conduct clinical research on a drug’s effectiveness in children a six-month patent extension on that drug. The House Energy and Commerce Committee passed its chamber’s version of the bill. The Senate passed its version by voice vote on Oct. 18 (HR 2887) 41-6 on Oct. 11 (Kaiser Daily Health Policy Report, 11/21).

Bristol’s Basic Argument
To keep Glucophage — Bristol-Myers best-selling treatment — patent protected until 2004, the company is using a provision of a 1984 law that gives pharmaceutical companies three years of market exclusivity for any “new indication” added to a drug’s label. Because of this provision, the FDA in February approved a Bristol-Myers’ application for pediatric labeling, which gave the firm exclusive marketing rights for children until 2004. This protection applies solely to children and not for “all marketing” of the treatment. However, Bristol-Myers is arguing that a 1994 FDA rule requiring drug labels to include child safety information prohibits the FDA from approving generic forms of the drug without such information. Basically, Bristol-Myers is arguing that no generic version of Glucophage can be approved without child safety information under the 1994 rule and such information is patent protected until 2004 under the 1984 law. More than a dozen generic versions of the drug have been awaiting approval since May, and the FDA is “still considering” Bristol-Myers argument, the Journal reports.

‘Irate’ Congress Responds
This argument upset lawmakers, who “vowed to stop Bristol-Myers and close the loophole.” Other brand-name drug firms thought the move “mad[e] the entire industry look bad” and could prevent passage of the pediatric exclusivity bill they had lobbied in support of for more than a year. Republican leaders introduced an amended version of the bill closing the loophole that the House Energy and Commerce Committee passed on Oct. 11. Soon after, the Senate passed a similar version that closed the loophole. However, differences in the bill must be resolved in a conference committee. Rep. Henry Waxman (D-Calif) said, “The one thing Bristol-Myers did was solidify the Democrats and Republicans against them” (Wall Street Journal. He also said that the 1984 law was not intended to allow “piggybacking” of patent rights (Appleby, USA Today, 11/21).

Clandestine Campaigning
Once the House and Senate voted to close the loophole, the Journal reports Bristol-Myers put its lobbying efforts into “high gear” and met with lawmakers to “save the loophole.” First, Bristol-Myers lobbyists arranged an “unusual event” with House Energy and Commerce committee staffers and lobbyists from the generics industry so both sides could present their cases “in a kind of moot court.” However, after presentations from both sides, the staffers were “more convinced than ever” the loophole needed to be closed. Refusing to “quit,” Bristol-Myers proposed a compromise agreement to a group of liberal Democrats, who are typically “tough critics” of the industry. Because Democrats were eager to close the loophole, Bristol-Myers agreed to support a bill that would close all similar loopholes in exchange for an additional patent extension of six to nine months for Glucophage. Other drug industry lobbyists “got wind” of the offer and could not believe Bristol-Myers would support it, let alone draft the language. Democrats then pulled away from the deal over fears that the bill would not be able to close the loophole. Bristol-Myers moved to Republican legislators, who received “most” of the company’s $2.3 million campaign contributions in the 2000 election cycle, and said that closing the loophole for Glucophage is an “unconstitutional ‘taking’” of the company’s rights by the government. “If Congress wants to change the law going forward, that’s their right, but it would be unfair to take away that right retroactively,” John McGoldrick, Bristol-Myers executive vice president, said. “We played by the rules of the game fair and square, and we’re entitled to our right.”

Latest Developments
Bristol-Myers’ “lobbying is now focused” on the conference committee handling the pediatric exclusivity bill. The committee is scheduled to address the legislation after the Thanksgiving recess. The Journal reports that Bristol-Myers faces a “difficult chore” since the House and Senate versions of the bill are similar. However, some Republicans are still seeking a compromise that is acceptable to Bristol-Myers, generic drug firms and other brand-name companies. McGoldrick added, “We have confidence in the ultimate fairness and correctness of what Congress will do.” But Bristol-Myers is continuing to pursue other options to protect its patent. For example, the company is attempting to move patients to newer versions of the drugs, since pharmacists can not switch patients to generics automatically from the newer treatments (Wall Street Journal, 11/21). Public Citizen, a consumer advocacy group, is criticizing the company’s lobbying for a 3-year patent extension, saying than an extension would cost consumers $1.9 billion. Public Citizen’s Frank Clemente said, “If Bristol-Myers succeeds at this, consumers could be on the hook for tens of billions of dollars in extra costs as other brand-name drug companies will seek this same exemption” (USA Today, 11/21).