Drug Makers Delay Generics Hitting Market

Wendell Young, president of the United Food and Commerical Workers Union 1776, says his members should not be denied access generic drugs Wednesday, May 24, 2006 in the Union headquarters in Plymouth Meeting, Pa. The marketers of the world's second-largest selling drug appeared to dodge a major threat to their revenues two months ago by reaching a deal to keep a generic competitor at bay until at least 2011. (AP Photo/Rusty Kennedy) (Rusty Kennedy - AP)

NEW YORK -- The marketers of the world's second-largest selling drug dodged a major threat to their revenues two months ago by reaching a deal to keep a generic competitor at bay until at least 2011.

Now, 10 lawsuits have been filed over the settlement Sanofi-Aventis SA and Bristol-Myers Squibb Co reached with Apotex Inc., a generic manufacturer challenging blood thinner Plavix's patent. The suits, filed by businesses, unions and health plans, allege the deal violates antitrust laws by denying access to cheap, generic versions of Plavix.

"We want to have a high level of (health) benefits for our members but to do that we need access to cheap, generic drugs," said Wendell W. Young IV, president of United Food and Commercial Workers Union Local 1776.

Experts say drug makers are delaying the introduction of cheaper rivals with deals like the Plavix settlement, in which Apotex agreed to drop its patent challenge and launch its product at a time approved by the patent holders in exchange for a payment of at least $40 million.

Other tactics include filing petitions with the U.S. Food and Drug Administration that express concern about a generic version of one of their products, and arranging to manufacture an "authorized" generic to cut into the challenger's profits.

Evidence suggests such activities are becoming more common and regulators _ fearing consumers' access to cheaper medications is being stalled by legal loopholes _ are examining the issue.

The FDA is exploring ways to tell if some petitions are delay tactics. Meanwhile, the Federal Trade Commission announced in March it would study whether brand name manufacturers are muting competition by authorizing generic versions of their own drugs that coincide with the launch of a rival generic.

Generic drugs can be up to 60 percent cheaper than their brand name counterparts and a powerful weapon in the struggle against exploding health care costs. Drugs with combined sales of more than $48 billion will lose patent protection between 2006 and 2010, according to Medco Health Solutions Inc., a pharmacy benefit management company.

"Brand companies face a product drought so they are going after every possible tool to delay generic competition" said Kathleen Jaeger, president and CEO of the Generic Pharmaceutical Association, the industry trade group. "Any tool they use to delay approval of our products and delay consumers access to our (cheaper) products is problematic."

Still, some of these arrangements wouldn't be possible without cooperation from generic companies.

"The generic companies are complicit," said Alex Sugerman-Brozan, director of the Prescription Access Litigation Project, a nonprofit that sues drug companies for practices it alleges inflate drug prices and exaggerate benefits. But he said generic companies may feel forced into such arrangements because they offer a guaranteed financial benefit and they can't withstand the economic pressure from big drug companies.

Spokesmen for Bristol-Myers and Sanofi-Aventis declined comment on the lawsuits. Apotex didn't return a call.