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Monday, February 13, 2006 - Page updated at 12:00 AM

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Hurdles block generic drugs

Seattle Times business reporter

In the generic target


Generic competition is on the way as soon as this year for several blockbuster drugs. Here are some facing competition soon.

Zocor

Manufacturer: Merck

Use: high cholesterol

2003 U.S. sales: $3.3 billion.

Pravachol

Manufacturer: Bristol-Myers Squibb

Use: high cholesterol

2003 U.S. sales: $1.7 billion.

Allegra

Manufacturer: Sanofi-Aventis

Use: allergies

2003 U.S. sales: $1.9 billion.

Zoloft

Manufacturer: Pfizer

Use: depression

2003 U.S. sales: $2.5 billion.

Ambien

Manufacturer: Sanofi-Aventis

Use: insomnia

2003 U.S. sales: $1.5 billion.

Source: Medco Drug Trend Report 2005

Generic drugs save Americans billions of dollars a year.

They compete with patented, brand-name counterparts, often driving down prices dramatically within weeks of coming on the market.

And as copies of drugs with established records for safety and effectiveness, they cost less to develop — an attractive business proposition.

But new competitors are not always welcomed, as Nastech Pharmaceutical has learned in its effort to launch a generic. Undisclosed parties can put up procedural roadblocks to keep generics stuck in regulatory limbo for months on end.

The result: Nastech is denied potential revenue, and patients continue paying full fare for an unchallenged brand drug.

"I think it's unfortunate for patients in America who could have the opportunity of getting a safe and effective drug at a reasonable price but are being held up by these kinds of processes," said Dr. Steven Quay, chairman and chief executive of the Bothell company.

Nastech began work in 2001 on its generic version of Miacalcin, a nasal-spray osteoporosis treatment prescribed more than 3.3 million times in 2004 with sales of about $300 million.

Generic-drug companies copy the active ingredients of patented medicines, bringing them on the market when patents expire or challenging weak patents in court.

Nastech, which focuses on developing new and reformulated nasal drugs, took a different approach with calcitonin-salmon, Miacalcin's generic name. The company created a drug that does not infringe on the Miacalcin patent — owned by European drug-giant Novartis and valid until 2015 — but is similar enough to be considered a generic.

To gain approval, companies must show that a generic drug has the same strength, dosage, usage and is otherwise equivalent to the brand name. In many cases, human clinical studies are not required, while new drugs must undergo three or more human studies for approval — a process that takes seven years, on average, and can cost several hundred million dollars.

Fast work

Nastech amassed the data needed to apply for approval in less than three years. The company looks for products with "reduced costs, risks and time to market" in addition to patient benefits and competitive advantages, Quay told investors recently.

It submitted an application to the Food and Drug Administration at the end of 2003 and expected a response by last December, based on the agency's average approval time for generics.

Nastech's application appeared on track until this fall.

A law firm representing a client it would not name filed an eleventh-hour "citizen petition" asking the FDA not to approve a generic Miacalcin without additional laboratory and human-study data on the generic drug's safety and comparability to the brand-name product.

"I am interested in making sure that companies submit necessary data to demonstrate that the products are interchangeable," said David Rosen, attorney with Foley & Lardner who filed the petition. "I want to make sure that the public is adequately protected."

Nastech fired back, calling the petition "meritless."

It "is clearly an effort to delay approval" of a generic product "in order to prevent competition in the marketplace," Dr. Gordon Brandt, Nastech's head of clinical research and medical affairs, wrote in October.

This duel between Nastech and its unnamed foe is a glimpse of the bureaucratic and legal chess matches typical of the drug industry.

In 2005, about 150 citizen petitions were filed with the FDA for everything from milk-labeling requirements to the purchase of nitrous-oxide gas. Generic-drug applications were the subject of at least 43, according to the agency's Web site.

The FDA is not obligated to resolve a citizen petition before acting on a generic-drug application, but that has been its practice.

FDA Chief Counsel Sheldon Bradshaw told a generics-industry meeting in September that the citizen-petition process can provide valuable information, but its apparent misuse is "particularly troublesome."

On the job five months at the time, Bradshaw said he'd already seen "several examples" of citizen petitions that appeared designed to delay approval. They compel the agency to consider arguments regardless of merit or whether "the petitioner could have made those very arguments months and months before," he said.

Dr. Scott Gottlieb, the FDA's deputy commissioner for medical and scientific affairs, said the agency has discussed improvements to the citizen petitions but has found no easy answers. It's difficult to discern petitions without an actual review, he said.

"Sometimes these petitions do have good scientific arguments in them ... and there have been cases where the citizen petition has changed our mind or informed the decision we made," Gottlieb said.

Filings pick up

The Generic Pharmaceutical Association says its members are seeing a resurgence of citizen-petition filings after recent legislation that limited other tactics used to keep their products off the market.

The brand-pharmaceutical industry takes issue with assertions that citizen petitions are used as delaying tactics. They are an avenue for innovators, as brand companies refer to themselves, to raise important safety, health and legal concerns about imitators.

This long-running debate continues at a time of tremendous opportunity for generic drugs.

Blockbuster brand drugs with combined sales of about $50 billion will face competition as their patents expire in the next five years, according to a recent report by Express Scripts, a leading pharmacy-benefits manager.

Competition has resulted in savings of perhaps hundreds of billions of dollars in health-care costs since the 1984 Hatch-Waxman Act made possible the generic-drug industry, while extending patent protection for branded products.

Today, more than half of U.S. prescriptions are filled with generic drugs, but Express Scripts estimated U.S. consumers could have saved $20 billion in 2004 by using more generics.

"It's a significant amount of money if you consider that total drug cost is on the order of $200 billion per year," said Raulo Frear, the company's chief clinical pharmacist.

Potential income

The calcitonin market Nastech is eyeing is only a tiny sliver of that, but it could generate substantial income for the company — even after the market is divvied up and revenues are split with its partner, Par Pharmaceutical.

While Nastech hasn't issued official estimates, CEO Quay said calcitonin revenues could offset its $32 million to $40 million in annual expenses, helping pay for the company's other drug-development programs.

Nastech has partnered with Merck on a potential obesity treatment, and earlier this month announced a deal potentially worth $577 million or more with Procter & Gamble for another osteoporosis drug.

Nastech isn't commenting on who might be behind the citizen petition.

Novartis, the pharmaceutical company whose sales would almost certainly be hurt by approval of generic Miacalcin, told the FDA it had nothing to do with the petition and doesn't know who does.

There's another recent entrant in the osteoporosis market. Unigene, a Fairfield, N.J.-based biotech company focused on some of the same markets and technologies as Nastech, got approval for Fortical, its own branded nasal spray, in August.

Fortical faced a citizen petition filed in January 2004 and dismissed more than a year and a half later, days before the FDA approved the drug.

"We never speculate about who's filing citizen petitions against us, nor do we talk about activities that we or anybody we know participate in," said Unigene Chief Executive Warren Levy.

He thinks the petition slowed FDA action on the drug, costing Unigene perhaps $700,000 in royalties for each week the drug was kept off the market, based on earnings since sales of Fortical began.

But, he added, "there's no way to know for certain" whether the FDA would have approved the drug faster absent the petition.

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com

Copyright © 2006 The Seattle Times Company

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