Tuesday, November 23, 2004
As reported in today's Wall Street Journal (subscription required), later this month Pfizer Inc. will face its first courtroom patent challenge against Lipitor, the cholesterol pill that is the biggest-selling drug in the world. Ranbaxy Laboratories Ltd., an Indian generic-drug company seeking to expand in the U.S. market, is trying to crack two patents that Pfizer says protect Lipitor through 2009 and 2011. If Ranbaxy shows that the patent protection shouldn't apply or that its copy of Lipitor doesn't infringe on Pfizer's patents, then it would be allowed to market a cheaper copycat version.
The battle over the Lipitor patents is emblematic of a much larger pattern:
After years of strong profits, generic-drug companies have hit a rough patch this year. Big buyers like wholesalers and national drugstore chains are driving harder bargains. And big pharmaceutical giants have found ways to put pressure on generics with their own generic products.
In the next five years, however, branded drugs with annual sales of $72.9 billion are expected to lose patent protection, according to analyst Gregory Gilbert of Merrill Lynch. Mounting concerns about prescription-drug costs will also fuel use of generics.
Industry critic Marcia Angell has assailed the use of patents by pharmaceutical companies to reap profits that far outstrip any reasonable return on their investment in drugs. An early version of her critique appeared as an editorial in the New England Journal of Medicine ("The Pharmaceutical Industry — To Whom is It Accountable?", NEJM. 2000;342:1902-1904 - requires subscription; letters to the editor are here). She expanded her critique in this year's The Truth About the Drug Companies: How They Deceive Us and What To Do About It; an abridged version appeared this summer as "The Truth About the Drug Companies," New York Review of Books, July 15, 2004.
The industry trade association, PhRMA, hasn't taken all of this lying down. In anticipation of the publication of Angell's book, it issued a 28-page refutation of her points.