Patents and Prescription Drugs-Part I 

Because of the length of this article, we have created a Part II to it so that it becomes easier to find the latest news in this area as it develops. Thus for the latest news please see Patents and Prescription Drugs-Part II. We apologize to our viewers for any inconvenience that this may cause you.

Elliot Spitzer, the New York Attorney General, as lead plaintiff for 28 other states, announced the settlement for $80 million of the lawsuit against two drug companies for allegedly conspiring to keep a cheaper, generic version of Cardizem a blood-pressure medication off the market. The federal lawsuit had been filed against Aventis and Andrix seeking at least $100 million in restitution for the higher costs incurred as a result of this type agreement by state run medical programs such as Medicaid. Cardizem cost about $73 a month while Andrix's Cartia XT would have cost about $32 per month. Aventis had brought suit against Andrix in late 1995 for patent infringement. The case was settled when Aventis, the plaintiff paid $89 million to Andrix the defendant. Cardizem had $700 million in sales in the 11 months the generic drug was kept off the market.

Mr. Spitzer alleged that in 1998 the German company Hoechst, which was acquired by Aventis in 2000, paid Andrx just under $100 million not to market the generic version of Cardizem CD for 11 months. The agreement was to be renewed annually.This settlement is in addition to a $110 million settlement previously reached between Aventis and Andrx and drug wholesalers involving the same alleged misconduct.

The FTC has filed complaints in several civil actions alleging that some brand name drug companies paid the generic companies varying sums of money to keep the generic brand off the market for years at a time. In one of the complaints Aventis (the name of the merged company of Hoechst A.G. of Germany and Rhone-Poulenc S.A. of France) and Andrix Corp., a generic manufacturer agreed to keep the generic version of Cardizem CD off the market for several years. Cardizem CD is one of the top-selling heart drugs. The FTC challenged the agreement, and as a result of this challenge by the government both companies agreed not to negotiate any new deals that would delay the introduction of the generic version of Cardizem.  

The FTC settled a case against two generic drug companies that it had accused of using a licensing agreement to prevent competition and to keep prices high for a generic blood pressure medication. At issue was a 1999 agreement between Biovail Corp. and the Elan Corp to make two different dosages of nifedipine, the generic version of a heart drug, Adalat CC made by Bayer A.G. whose patent had expired. Adalat had been a $270 million selling prescription drug in its last year of its patent.

The FTC accused the two companies of preventing competition for the sale of the generic version of the drug by agreeing to have Elan license its rights to distribute nifedipine to Biovail, which in turn distributed both versions of the drug. Under the settlement Elan and Biovail must dissolve their licensing agreement immediately and are barred from participating in similar deals.

Thus in effect the FTC for the first time was dealing with the situation where two generic drug companies illegally agree among themselves to allow one of them to market both dosages of the generic version of the drug to the detriment of the consumer. The more normal case involves a generic and a brand name drug company conspiring to prolong the life of the brand name drug with the consumer suffering as a result of the agreement.

Several attempts are being made to try and resolve the impasse that has arisen in the World Trade Organization between the wealthier and poorer countries regarding the usage of patents in connection with life saving drugs. One example of this was shown when Pharmacia Corp. announced a deal to allow generic drug companies to produce versions of it patented AIDs drug Rescriptor in poor countries only.

Under the terms of the deal, Pharmacia would license Rescriptor to the nonprofit International Dispensary Association of the Netherlands. The association would in turn line up generic manufacturers to produce the medicine for use in only the poorer nations of the world. In an attempt to avoid fraud in connection with the drug's sale, the generic version of the drug, which is known as delavirdine, would be produced in a different shape and color from the patented version of the drug. This would prevent the illegal importation of the generic version of the drug back into the rest of the world.

Generic makers of the drug would pay royalties to the patent holder of about 5%. The generic drug companies would be forbidden to sell the generic version of the drug in the rest of the world. Rescriptor costs more than $300 a month in the U.S. Pharmacia has not promoted the usage of Rescriptor since 1999, when it licensed the drug for sale to Agouron Pharmaceuticals, now a division of Pfizer, Inc. Pfizer is the company that is expected to merge with Pharmacia when all needed governmental approval is finally granted.

Judge Henry H. Kennedy Jr., of the federal district court in Washington has struck down as illegal the rules set by the FDA that required the drug companies to test their products on children. The Clinton administration first proposed the rules in 1997, and issued them in 1998.

The government announced plans to begin clinical tests this year on 12 drugs commonly prescribed for children becasause their safety and efficacy has been tested only on adults. The National Institute of Child Health and Human Development developed the list of drugs to be tested in consultation with the FDA and experts in pediatric research.

Congress passed legislation last year giving drug companies financial incentives for conducting the tests. It also set up grants to finance pediatric studies. The NIH, which set aside $25 million from its budget, will oversee the tests, and the FDA, which set aside $6.6 million from its budget, will review the test results. Interestingly enough all 12 of the drugs are no longer under patent.

The Bush administration announced that it would not appeal Judge Kennedy's decision, but instead it would throw its weight behind a congressional effort to pass a law that would require the drug companies to test their drugs on children. Health and Human Services Secretary Tommy Thompson said "the fastest and most decisive route for establishing clear authority" is through legislation. The FDA and children's health advocates had stated that the rule is critically important in developing the needed information for proper dosage for children who are taking any particular drug.

Actually the drug industry had learned to live with the rules and it was third parties who led the legal challenge to the rules. The FDA has not announced, as of this date whether or not it would appeal the decision. The American Academy of Pediatrics and the Elizabeth Glaser Pediatric AIDS Foundation are appealing the decision.

The Bush administration had originally said that it planned to suspend the rules but reversed itself because of the loud outcry from pediatricians and members of Congress. Keep in mind that these rules are not the same as the law that allows a drug company to have an automatic 6-month extension on the life of a patented drug if the pharmaceutical company voluntarily conducts the study of the drug's effect on children under 14.

The F.D.A. Modernization Act of 1997 and the Best Pharmaceuticals for Children Act of 2002 covers the study of the effect of prescription drugs on children. The FDA had issued rules that would have required a drug company to study the effects of the drug on children, even when the drug company did not label or market the drug for use by children. Judge Kennedy felt that the FDA was therefore exceeding its authority in requiring the drug company to conduct studies that were of no benefit to the company.

Senator Hillary Clinton (D-NY) stated that the court's rejection of the FDA rules "underscores the need for immediate Congressional action" to impose similar requirements on the drug companies. Senator Susan Collins (R-Me) will co-sponsor the legislation. Sometimes children take the same medications as do adults and their doctors therefore have to guess at the correct dosage for the child. 

Bristol-Myers Squibb Co. announced that it had agreed to pay $670 million to settle numerous lawsuits, by various states, consumer groups and generic drug companies to keep generic versions of BuSpar and Taxol out of the market for extended periods of time. The final terms of the settlement are subject to approval by the courts where the lawsuits were filed.

The settlement does not end the investigation by the FTC into whether Bristol took illegal steps to try to keep generic versions of BuSpar and Taxol off the market. "We're continuing to have discussions with the FTC," said Robert F. Laverty, a spokesman for Bristol. Elliot Spitzer, the New York attorney general said Bristol and the plaintiffs in the suit were negotiating terms aimed at preventing similar actions by the defendant in the future to delay introduction of generic drugs. Mylan Labs Inc. said it signed a final agreement with Bristol-Myers Squibb Co. resolving all disputes between the companies related to Buspirone. Mylan said that it received $35 million and nonexclusive, irrevocable licenses under any applicable Bristol-Myers patents to make and sell the drug domestically. This will bring to an end the dispute between Mylan and Bristol,but does not put to an end the suit brought by 29 states' attorney generals for the alleged illegal conduct by Bristol that we discuss later in this article.

Bristol-Myers Squibb Co. and Watson Pharmaceuticals Inc. previously announced a settlement in connection with the patent dispute over Bristol's anti-depressant drug BuSpar. Bristol will pay Watson $32 million and Watson will also receive a nonexclusive license to sell the generic version of the drug under Bristol's patent. Thus Watson will no longer be a plaintiff in the anti-trust action brought against Bristol for its actions in trying to extend the life of its patent for the drug. In making the settlement with Watson, Bristol had the benefit of the additional revenue and profits for several months from BuSpar which far outweighed the $32 million cost of the settlement.

The case is still pending before Judge John G. Koeltl of the U.S. Southern District Court in Manhattan since Mylan Labs and a host of consumer groups and states' attorneys-general are still going ahead with their case. Judge Koeltl had previously ruled that the anti-trust suits brought against Bristol-Myers Squibb Co. in connection with patent may proceed. Judge Koeltl decision to proceed with the case was made in connection with Bristol's motion for dismissal of all the suits.

The court had also ruled that Mylan and Watson did not infringe on Bristol's patent for BuSpar, in which Bristol used the metobolite defense to try and extend the life of its patent. The FDA is now free to proceed with the approval of 8 more applications from generic drug companies to make their generic versions of the drug.

Judge Koeltl had also further decided that Bristol acted improperly when it filed the additional patent for BuSpar. William R. Dunnett, a spokesman for Bristol said the company was disappointed by the decision but would continue to defend itself against the charges in the lawsuit. "We're studying the decision carefully and reviewing all our options," he said, "including the possibility of an appeal."

In his decision Judge Koeltl stated that Bristol had "no objective basis" to contend that the additional patent was a valid one that should stop the generic drug companies from selling their versions of the drug. Thus this court again rejected the "metabolite theory".

The FTC submitted a legal brief siding with the generic drug companies Mylan Laboratories Inc., Watson Pharmaceuticals Inc. and a third generic drug company against Bristol-Myers Squibb Co. in this suit. The state of New York and 28 other states also filed an anti-trust lawsuit against Bristol-Myers Squibb Co. in the BuSpar matter. The anti-trust suit alleges that Bristol illegally tried to keep the cheaper generic versions of the anti-anxiety drug off the market, which resulted in the consumer having to pay higher prices for the drug.

The complaint also alleges violations by Bristol of federal anti competitive laws. The company tried to get a 3-year extension for its patent for BuSpar through legislative fiat, as we discuss further on in this article. The generic drug companies suit alleges that Bristol submitted a last minute patent in a blatant attempt to extend the life of the patent for BuSpar even though they knew that the new application was merely done as a delaying action. The plaintiff asserted that such an action is a violation of the anti-competitive laws of this country. Bristol's court papers asserted that even if it had made misrepresentations to the government, the U.S. Constitution protects such misrepresentations as "petitions".

There have been several facets to the legal tussle over BuSpar. On October 12, 2001 the U.S. Court of Appeals for the Federal Circuit (CAFC) ruled that Judge Ricardo M.Urbina of the U.S. District Court for the District of Columbia did not have legal authority to order the FDA to remove Bristol-Myers' drug "new BuSpar" from its Orange Book. Even though this court ruling has come more than 6-months after both Mylan Laboratories and Watson Pharmaceuticals, Inc.6-months generic exclusivity period has expired, it hadserious implications for the generic drug industry.

Although the ruling in the case applies to Mylan and not to Watson, both companies are affected by it. Both generic drug companies have had their generic version on the market for more than the 6-month exclusive period, but can Bristol now sue them for patent infringement? Can the generic drug companies use the defense that the generic versions were sold under the direction of Judge Urbina's ruling? Since other generic drug companies have now come out with their versions of Buspar, can they now also be sued for patent infringement? Will the consumer lose out because the only BuSpar that he/she can purchase will be the higher priced brand name BuSpar?

To go over briefly the facts of the case Bristol-Myers produces BuSpar, a prescription drug used in treating anxiety disorders and the patent for BuSpar was due to expire on November 22nd, 2000. Watson Pharmaceuticals, Inc. (5 and 10 mg. doses) and Mylan Laboratories (15 mg dose) are generic drug company that were ready to market their versions of BuSpar as soon as the patent on it expired. Watson's generic version of the drug is called Buspirone. Watson had made an abbreviated application to the FDA for approval of their drug expecting to go ahead with production and sale on November 23rd, 2000.

On November 21, 2000 Bristol filed for a new patent application, related to BuSpar ($709 million in sales in 2000) that Bristol wanted to be placed in the FDA's "Orange Book". This new patent was based on the "metabolite theory". The metabolite defense, which first surfaced in the mid-1980s, relies on the manufacturers' ability to identify and separately patent chemical compounds created naturally in the body when a drug is digested. This is the theory that Bristol depended on in its new patent application for Buspar. So far no court has upheld the "metabolite theory".

Whenever a drug company asks to be listed in the FDA's Orange Book (a book that lists all drugs made by the drug companies), the FDA must list the drug. The new patent dealt with a discovery that a compound was created in the body when a patient swallows BuSpar that plays a critical role in the drug's activity. Under the Hatch-Waxman Act the FDA is prohibited from approving any generic manufacturer's abbreviated new drug application until at least 45 days after the generic company (Watson) notifies the patent holder (Bristol) of its position opposing the new patent listing in the "Orange Book". Watson and Mylan both opposed the new patent listing for BuSpar.

Bristol filed an infringement action against both Mylan and Watson under the Hatch-Waxman Act so that the FDA's approval of the generic application could have been denied for up to 30 months. On November 30 Watson sued the FDA seeking to prevent the listing of the "new Buspar" in the Orange Book. On January 18th, 2001 the U.S. District Court for the District of Maryland ruled in favor of the FDA thus allowing Bristol's new patent for BuSpar to be listed in the "Orange Book".

Thus in effect the life of the patent can be extended through extensive court action, and the consumer may be the one who pays for this delay. Judge Ricardo M.Urbina of the U.S. District Court for the District of Columbia ruled against Bristol in the Mylan suit on March 13, 2001. The judge ordered the FDA to immediately approve Mylan's request to be able to sell their generic version of the drug (buspirone). The judge stated " Bristol not only limits the public's access to low-cost drugs, but impedes the very innovation the Hatch-Waxman is designed to promote". The judge further ruled that Bristol had made contradictory statements to the U.S. Patent Office and to the FDA to get their approvals.

Both Mylan and Watson have now filed anti-trust suits against Bristol seeking treble damages and injunctive relief for Bristol's illegal conduct in this matter. In addition to the suits filed by Mylan and Watson, a coalition of consumer groups has filed state and federal lawsuits against Bristol charging the drug company with using illegal means to extend the patent life of BuSpar. The suits were filed in the U.S. District Court of New York for the Southern District and in state courts in New York, Florida and Maine.

The suits allege that Bristol filed false secondary patents to prevent the introduction of a generic competitor to BuSpar. The coalition filing the suits is called the Prescription Access Litigation (PAL) project. Members of the coalition include the NY Statewide Senior Action Council, Citizen Action of New York, Consumers for Affordable Health Care Foundation, Health Care For All and the Massachusetts Senior Action Council. 

In a lawsuit filed in Federal District Court in the District of Columbia, the attorneys general from 29 states accused Bristol-Myers Squibb of illegally profiting from denying the introduction of a generic version of the drug Taxol which is used in the battle against cancer. The lawsuit alleges that Bristol and American BioSciences filed a "sham court action" to delay the generic version of the drug from being sold to the consumers, thus causing their residents millions of dollars. The states are seeking to recover the extra money that the state governments and its residents had to pay for the drug.

Taxol was discovered by government scientists at the National Cancer Institute at a cost of over $32 million. For a mere 0.5% of the royalty the government granted Bristol the exclusive right to sell Taxol in the U.S. for five years starting when the FDA approved the drug in 1992.

The states' lawsuit contends that Bristol illegally extended the five-year period by fraudulently obtaining two patents from the U.S. Patent and Trademark Office. Taxol itself cannot be patented, but the delivery method can. Bristol extended the five-year period through legal maneuvering, and when that failed the states claim it colluded with American Biosciences, a small company that had a patent for the subterfuge.

The collusion took place in September 2000 when Bristol's extended patent period was due to expire. American Bio sued Bristol demanding that it file information about its patent with federal regulators. That step would delay the introduction of any generic version of Taxol for up to 30 months.

AARP recently announced that it has joined the Prescription Access Litigation project (PAL) in many of the lawsuits involving patents and prescription drugs including the suit against Bristol in the BuSpar matter. In addition to this suit AARP also announced that it would join the plaintiffs in two other suits.

In the 2nd suit that AARP is joining with the plaintiffs, it is alleged that AstraZeneca PLC and Barr Labs Inc. illegally colluded to keep a generic version of the breast cancer drug Tamoxifen off the market. In the third suit it is alleged that Schering-Plough Corp., American Home Products (recently renamed Wyeth) and a closely held small company by the name of Upsher-Smith Labs conspired to keep a generic potassium-chloride supplement off the market. PAL lawsuit alleges that these illegal activities caused the consumer to overpay for these products. We discuss the BuSpar suit in more detail a little later in this article.

A suit was filed in Middlesex County Superior Court in New Brunswick, N.J., by several dozen health insurance companies alleging that Bristol-Myers Squibb paid Danbury Pharmacal $72.5 million in order to induce Danbury to keep its generic version of Buspar off the market. Danbury was later acquired by Schein Pharmaceuticals, which in turn has been acquired by Watson Pharmaceuticals Inc.

The payments were allegedly made in installments from 1995 through 1998. It was further charged in the lawsuit that the payments were made to induce Schein to drop its efforts to challenge Bristol's patent on BuSpar which was due to expire.

The FTC announced that it favored amending the Hatch-Waxman Act of 1984 so that only one automatic 30-month stay be allowed on the original patent. The study that the agency conducted on the subject concluded that provisions of the law that allow multiple 30-month stay are "problematic" because they can improperly delay generic competition.

Senator John McCain (R.-Ariz.) and Senator Charles Schumer (D.-N.Y.) along with 17 other senators have reintroduced their bill which died in Congress last year. The Senate had passed the bill last year by a vote of 78 to 21. The McCain-Schumer bill restricts the automatic extension of a drug patent's life to one 30-month period of time on the original patent only. Senators Susan Collins (Rep.-Me.) and John Edwards (Dem.-N.C.) were instrumental in having the bill passed in the Senate with the more than 60-votes needed for passage. The CBO has estimated that the bill could cut the nation's overall drug spending by $60 billion or 1.3 %, over the next ten years. Twenty-eight Republicans, 49 Democrats and the one Independent, James Jeffords of Vermont voted for the bill's passage. The House however failed to pass this legislation. To view how this legislation is progressing please see our article Patents and Prescription Drugs-Part II

Senators John McCain (Rep-Az.) and Charles E. Schumer (Dem-N.Y.) originally introduced the legislation in 2000 to address the problem created by the granting of automatic 30-month delays for each and every patent that the brand name drug company claimed subsequent to the original patent. Their proposed law would in most cases eliminate the automatic 30-month extension once the original patent's life expires.

The bill also included legislation aimed at eliminating the practice by the brand name drug companies of paying off the generic drug companies to keep the generic drug off the market for the 180-day exclusivity period that the generic company enjoys once the patent has expired. It would also give the generic-drug companies the right to challenge some patents filed by the brand name drug companies as frivolous filings.

Even though a great deal of publicity has been given to the idea that increased usage of generic drugs will help to hold down the rising cost being born by the public for prescription drug this in and of itself is not the sole answer. As a matter of fact, according to IMS Health, a pharmaceutical information company, the price for generic drugs are increasing almost twice as fast as prices for brand-name drugs.

One of the reasons that this is occurring is due to the fact that the generic drug industry is consolidating, leaving fewer generic drug companies to compete in this area. Another reason why this is occurring is due to the higher prices being charged by the generic drug companies for the 6-month period of time in which a particular generic drug company has marketing exclusivity for the brand- name drug that is just coming off patent. The generic drug company that has this 6-month exclusivity period will charge a higher price for the drug during this period of time

On top of all of these above reasons, drug wholesalers, drug plan managers and pharmacies have found that they can make a higher profit margin on a generic drug than they can on a brand-name drug.

The average price of a generic drug rose 15%, to $14.70 from $12.79 in the corresponding period last year according to IMS Health. Price of all brand-name drugs rose 8.8%, on average, to $77.02 from $70.79 in the same corresponding period. Some of the generic drug companies have been raising the price of some of their older drugs for which there has been a high demand.

Consumers spent $19.4 billion on generic drugs for Jan.1 through Nov.1 of 2002 compared with $98.6 billion on brand-name drugs. Almost half of all prescriptions filled in 2002 were for generics. The five largest generic drug companies ( Teva, Geneva, Watson, Mylan and Ivax) accounted for over 50% of generic drug sales in 2002.

The over-the-counter version of Schering-Plough's anti-allergy medication Claritin is now available at CVS Corp. and Rite Aid Corp. since the patent on Claritin has expired. Wyeth announced that its generic version of Claritin called Alvaret (loratadine) is now available in pharmacies.

WellPoint Health Networks, the health insurer that had brought the original action to have Claritin switched from a prescription to a non-prescription medication said that it was mailing coupons to 400,000 members to reduce their cost for Alvaret, since generic drugs are not covered by prescription drug coverage insurance plans. This would help its members deal with the fact that the drug would not be covered by the insurer under the plan, since generic drugs are usually not covered by prescription drug plans.

The coupons will go to members who previously had used Claritin, Allegra or Zyrtec which are also prescription anti-allergy drugs within the last 6-months. Robert C. Seidman, chief pharmacy officer of WellPoint, said that with the coupon, Alavert would cost 35 cents each, or $11 for a 30-day supply. Schering's generic version of Claritin will cost $1 to $1.30 a pill, or $30 and $39 for a month's supply. Prescription Claritin had cost about $2.75 per pill or $82.50 for a month's supply. As a matter of fact this writer saw Claritin being advertised at his local Duane Reade store for $9.99 for a month's supply.

The FDA voted to allow Schering-Plough's anti-allergy medication Claritin to be sold as an over-the-counter drug instead of being bought by prescription only. For those who are on Medicaid the changeover to OTC status for this drug is a negative since Medicaid does not pay for OTC drugs while it does pay for prescription drugs. Insurance companies will also therefore not have to pay for reimbursement for co-payment claims for the usage of Claritin. Most insurance companies are hiking the co-payments for the other anti-allergy drugs in an effort to get the consumer to use the OTC version of Claritin instead of the others, which are available only as prescription drugs.

The FDA first began reviewing over-the-counter drugs for safety and efficacy in 1972. In the case of Claritin, the generic version will have the same amount of active ingredients as the prescription brand contained. No decision has been rendered yet as far as the switching from prescription to generic status for the other anti-allergy drugs Allegra (Aventis SA) and Zyrtec (Pfizer).

In looking at the history of the Claritin case Schering had originally opposed allowing the drug to be sold as a generic drug. An FDA advisory committee had recommended that Claritin be approved as an over-the-counter drug to treat chronic hives (chronic idiopathic urticaria). Incidentally an FDA advisory panel voted in June to recommend that the heartburn drug Prilosec could be sold as an over-the-counter medication. The FDA will rule on this matter shortly. Claritin can be purchased in Canada without a prescription. FDA rules do not allow both a prescription and an OTC product to be sold at the same time.

Schering then filed an application with the FDA to switch all forms of Claritin and Claritin-D from prescription to over-the-counter status. The FDA committee reviewed the application on April 22-23, 2002 and voted to allow the switch. WellPoint Health Network brought the original petition to the FDA to allow Claritin to be sold as an over-the-counter drug and is now asking federal regulators to do the same for Clarinex. Some experts claim that Clarinex, which was introduced in January 2002, is merely a purified version of Claritin.

Health insurance companies hope to switch consumers to the generic versions of Claritin as soon as they come onto the market. At that time they will no longer reimburse their members for using the prescription version of the drug. The average OTC antihistamine sells for $.92 while the average prescription antihistamine sells for $2.31.

The patent for Claritin expired in December 2002 since it was granted in 1982. Schering originally claimed that the patents did not expire until 2004 and 2012 for Claritin-D. Claritin's U.S. sales totaled $2.7 billion in 2001, or about 28% of Schering's total sales for the year.

Schering had sued Impax Laboratories and 14 other companies in federal district court in Newark alleging patent infringement of the Claritin patent. Schering alleged that the 15 companies had submitted applications with the FDA to market generic prescription or over-the-counter versions of Claritin. Impax had applied to the FDA in November 2000 for permission to market tablets combining loratadine and pseudoephedrine sulsion in a formulation that Schering claims matches that of is Claritin-D-24 Hour-Extended Relief tablets.

Schering has introduced its next generation anti-allergy product Clarinex, in the hope of retaining the market that Claritin established as the leading anti-allergy drug. Once a drug company starts selling its patented drug in the generic version it can not continue to sell it in the prescription version. A huge advertising campaign has been initiated by Schering to get Claritin users to switch to Clarinex. Johnson & Johnson's McNeil Consumer Healthcare unit and American Home Products Corp.'s Whitehall-Robins unit has dropped its plans to market a generic version of Claritin.

In July 1998 Blue Cross of California/Well Point Health Networks filed a Citizens Petition with the FDA requesting that 3 of the most popular anti-histamines be switched to over-the-counter status from prescription status. The three are Aventis SA's Allegra, Pfizer's Zytec and Schering's Claritin.

An advisory panel to the FDA reviewed this petition on May 11, 2001. The advisory panel consisted of 23 members who are experts in the field of pharmacology. The manufacturers of these anti-allergy drugs opposed the change to over-the-counter status since this would sharply reduce the price that the drug is sold for in the U.S.

An advisory panel had previously ruled that the 3 drugs were safe enough to be bought without a prescription. The advisory panel's decision is not binding on the FDA, and so the process required the further collection of research data, hearings and then a ruling on the matter by the FDA itself. The second generation of antihistamines is considered safer than the first generation because among other things they are less drowse inducing.

Health and Human Services Secretary Tommy Thompson, after testifying before Congress regarding the HHS budget, stated that it was his personal opinion that "some" of the 3 above mentioned antihistamines should be made available as over-the-counter medications. He did not mention any timeframe within which he expected this to be done, though he did indicate that he expected a decision on the matter shortly.

The drug industry argued that in allowing the drugs to be bought without a prescription you are thereby eliminating the need to be seen by a competent medical professional. With the rise in asthma cases reaching epidemic proportions you are putting many people at risk that it is asthma which can be deadly rather than an allergy that is causing the problem.

Many legal experts feel that the FDA does not have the power to change a drug from prescription to OTC status if the manufacturer opposes such a switch. The question arises that if the FDA does have the power to change the status how can you deprive the drug companies of their legal right to the full life of their patents?

The only other time that a drug was switched from prescription to over-the-counter status was in October 1982 when Alupent for asthma was switched to OTC status. Shortly thereafter the FDA reversed this switch, and even today Alupent has remained a prescription medication. The FDA had rejected the application of two drug companies in 2000 to change the classification of their statin drugs that lowered cholesterol levels from prescription to generic.

The National Consumers League is urging the FDA to deny a petition to make Clarinex an over-the-counter medication, citing safety and economic concerns for the consumers. WellPoint Health Networks had filed the original citizen's petition to gain over-the-counter approval for Clarinex, a year after it had brought the petition to the FDA to have Claritin declared an over-the-counter medication

Chief Judge John W. Bissell of the U.S. District Court in Newark N.J. had granted a motion for summary judgment against Schering-Plough Corp. in a patent lawsuit over the patent protection period for Claritin. Schering had claimed that its patents protected the drug until 2004. The respondents had claimed that only the original patent filing, and not any subsequent patent filings should be used in determining when the patent should expire. The judge found that certain claims of U.S. Patent No. 4,569,716 were anticipated by the prior patent and thus were not valid. Thus the patent protection for Claritin expired on December 19, 2002.

The World Trade Organization failed to break the yearlong deadlock over the issue of patent drugs and the ability of the poorer countries to bypass patent laws in obtaining drugs from generic drug manufacturers. The United States did pledge however that it would not take any country to court for breaking current trade rules by exporting cut-rate drugs to poor countries.

The U.S. said it was unable to accept the draft accord because it covered medicines for more diseases that Washington thought needed to be included in such a list. The wealthier countries felt that the number of diseases covered by the agreement should be limited to H.I.V. and AIDS; malaria; tuberculosis; or other infectious epidemics of comparable gravity. Developing countries felt that each individual government should determine on its own which diseases constituted a public health crises in its borders. Diseases such as cancer and asthma are just as life threatening to the public as are any other diseases.

The members had agreed at their meeting in Daha, Qatar, in November 2001, that poor countries should be able to produce their own generic drugs to deal with public health emergencies, without permission from the drug companies that hold the patents for the needed drugs. The poorer nations have argued that they do not have the industrial capacity to produce these drugs on their own and should be allowed therefore to import them. The WTO members pledged to resolve the issue by yearend, but they have been unable to resolve the issue.

The trade organization will take up the issue again next year, and officials said they hoped to reach an agreement by February 11, 2003. Robert B. Zoellick, the U.S. trade representative, issued a statement saying that the Bush administration would call on other nations to join in the pledge and allow poor countries to import inexpensive generic drugs even if that meant breaking a patent.

The December 11 edition of the Wall Street Journal had an article entitled "Spain's Generics Are a Headache For Drug Firms" written by Keith Johnson and Vanessa Furmans. The article points out that Spain does not have patent protection developed in 1992 based on European Union norms.

"Spain has no courts or judges specialized in patent law or the complexities of pharmaceutical disputes. That makes it hard to get a preliminary injunction against the generics makers, lawyers say, so copied drugs stay on pharmacy shelves. Trials meanwhile, can drag on for years." All pharmaceutical compounds patented in Spain before the 1992 law enjoy limited protection which is called a "process patent".

A generic version of Prilosec, an ulcer drug is now available at about 20% less than the brand name drug is available for. It is being manufactured by KUDCo., a unit of Schwarz Pharma AG of Germany. Because of its limited manufacturing capabilities at this time, distribution is largely limited to retail pharmacies and will exclude large government purchasers.

AstraZeneca PLC, which manufactures Prilosec, has switched the bulk of its advertising over to the patent-protected next generation of the drug called Nexium away from Prilosec. Merck & Co. receives about one-third of the profits from the U.S. sales of Prilosec.

Mylan Labs, Inc. announced that it had filed suit against Schwartz Pharma for infringing on its patent for a generic version of AstraZeneca's blockbuster medication Prilosec. Mylan says it has an exclusive license to a 1997 U.S. patent for the generic compound and that Schwarz does not have the legal right to sell its version in the U.S. This now becomes an interesting sidelight to what had been a battle between Schwarz and AstraZeneca patent litigation.

Three of the generic drug manufacturers of Prilosec announced that they would form a three-way cooperative effort to manufacture the generic version of the drug later this year. The three companies are Andrx Corp., Gen-Pharm Inc.and Kremers Urban Development Co.(KUDCo) a division of Schwarz Pharma.

This arrangement arose, as a result of the decision of Judge Barbara S.Jones that the generic version of AstraZeneca PLC's Prilosec (omeprazole) made by KUDCo did not infringe on Astra's patents. In the same opinion she did rule in favor of Astra against the three other generic drug manufacturers involved in the patent suit.

KUDCo stated it will launch the generic version of Prilosec "at risk" in the fourth quarter of 2002. When we use the phrase "at risk" it means that if Astra wins and the decision in the lower court in favor of KUDCo is reversed, KUDCo would become liable for treble damages. KUDCo has entered into a deal with Andrx and Gen-Pharm whereby the 180-day exclusivity period held by the latter two generic drug companies will be transferred to KUDCo. The royalty fee involved will start at 15% of initial profits generated by KUDCo, and would gradually decrease to 6.25% over time.

The fourth generic drug company involved in the suit is Dr. Reddy's Cheminor. Under the decision the generic drug companies that lost the lawsuit would not be able to produce their generic versions of Prilosec until 2007. The judge has delayed a decision in regards to a "prior" patent claim by a Korean company.

According to F. Dominic Cerrito, a lawyer for KUDco, the judge recognized that KUDco had a "distinctive formula" for making omeprazole. KUDCo successfully argued that it coats omeprazole with a non-alkaline substance, and that it has its own patent on this method, valid until 2016. Merck & Co. co-markets Prilosec with Astra so it also is a beneficiary of Judge Jones' decision. The three losing generic drug companies declared that they would appeal the decision of Judge Jones. Astra in turn is appealing the decision rendered by Judge Jones in favor or KUDco. A spokesman for Astra stated that the court's decision "revealed that the court made reversible errors in determining key facts and applying the law."

Since the FDA had already approved Andrx's and Genpharm's right to market a generic version of the Prilosec , KUDco had to reach a marketing agreement with these companies before it could make a generic version of the drug in the early part of 2003.

Prilosec, the ulcer drug which is marketed outside the U.S. under the brand name Losec with over $6.2 billion in worldwide sales last year is the third largest selling prescription drug in the world. Pfizer's Lipitor and Merck's Zocor, both of which are cholesterol-lowering drugs are the number one and the number 2 selling drugs in the world. The original patent for the drug was due to expire in April 2001.

Astra has tried to extend the life of the patent in several ways. It did win a 6-month pediatric extension of the expiration of the patent by taking advantage of the pediatric extension law passed in 1997. In Europe the company withdrew the original capsule form of Losec from the market just before patent expiration, and replaced it with a new, protected formulation.

Astra has teamed up with Proctor & Gamble in order to sell a generic version of Prilosec. An advisory committee of the FDA originally denied the company's request to allow the drug to be sold as an over-the-counter medication. In order to be able to win approval from the FDA to switch a drug from being a prescription drug to become a generic drug the following is required:

• The generic drug must be proven to be safe for consumer usage
• It must be shown that the patients can treat themselves
• The drug's proposed label can be understood without a doctor's intervention

If Proctor and Astra get approval to sell a generic version of Prilosec competitors would not be able to sell over-the-counter versions of the drug for 3-years. Proctor & Gamble has agreed to market the over-the-counter version of the drug with Astra. The advisory committee declared that it was "unclear "whether the benefit of making Prilosec available without a prescription outweighed the risks. The panel did declare that the drug was effective in treating heartburn.

Astra also introduced its next generation of anti-heartburn drug called Nexium. In comparison tests done between the 2 drugs, Nexium worked faster and slightly better than did Prilosec. The FDA approved Nexium for the treatment of heartburn and other symptoms related to gastro-esophageal reflux disease or GERD.

AstraZeneca PLC had instituted the patent violation suit against the four generic drug manufacturers in connection with its patents for Prilosec in December, 2001. The trial began in New York before Judge Barbara Jones who would adjudicate the case without a jury. In the meanwhile AstraZeneca has been switching Prilosec users to its newer anti-allergy drug Nexium as quickly as possible.

The Food and Drug Administration had approved Genpharm and Andrx Corp.'s generic version of Prilosec. A letter signed by 18 governors had been sent to Secretary Tommy Thompson of Health and Human Services requesting prompt action by the FDA in approving the generic version of the drug.

In a "approvable letter" dated August 8, 2002 the FDA told Proctor & Gamble that it needs to devise a clearer label before it will be permitted to sell the generic version of Prilosec. The FDA told Proctor that it must perform a "label-comprehension study" to prove that patients can understand the label.

This delay could mean that other generic versions of Prilosec could get onto the market before the AstraZeneca PLC-Proctor generic version of the drug. Prilosec is a medication that has to be taken for many weeks on a regular basis for it to work properly. The suit by Mylan could further confuse the issue.

Skepticism is riding high in connection with the meeting next month of the 144 countries that comprise the World Trade Organization's ability to reach an agreement regarding the drug- access issue. Failure to come to an agreement on this issue would slow progress of the overall trade talks that are supposed to conclude by 2005.

As we discuss later in this article, trade ministers had reached an agreement last year that poorer countries that were faced with serious life threatening diseases could avoid patent issues by buying generic copies of patented drugs from manufacturers in other countries.

Under the U.S. and European Union proposals the exemption from the patent laws would extend only to drugs that fight AIDs and malaria, and then only for the poorer nations. There would be strict limits on which countries could produce the generic drugs involved in fighting these diseases. The developing nations want access to a wider range of drugs, and allow any poorer country to contract for deliver of patented medicines from whomever it chooses.

According to the FDA website listing Paragraph IV patent certifications, a patent challenge was recently filed against Pfizer's Lipitor for the 10-mg, 20-mg, 40-mg and 80-mg doses. Lipitor sales in 2002 are expected to be in the $5.3 billion range.

Pfizer lists 5 patents in the Orange Book that expire between 2009 and 2015. Thirty-five percent of Pfizer's worldwide pharmaceutical sales are at risk (on a stand-alone basis) for Paragraph IV challenges. In addition to Lipitor, there are ongoing patent challenges to Neurontin, Norvasc, Glucotrol XL and Accupril.

One of the fears that the drug companies have is that the cheap priced drugs will be misappropriated and resold back to patients in the wealthier countries instead of being administered to the people in Africa for whom they were intended. Some recent events have shown that there is a valid basis for their concerns.

Law enforcement officials in at least four European countries are presently investigating schemes in which deeply discounted HIV and AIDS drugs sold to some of the poorest African countries were shipped back from Africa and resold in Europe at huge profits by some unscrupulous wholesale drug dealers.

The problem came to light when investigators discovered that low priced AIDS drugs sold to African nations by GlaxoSmithKline PLC were being re-imported at airports in Paris and Brussels. Glaxo estimated that about one-fifth of all the AIDS marked-down priced drugs had ended up in the hands of the illegal wholesalers, resulting in a loss to the company of about 16 million euros ($15.75 million). The drugs were intended for patients in Senegal, the Ivory Coast, the Congo Republic, Togo and Guinea-Bissau.

Several of Europe's largest drug importers purchased the drugs, which were reimported, from Africa. There is no evidence that they knew of the illegality of the transaction, especially in light of the fact that they did not pay deeply discounted prices for the drugs. There is however some evidence that some of the humanitarian organizations that distribute the drugs in Africa at least knew that the products were being resold. So far Glaxo is the only drug company to confirm that its discounted AIDS drugs have been illegally resold.

Thus we are faced with a situation where a program intended to aid the impoverished is being abused by thieves willing to turn a profit at the expense of the impoverished who are the most vulnerable. The drug companies are presently working out a system so that different markings will appear on the discounted drugs or their labels that are sold to the poorer countries at the deeply discounted prices from the appearance of the regularly priced drugs.

Drug companies do the research and development work needed to discover the new drugs, and as a reward for this they have free rein to set the price of the drug as they see fit. Of course it can be argued that they will now be selling millions more of the drug to people to whom they never would have sold the drug to and thus bring down the overall cost of manufacturing the drug through mass production. If you deprive the drug companies of their right to make a fair profit on their products, you may in fact hurt the research budgets that help them discover new and valuable other drugs.

Brazil is once again challenging the pharmaceutical industry by offering to share its generic AIDS drugs and technology used to produce them with the poorer nations of the world. Under the plan the Brazilian government labs would donate generic drugs and their know-how in making them to nations too impoverished to make them on their own. Thus the patent rights of the pharmaceutical companies would be violated because of the pressing health emergency needs of impoverished countries.

The organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIP) allowed for each individual nation to decide for itself what constituted a national emergency. With such a declaration a nation would be allowed to bypass patent laws to be able to buy drugs that are needed to prevent a disaster among its citizens. In the case of Zimbawe over 25% of its adults are infected with the virus.

Last month Zimbawe was awarded almost $23 million over the next two years by the new Global Fund to Fight AIDS, Tuberculosis and Malaria. Money from this fund will be utilized to pay for the purchase of the drugs. According to Dr. David Parirenyatwa, the deputy health minister the country was committed to complying with its international trade obligations, but the pricing of the AIDS drugs made this impossible to do.

Zimbawe has become the second country to declare its HIV epidemic a national emergency, which in turn will mean that it will sidestep patent laws and import generic substitutes. As we discuss later in this article, the World Trade Organization meeting in Qatar in November 2001 set the stage for this to happen.

Nigeria was the first African country to announce that it would bypass patent laws because of the national health emergency created by the HIV virus. It began to import generic drugs to treat its infected residents made in India by Cipla and by Rambazy, at a fraction of the cost of Western-produced drugs. It is estimated that the cost for the generic anti-AIDS medicines will run at about $350 per year per patient.

The government said it undertook this step because the national average HIV prevalence is 5.8% among its adult population. Nigeria is Africa's most populous country with over 120 million people. Originally the country had a much lower infection rate than did the rest of Africa. It is estimated that 3.47 million people now have shown to be either HIV positive or have come down with AIDS.

Thus the issue surfaces one more time as to the conflict between a countries "right to protect the health" of its citizens and the patent law rights of the pharmaceutical company that is the legal holder of the patent. The government of Nigeria said that it would start the treatment at 18 centers across the country with a "limited number" of patients for the first three months. The next step will entail expanding the program to 100 centers that will be able to treat about 10,000 patients the first year. 

Thailand's state-run drug manufacturer plans to begin marketing a pill in April 2002 that will combine 3 popular patented AIDS drugs at a cost of 20 baht or 46 cents a dose. The three drugs are: GlaxoSmithKline PLC's Epivar, Bristol-Myers Squibb's Zerit and Boehringer-Ingelheim gm-Bh's Viramune, which each cost about $4 per pill in the U.S.

Krisana Kraisintu, a chemist heads the operation in the country and has figured a way to combine the 3 drugs into one pill to help treat some to the 750,000 people in Thailand who are infected with HIV. The three-in-one drug is intended for consumption domestically in Thailand, but the humanitarian group Doctors Without Borders has indicated it intends to buy some of the drug for use elsewhere in the world. Two Indian generic drug manufacturing companies, Cipla Ltd. And Ranbaxy Laboratories Ltd., say they are selling a comparable pill.

The November 16, 2001 issue of the New York Times has two articles about the results of the World Trade Organization meeting in Doha, Qatar, and its affect on patented prescription drugs. One article by Jennifer Rich is entitled "Brazil Welcomes Global Move on Drug Patents" and the other is by Celia W. Dugger and is entitled " A Catch-22 on Drugs for the World's Poor".

In the article by Ms. Rich, she states that "The decision also promises to open the way for Brazil to realize a long-held ambition: to export its low-cost versions of AIDS drugs to countries without the resources to produce their own". Brazil feels that the agreement gives each of the 144 members "discretion to set its own rules for issuing "compulsory licenses" which force patent holders to allow rivals to manufacture patented drugs". Each country is free to set its own criteria for what constitutes a national public health emergency.

In the article by Ms. Dugger, she points out the fact that even though the poorest countries have the right to make the low cost generic drugs few of them have the plants capable of making them. Her article questions the right of the generic drug company to export the product to another country. She goes to point out however that even if one of the generic drugs companies could export its products, the poorest countries still do not have any money to pay for them. Added to this is the problem of distribution of the drug in a country that has no distribution facilities, nor properly trained health professionals to administer the drug.

Two Chinese companies have applied to the Chinese government to be allowed to make their generic versions of some of the patented drug cocktails needed to fight the disease. A private company, Shanghai Desano Biopharmaceutical Co. has applied to the country's State Drug Administration to produce two generic HIV drugs, and it also plans to apply to make AZT, the first medicine approved to treat HIV. A second company, state-owned Northeast General Pharmaceutical Factory has also claimed that it has applied to make HIV drugs for domestic sale.

GlaxoSmithKline PLC, which holds patents for several key HIV drugs says that it has been in negotiations with the Chinese government for the last two months in connection with reducing the price of its AIDS drugs. Thus the situation in China, where a widespread AIDS epidemic threatens the lives of many of its citizens, looks like it may have similar results as to what happened in Africa as we discuss below.

Negotiators concluded an agreement at the meeting in Doha, Qatar that would give third-world countries the right to, in effect obviate the patents for certain drugs when a serious health emergency exists in that third world country. According to news reports the United States whose delegation was lead by Robert B. Zoelick, the U.S. trade representative, was very instrumental in brokering the ultimate deal while working closely with Kenya and Nigeria. Switzerland, Canada and Japan led the opposition to the pact.

The agreement recognized the "right to protect public health", placing it above the patent rights of the pharmaceutical companies. The agreement also allowed for a 10-year delay in implementing patent laws on drugs, and allows the countries to decide for themselves as to what circumstances are sufficient for them to override the patent holders rights. The question as to whether or not these countries can import the drugs during a health emergency was referred over to a committee that will further study the matter. The meeting left unsettled the question as to exactly which diseases would be covered under the agreement that would allow a country to import generic drugs in the event of a serious health hazard to its citizens.

At one point in the dealings with Bayer over Cipro, Tommy G. Thompson, secretary of health and human services, threatened to override Bayer's patent for Cipro because of the critical situation that had arisen regarding the anthrax matter. Many of the developing nations argue that this is no different then their point when combating such diseases as AIDs wherein these poorer countries can not afford the prices being charged by the patent-holding pharmaceutical companies for their life saving AIDs cocktails.

Kafi Annan proposed the creation of a global fund to fight AIDS at a special meeting of the United Nations General Assembly in New York in June 2001. He had hoped to raise between $7 to $10 billion to help the African countries in their battle against AIDS, but only about $2 billion has been raised so far.

The U.S. has pledged $200 million which President Bush called "seed money", indicating that more would be pledged down the road. England and Japan have also pledged $200 million, Germany pledged $150 million and France $120 million. Private contributors, including the Billl and Melinda Gates Foundation have pledged about $101 million. A battle is developing between the European Union and the United States in regards to how the money should be spent particularly in regards to pharmaceutical drugs.

GlaxoSmithKline PLC announced that it granted a license to the generic drug company Aspen Pharmacare Ltd. of South Africa to produce and market three of Glaxo's patent-protected AIDS medicines in South Africa. Aspen will be allowed to sell generic versions of Glaxo's AIDS drugs, AZT (Retrovir), 3 TC (Epivir) and Combivir within South Africa to the public sector and also to certain nonprofits and charities located therein.

Thus for the first time we have the licensing of a patented drug to a generic drug company so that a drug becomes more readily available to users in South Africa who are faced with a serious health crisis. Glaxo and Shire Phamaceutical Group PLC, the licensor of 3TC, will waive their rights to any royalty payments. Aspen in turn has agreed to pay a 30% fee on net sales to one or more non-governmental organizations for AIDS education and prevention. Aspen feels that it can make a generic version of Combivir for a cost to the user of between $1 to $1.50 per day. This compares with its cost of about $17.23 per day in the U.S. Bristol-Myers Squibb is presently negotiating with Aspen for a similar agreement for its two AIDS drugs Zerit and Videx.

The U.S. government recently dropped its World Trade Organization complaint against a Brazilian patent law which was aimed at providing its citizens with cheaper access to patent medicines. Under the Brazilian law, enacted in 1996, foreign companies were required to shift production for a patented product to Brazil or license production of same to a local Brazilian company within 3-years of introducing it there, or risk losing its patent protection in Brazil. Brazil has permitted government-run laboratories to copy any foreign drugs with patents that predate the 1996 law. The practical effect of this law was to sharply lower the cost of drugs in Brazil. Initially the drug companies had complained that the law was violating their patent rights.

The reason why we are pointing out the situation in Brazil is because the implications of the patent situation in Brazil have serious implications for all drug companies throughout the world. Originally the Brazilian government had threatened to begin the process of issuing a license to the state owned laboratory called Far-Manguinhos to produce nelfinavir, which is the generic name for the patented drug Viracept made by Roche Holding, unless Roche lowered the cost of the drug by 40%.

After prolonged negotiations between Roche and the Brazilian government, Roche agreed to cut the price by a further 40%, which is about 30% of what the drug costs in the U.S. The drug companies fear that many of the third world countries will in effect invalidate their patents when a particular country feels that the health of its residents is being threatened by some serious disease. In reality the only defense that the drug companies have is the threat to stop doing business in that particular country. Brazil's AIDS program is considered a model for prevention and treatment in the developing world. There are an estimated 540,000 Brazilians infected with HIV which is the virus that causes AIDS.

Eight years ago most nations approved the Agreement on Trade-Related Aspects of Intellectual Property (TRIPs). The agreement committed those nations that signed the agreement to enforce drug patent laws. The pharmaceutical industry has feared that if a country went against the TRIPs agreement the patent safeguards of the agreement would break down. In deciding to sacrifice their pricing structure as the industry has done in the AIDS matter the industry is now arguing that generic manufacturers are not needed to relieve pricing pressures in the poorer countries.

The industry is claiming that they can give large discounts to deal with emergency situations and thus patent protections will be upheld. In countries that adhere to the TRIPs agreement patents run for 20 years for the filing of the patent application. Even under the TRIPs agreement countries can force the patent holders to license their patents to others if an "emergency" situation arises, thus in effect allowing generic manufacturers to step into some situations.

The World Health Organization estimates that some 30 million Africans are infected with the human immunodeficiency virus, H.I.V., which causes AIDS. Of the estimated 30 million who are infected in Africa, 5 million are ready for antiretroviral therapy according to W.H.O. Presently only 10,000 are receiving the drug cocktails needed to treat the disease in the African countries. Even if some of the African countries did have the money to pay for the reduced cost drugs, many of them do not have the medical and administrative capacity needed to deal with the outbreak

A three-hour meeting was held in Amsterdam between United Nations Secretary-General Kofi Annan, several top officials from the World Health Organization, UNAIDS (the U.N. agency that runs the AIDs program) and the CEOs of five of the leading drug companies to deal with the question of the AIDs drug situation.

Present for the industry were the CEOs of Abbott Laboratories, Bristol-Myers Squibb Co., Boehringer Ingelheim, Pfizer Inc., Roche Holdings Ltd., and GlaxoSmithKline. In a statement made at the conclusion of the meeting Mr. Annan stated: " We affirmed to them that the intellectual property regime is essential if companies are going to have the incentive to do the research to produce effective medicines for these diseases. But at the same time we need to ensure that the needs of the poor are protected."

Mr. Annan said that the industry officials agreed that their companies are willing to negotiate with the 50 least developed countries as a group rather than dealing on an individual basis with each country. The industry also agreed to make its reduced-price AIDS drugs available to certain private, non-governmental agencies and employers. Thus the continuing evolution of the question of patent protection versus the ability to pay and provide an adequate health care administration and medical system continues to dominate the news.

By importing the ingredients from Asia, Far is able to produce 8 of the 12 medications used in the treatment of AIDS at a much cheaper price than any other drug manufacturing company. According to Hilbert Ferreira, industrial director of Far-Manguinhos, the company produces what he calls "orphan drugs". The big multinational drug companies are not interested in producing these drugs "because they fight diseases of the Third World." There is not enough profit in these drugs to make them worthwhile candidates for the major drug companies and their Research and Development budgets.

Through recent expansions however, Far is able to produce these generic versions of some of these drugs in great enough amounts to be able to export them to other Third World countries. Included in this category of drugs are those used to fight malaria, leprosy and other illnesses that have largely disappeared in developed countries. It will be interesting to see what develops if Far decides to start producing some other prescription drugs for which the major drug companies have the patents.

Cipla Ltd., an Indian generic drug company asked the South African government for permission to sell inexpensive genetic versions of 8 of the 15 anti-H.I.V cocktails used to treat the disease. Cipla said they would charge as little as $350 per patient per year for the triple-therapy cocktail d4T, or up to $600 per year per patient for some of the other AIDS cocktail drugs. It is offering d4T for as little as 5 cents a tablet, versus the $2.23 that Bristol-Myers charges per tablet. Americans normally pay from $10,000-$15,000 for the same cocktail of drugs.

Shortly thereafter Merck announced that it would offer the cocktails to a number of South African countries at sharply reduced prices, namely $600 per patient per year for the protease inhibitor Crixivan, and $500 per patient per year for Sustiva which is marketed overseas under the name of Stocrin.. In the article we discuss the principle of "compulsory licensing" in patent law. Under this principle a generic drug company can petition a government to allow it to produce and sell a generic version of a patented drug if a health threatening epidemic has broken out in a country. If the government of the country that has been petitioned finds that such an emergency does exist, it need not abide by the requirements of the patent protection laws.

Two months after a new law went into effect concerning patent protection the Egyptian Ministry of Health announced that it would authorize 12 local companies to produce a generic version of Pfizer's patented drug Viagra. Dr. Mostafa Ibrahim, president of the Ministry of Health's department that administers pharmaceuticals stated that " We have to think of the interests of the poor people."

China acknowledged that over one million people in the country are infected with AIDS. The government also stated that it would manufacture its own generic versions of AIDS drugs if Western patent holding drug companies did not lower prices within the next few months.

This represents a big change in the Chinese viewpoint which up to now had been to negotiate prices with the patent holding drug companies rather than make generic versions of the drugs themselves and thus undercut the patents for these drugs. Up until now China had been an ardent supporter of protecting patent holders rights.

The Senate Judiciary Committee, chaired by Sen. Patrick J. Leahy (D-Vt) unanimously approved the Drug Competition Act of 2001 ( S 754). The bill which was introduced in the Senate on April 6, 2001 was sponsored by Sen. Leahy, Sen. Herb Kohl ( D-Wis), Sen.Charles Schumer (D-NY) and Sen. Richard Durbin (D-Ill). The bill is aimed at bringing to light agreements between patent holding brand-name drug companies and generic drug companies that delay the introduction of the generic drug for public consumption.

Sen Leahy said the bill would give the FTC and the Justice Department access to information on "secret deals" between drug companies aimed at delaying competition between brand name and generic drugs. The problem with this approach is that the deals are often not "secret deals", but are often settlement agreements arrived at between the parties that are approved by the courts.

In bringing civil actions against several brand name and generic name drug companies the Federal Trade Commission has brought to light an interesting development in the area of patent law and prescription drugs. Generic drug companies must file applications with the Food and Drug Administration before they are permitted to manufacture the generic version of a drug for which a patent is about to expire.

By filing a lawsuit against the generic company's application the drug company can often delay the introduction of the generic version for many years. The lawsuit alleges patent infringement claims against the generic company, and by making such a claim the brand name drug can gain years of patent protected revenues. We believe it is important to point out these cases to you the consumer to help you evaluate why prescription drug prices are so costly.

This practice had come under scrutiny several years ago, but because of the great number of anthrax cases recently, the situation must be examined even more closely. Bayer AG has the patent for Cipro which is due to expire in December, 2003. Cipro is an antibiotic that is best known for treating inhaled form of anthrax , and is Bayer's number one selling drug ringing up over $1.2 billion in sales for the company in 2000. In January 1997 Barr Laboratories Inc. settled its patent lawsuit against Bayer in connection with Cipro.

The court-approved settlement called for Bayer to make an initial $24.6 million payment to Barr. The settlement also allowed Bayer the option of making payments of between $27 million to $30 million per year until December 2003, or of Bayer's providing Barr with quantities of Cipro that Barr would sell at a discount in exchange for Barr's not producing Cipro. Under the terms of the settlement Barr had the exclusive right to sell Cipro six months prior to the expiration of the patent. Recently a federal appeals court in Washington upheld Bayer's American patent for Cipro. Thus the generic drug companies can not begin to make equivalents of Cipro until the patent expires in December 2003.

Thus the settlement in effect prevented the introduction of a cheaper generic form of Cipro, which has cost the consumer millions of dollars over the years. From Bayer's point of view the payment of up to $30 million a year to Barr is cheaper than losing the patent exclusivity which is good till 2003. From Barr's point of view, it is receiving up to $30 million a year to do nothing. The FTC is checking to see if these type settlements are anticompetitive. The companies claim these settlements are perfectly legal, since neither side could have been sure that it would have prevailed in any patent violation lawsuit.

Senator Charles E. Schumer (Dem-N.Y.) called for the government to pass legislation to allow the generic drug companies to produce their versions of Cipro. Secretary of Health and Human Services Tommy Thompson originally stated however that the government should not be allowed to break the patent law in this situation.

In the other civil complaint the F.T.C. alleges that Abbott Laboratories and Geneva Pharmaceuticals (a generic divisions of Novartis) conspired to keep the generic version of Hytrin off the market for several years. Hytrin is a blood-pressure drug. Geneva received a $4.5 million payment from Abbott in order to keep its generic version of the drug off the market for several months. Several of the drug companies face class-action suits by consumers and large purchasers of drugs because of the increased cost that the drug consumer had to pay as a result of the illegal actions of the drug companies.

The Senate Committee on Health, Education, Labor and Pensions, which is chaired by Senator Edward Kennedy (Dem.-Mass.) approved the legislation. Senator John Breaux, Democrat of Louisiana cautioned that it looks like none of the proposed Medicare prescription drug coverage plans had the needed 60 votes for passage of any of the proposals.

One of the unintended consequences of the Hatch-Waxman Act, or the Drug Price Competition and Patent Term Restoration Act of 1984, has been that the consumers have had to pay more for prescription drugs because of abuses between the generic and brand name drug companies. Senator Orrin Hatch (Rep.-Utah) stated early in 2002 that he thought that some changes would have to be made to the Act because of the abuses that have taken place under it. Sen. Hatch now however has asked for a delay in any effort to update the statute as proposed in a bill sponsored by Senators John McCain (Rep-Az.) and Charles E. Schumer (Dem-N.Y.).

Sen. Hatch said that the FTC is now studying generic and drug-patent laws, and is expected to issue its report early this summer. The FTC issued the report early in August 2002. He further stated "Let's get the facts before we change the law". Sen. Schumer said that he was not discouraged that Sen. Hatch spoke out against his proposed bill since Sen. Hatch has indicated that changes are needed in the law. Sen. Hatch has not commented since the FTC report was issue.

Under the act if a generic company files to produce a generic drug and is granted approval by the FDA, it is entitled to be the sole generic company to produce the drug for the first 180 days after the patent expires. One of the abuses that may occur is that the brand name drug company pays the generic company not to launch their product during this 180-day period.

Thus no other generic company can produce their generic version of the drug for 180 days. In effect the brand-name drug company has gained an additional 180 days period of time of patent protection. The consumer who must buy the drug suffers since he must pay the higher price for at least an additional 180 days.

In an attempt to prevent this abuse from occurring the FDA issued new guidelines stating that the 180 days started from the time of launch or upon the victory in the court process. The Federal Trade Commission has now also entered the picture and it has announced that it will institute a study of this practice to see its exact effect on the consumer.

The FTC will also study and review the 30-month stay period rule. This rule prevents the Food and Drug Administration from approving a generic application for 30- months if a patent-infringement suit is filed by the drug's patent holder against the generic company. This 30-month rule as a practical matter has the effect of lengthening the life of a patent for up to an additional 30 months.

This is especially true in connection with the FDA's "Orange Book". This book lists all the patented drugs and also lists claims for new patents on drugs previously listed in the book. By varying ever so slightly some element in a previously granted patent for a drug, the holder can claim that the change creates a new life for the patent.

Many drug companies wait until a patent is about to expire and then present the slightly varied prescription to the FDA to be included in the "Orange Book". It is then up to the generic drug company to sue the FDA to have the variation voided. The proposed study must undergo a period of public comment and then be approved by the White House budget officials. Thus the earliest that the study can begin will be early in the year 2001.

As we discuss later on in this article, there have been several situations where brand name drug companies have paid large sums of money to generic drug companies which in effect has delayed the introduction of the generic version of a drug. Wyeth Labs (formerly known as American Home Products) settled an action with the FTC in connection with its proceedings against them involving K-Dur 20, a high blood pressure medication.

The FTC alleged that American Home and Schering-Plough had illegally conspired to keep a low priced generic version of K-Dur 20 off the market. Under the settlement, American Home agreed not to enter into similar agreements in the future and to notify the commission before entering into some other types of agreements in the future. Schering-Plough and Upsher-Smith Laboratories went on to contest the matter before an administrative law judge at the FTC.

The administrative law judge at the FTC ruled that Schering and Upsher-Smith Labs did not break any laws when Schering agreed to make the payment to the generic company. The government has not indicated yet as to whether or not it will appeal this ruling. The administrative judge's decision was based on the fact that there was no way of knowing exactly how long the patent for K-Dur 20 would be valid. Therefore it was only reasonable for the parties to settle the matter without the need for a lengthy patent lawsuit.

The FTC had brought an administrative complaint against Schering-Plough and 2 generic drug companies (the Lederle unit of American Home Products and Upsher-Smith). The FTC alleged that Schering paid the 2 generic drug companies $75 million so that they would delay launch of their generic versions of the potassium-chloride supplement called K-Dur 20, which is a blockbuster drug prescribed for patients with high-blood-pressure or cardiac problems.

Both generic drug companies had instituted work in 1995 toward producing their generic versions of the drug. Schering sued both companies for patent infringement, which triggered the automatic 30-month stay of the application under the Hatch-Waxman Act.

Schering and Lederle negotiated a settlement for a $15 million payment to Lederle in return for which Lederle agreed not to market the generic until 2004. Schering made a settlement with Upsher for $60 million along the same lines. Even though the current patent for K-Dur 20 does not expire until September 2006, application for a generic version of the drug can be made if it can be shown that the patent will not be infringed on or is invalid.

An FDA advisory panel has recommended that Proctor & Gamble, in a marketing co-venture with AstraZeneca be allowed to sell its indigestion remedy Prilosec without a prescription. Please keep in mind that there is presently a trial in New York in which AstraZeneca is defending its patent life for Prilosec. Under the recommendation the label must state that the generic drug must be used before the onset of the indigestion unlike some of the other anti-acid drugs that can be used when you are having a gastric attack.

The FDA will act upon the advisory panel's recommendation sometimes this fall. As we discuss later in this article Schering-Plough is seeking to have its best selling anti-allergy prescription drug Claritin switched from a prescription to non-prescription status by the FDA. Two years ago the advisory panel had rejected the application for the switch for Prilosec, but both the dosage and labeling changes that will be made were sufficient enough for the advisory panel to change the ruling at the latest hearing.

Johnson & Johnson is also seeking over-the-counter approval for Mevacor, a drug used in fighting high cholesterol levels made by Merck even though the application for this type of change was rejected two years ago. Please also keep in mind that Merck markets the next generation of Mevacor which is called Zocor whose patent is due to expire sometime in 2006.

The generic drug companies are fighting the applications to change from prescription to non-prescription that are being made by the patent holders. Under the law as presently written, if a patent holding drug company voluntarily abandons its patent rights for a drug, it will have 2 years of exclusivity to sell the generic version of the drug. Thus in fact the brand drug company is fighting to become the generic company since half a loaf is better than no loaf. Instead of patent exclusivity they gain generic exclusivity even though the profit margin will be much less.

State Attorney General Betty Montgomery of Ohio is chairing a newly created task force of nearly 40 state prosecutors in exploring a series of lawsuits against the pharmaceutical industry similar to what occurred in the state actions against the tobacco industry.

Unlike the tobacco suits the states are spurning many of the private law-firms and the large contingency fees that went to those firms. Delaware Attorney General Jane Brady declined a request from Nevada officials to join two lawsuits brought by that state against the drug industry. Ms. Brady declined the invitation to join the suit saying: " I'm philosophically opposed to providing contingency-fee-payments to private attorneys to resolve matters of public-interest law".

The members of the task force discussed the pros and cons of hiring private attorneys in the case, with most states opposing the idea. Nevada Attorney General Frankie Sue Del Papa said she hired an outside firm because " We're a small state, and resources are very limited".

Eleven major U.S. corporations including Verizon, Eastman-Kodak, Wal-Mart Stores, Inc., Weyerhaeuser Co., GM, Georgia Pacific and Albertson's Inc. have formed a coalition with 10 states governors and a small group of labor leaders called Business for Affordable Medicine. Vermont's Governor Howard Dean has been the main spokesman for the coalition.

The objective of the coalition is to speed up the generic approval process. The group also wants to close some of what it calls the "loopholes" that exist under the Hatch-Waxman Act of 1984. These "loopholes" allow the brand name drug companies to prolong the life of their patents for more than 20 years while at the same time delaying the introduction of cheaper generic versions of their drugs.

The drug industry's main trade group Pharmaceutical Research and Manufacturers of America (PhRMA) has argued that the coalition is misguided because Hatch-Waxman is necessary in order to protect the property rights of the industry. If the industry is not allowed a fair rate of return for its newly discovered drugs, the industry will be forced to cut back substantially on the amount it devotes to research and development of new products.

The financial interest of the states is effected by the soaring Medicaid prescription drug bills, that are covered by the states which are now faced with budget deficits as opposed to the surpluses that they had existed 2 years ago. On the corporate side of the ledger, a company like GM spent $1.3 billion last year on prescription drugs for workers and retirees, up 14 % from the year 2000. The BAM members spent $460 million to buy 17 brand name drugs that will face patent expiration by the year 2004. Next year's health premiums are expected to rise by about 15 % to 20 % for most employees.  

The Chairman of the Federal Trade Commission, Timothy J. Muris, a Bush appointee, told Congress that brand name drug companies were using illegal tactics to prolong the patent lives for prescription drugs. He specifically referred to many of the tactics that we discuss more fully later in this article.

He gave his testimony in a hearing before the Senate Committee on Commerce, Science and Transportation. Several Congressmen including Sen. Charles Scheumer (D.-N.Y.) and John McCain (R.-Ariz.) stated that they would try and pass legislation that would give the consumer swifter access in being able to get generic versions of drugs coming off patent.

The FTC announced a consent agreement with Biovail Corp. of Canada involving its attempts to use ancillary patent filings to delay generic competition to its heart drug Tiazac. Andrx Corp. has been trying since 1998 to market a generic version of Tiazac, but Biovail fought them off with new patent filings. The FTC declared many of Biovail's tactics as illegal. Biovail agreed not to use such additional patent filings to delay the generics in the future. Biovail was also required to surrender part of its exclusive license to the patent in question. The FTC is investigating GlaxoSmithKline's tactics to protect its antidepressant, Paxil.

The Food and Drug Administration has backed off its announcement that it would suspend enforcement of the rule requiring drug companies to perform safety testing of the efficacy and safety of drugs given to children under 14. The FDA had previously announced that it planned to temporarily suspend enforcement of regulations that were promulgated in 1998, that required the drug companies to test their new drugs or even older ones that are widely used by and for children. The announcement was made in the U.S. District Court in Washington in a case involving the enforcement of the regulations.

The FDA had originally asked the court for an 8-week stay in the case, during which time the FDA stated it would ask for a delay of 2-years before it would begin to enforce the regulations which were know as the "pediatric rules". These regulations would require the drug companies to perform studies as to the efficacy and safety of their drugs on children for labeling purposes as requested by the FDA. The FDA has withdrawn its request for the stay, and will now seek public comment about the pediatric rule before revising it.

Under the present law, which is due to expire later this year, a drug company is entitled to an added 6-months of exclusivity to be added on to the 20-year patent life of a drug if the drug company performs studies of the drug's effects on children. Normally the drug companies have been waiting to begin these studies just as the patent is due to expire. In the case of a blockbuster drug the added 6-months of exclusivity for the sale of the drug can mean a windfall in the hundreds of millions of dollars. For the consumer it means having to pay a higher price for the drug for an additional 6-months.

The legal proceedings to stop the FDA from enforcing the regulations were brought by the following groups: The Association of American Physicians and Surgeons, the Competitive Enterprise Institute and Consumer Alert. The FDA brought a motion to dismiss the suit in December that was denied by the judge in the case.

Before the law was passed in 1997 only six labels had been changed to reflect pediatric information, while 29 such labels have been changed as of January of this year. Under the 1997 law the drug companies can pick and choose exactly which drugs they want to perform the studies of the effects of the drugs on children.

Under prescription drug patent law, a pharmaceutical company is entitled to a 6-month exclusivity extension on the life of the 20-year patent protection of the drug for what is known as pediatric testing. Pediatric testing means doing clinical studies of the effect of the drug on children under 14 years of age. The provision in the law allowing this extension is due to expire at the end of this year unless Congress extends the law.

You may wonder what is the big deal about extending the exclusivity of a patent for another 6 months? In the case of Merck & Co.'s cholesterol lowering drug Zocor, we are about to see how valuable this extension can be to the company. The Food and Drug Administration has just extended the exclusivity period for 6-months for Zocor while Merck conducts studies of the effect of the drug on children. This means that no generic versions of the drug can be marketed until after June 2006.

Zocor registered over $6.7 billion in sales for Merck in 2001, and the company said in January that it expected Zocor's sales to total over $7.1 billion in 2002. Thus the drug will add about $3.55 billion in sales for Merck in 2002, and thereby making it one of its top blockbuster sellers for the year. Once again the consumer is stymied. We are not questioning the fact that the drug may prove to be very beneficial to children, but why must the drug companies wait until the patent is due to expire before conducting these studies that may result in some very positive news for treating children as well as adults?

The pediatric testing law that extends the life of patents by 6-months is due to expire at the end of this year. According to the Food and Drug Administration the law is producing important new prescribing information for pediatricians. So far labels have been changed on 14 drugs to reflect the new data. The law was passed in 1997 to give drug companies added inducement to test their drugs on children who would require different dosages for medications than would adults. The FDA had ruled that drug makers had to submit substantial safety and efficacy evidence to label a medicine beneficial for use with children.

The drug industry was hesitant to test their drugs on children since such tests are fraught with extra risk and the fear of adverse publicity in the event that something went wrong. Dianne Murphy, the FDA's associate pediatrics director declared that important dosing and formulation data has resulted from the pediatric extension law. So far 26 drugs have been tested under the program at a cost to the drug companies of anywhere from $200,000 to $3 million.

About 200 more proposals for studies are now pending before the FDA. Opponents of the law have complained that the drug companies have conducted the tests on their blockbuster drugs with the sole purpose of gaining the added 6-months extension to the patent life of the drug.

As an example of this Schering-Plough will be a major beneficiary of the law with its blockbuster drug Claritin since it will add about $975 million in revenue for the company in the added 6 month period of time. Schering-Plough Corp. announced that it had received FDA approval to sell Clarinex, its anti-allergy drug intended to replace its best selling anti-allergy drug Claritin, whose patent is due to expire at the end of the year. Thus Schering is hoping that Clarinex will pick up its sales when Claritin sales start to fall off because of the expiration of its patent. Incidentally it is expected that Schering will have to pay a fine of about $500 million because of safety and lack of oversight of its manufacturing facilities violations.

Schering-Plough's legal actions in connection with its best selling anti-allergy drug Claritin is another example of how a drug company is able to prevent a generic version from coming onto the market when the patent expires in 2002. The General Accounting Office has issued a report stating that the Food and Drug Administration took longer to approve the antihistamine drug Claritin due to concerns about the drug's safety, and about the quality of the information that Schering Plough submitted in connection with getting the drug approved.

The application for Claritin was submitted to the FDA in October 1986, but was not approved until 77 months later. According to the GAO report on average it takes 42.5 months for the FDA to approve a drug. A question had arisen that in some of the early tests it was thought that the drug might cause cancer in some animals. The FDA said it was "uncertain that Claritin met the safety requirements ... and investigated the drug until they were convinced" that there were no grounds to believe that the drug caused cancer.

Merck has gained an added 6-months life to its Pepcid patent as a result of this law. It has been pointed out that none of the testing is being done for drugs once they come off of patent protection. We find it strange indeed that the drug companies wait until the patent is about to expire before doing the testing to gain the pediatric extension to the life of the patent.

The Attorney-General for the state of Texas announced that he would drop the criminal investigation of Barr Labs and Bayer in connection with the payments made by Bayer to Barr, which were made as part of the settlement of the Cipro patent law suit. We discuss this matter more fully later in this article, but since Texas was the lead state in this action, it means that no states will be bringing criminal actions against these two companies for the agreement whereby Barr agreed not to introduce its generic version of Cipro until 2003 in return for getting yearly payments from Bayer.

The importance of patent protection to the drug companies was highlighted when Merck held a meeting for theWall Street drug analysts to discuss the outlook for the company. Three of the company's blockbuster drugs are due to come off patents shortly. Mevacor the anticholesterol drug's patent expires in the middle of December 2001. That will be followed by the expiration of the patents for Prinvil, the heart drug and Prilosec the ulcer drug. Patents for the hypertension drug Vasotec and the ulcer pill Pepcid have recently expired. Sales for Vasotec, Pepcid and Mevacor are expected to reach $2 billion this year, which represents about 10% of Merck's total sales in 2001.

In looking at which drug companies will have the most patented drugs coming off their patent protection in the years 2000 through 2003, statistics from Thomson Financial/Datastream and Deutsche Bank show that AstraZeneca will lose over 55% of its sales based on 1999 sales figures. Schering Plough will lose 48% of its patent protected drug sales from 1999 and Bristol Myers Squibb will lose 35% of its sales.

As we discuss later on in this article both houses of Congress originally passed legislation extending the 6-month extension to patents for pediatric testing. The bill in the House was entitled the " Best Pharmaceutical for Children Act" or HR 2887. The bill passed in the Senate was S.228. A conference committee met to iron out the differences between the bill as passed in each house, and that is what both houses of Congress are voting on.

The Senate has passed the conference committee bill (Best Pharmaceutical for Children Act-S 1789), and the House will take it up next week. The bill would allow generic versions of Bristol-Myer's drug Glucophage for diabetes to launch. This bill would renew the 6-month extension of patents for pediatric data. It would also give FDA discretion to approve ANDAs that do not match the branded label when the sole difference is based on subpopulations (gender, race, adult/pediatric). The new bill would require the drug companies to conduct pediatric studies of their drugs even when the drug company opposes such testing.

As part of this legislation however, Congress is also acting in connection with Bristol's claim in connection with its patent for Glucophage, which the company claims it has exclusive marketing rights for until 2004. Let's take a look to see how this situation arose. Glucophage is a drug that was discovered in Europe in 1929. The drug has been sold in its generic form in Europe for over 20 years.

Bristol won the right to exclusively sell Glucophage in this country for 5-years in 1995, because it sheperded the drug through the FDA in a very complicated procedure. A federal law in 1984 gave drug makers 3-years of exclusive marketing if they were able to add a new indication to a drug's label. Thus if the drug company could show that a drug was effective in treating another condition besides the one called for in the original label, it could gain an additional 3 -years of exclusivity in the marketing process This would be true even though the time had elapsed for the exclusivity for the original condition. The FDA approved Bristol's pediatric labeling for Glucophage in February of 2001, which meant that Glucophage had the sole right to market Glucophage to children till February of 2004.

An FDA rule that was promulagated in 1994 required all drug companies to include on the label whether or not the drug was safe for children to use. Bristol now claims that this rule therefore prohibits the FDA from approving generic versions of Glucophage without such information on its label. Thus Bristol claims that the 1994 rule requires the pediatric label of safety, but the 1984 act prevents the generics from getting it, because Bristol added a new indication to the label which should be good for 3 years more. Even though an insignificant percentage of users of Glucophage are under 18, Bristol claims that no generic versions of the drug can be sold by the generic drug companies until February of 2004. Bristol has threatened that it will take the FDA to court if it rules against their arguement and allows the generics to market their versions of the drug.

Bristol's lobbyists were able to bring the matter before the Congressional committees which were dealing with the 6-month pediatric extension rule. Many of the drug companies are anxious to have the pediatric extension rule passed, since the law which gave rise to the extension is due to expire in December 2001. Bristol has agreed to support a law that would put an end to the 3-year marketing extension for drugs if Congress would exempt Glucophage from the provision of the new law. Incidentally Glucophage has rung up almost $3 billion in sales this year.

The FDA has acknowledged for the first time that a crisis in its finances has led to a slowdown in approval times for new drugs. The Prescription Drug User Fee Act is due to expire in October of 2002 and must be reauthorized by Congress by then. President Bush has still not named a new commissioner for the agency. Some activists feel that some of the money from these fees should be used for safety monitoring purposes and also to monitor drug advertisements.

New York City's Patrolmen's Benevolent Association on behalf of its members has filed several class-action suits against 9 pharmaceutical companies, alleging that brand-name and generic drug companies colluded to inflate prescription drug prices. In their complaint the Association alleged that the collusion between the brand-name and generic drug companies resulted in its members paying artificially high prices for certain medications. The PBA alleges in its suits that the collusion between the patent holding drug companies and the generic drug companies violate the anti-trust laws. These violations result in the consumer having to pay many added millions of dollars for their prescription drugs.

The Prescription Access Litigation Project (PALP), a Boston based group of lawyers and public health advocates, is joining the pending lawsuit filed in the Eastern District of New York, against Bayer Corp. for allegedly restricting generic competitors of its Cipro antibiotic, which is used in the battle against Anthrax. In the original lawsuit that PALP is joining, it is alleged that Bayer's agreement with Barr Labs, Inc. and two other generic drug companies denies consumers access to cheaper versions of Cipro. In an early ruling in the case, the judge ruled that plaintiff's claim is plausible and deserved to go to trial.

In looking at the whole area of high costs for prescription drugs that the consumer ends up paying for, it becomes obvious that one of the contentious areas for this situation is the complicated and often conflicting laws in this country. Mind you we are not saying that the drug companies aren't entitled to a fair profit for their drugs, but sometimes the laws are being used to the detriment of the consumer.

Bristol-Myers Squibb Co. has sought help in the U.S. House of Representatives to try and get a 3-year extension for its patents for Glucophage, a diabetes drug, and BuSpar, an anti-anxiety drug. Thus Bristol tried to use the legislative branch of the government as well as the executive branch to extend the life of its patents for these two drugs.

The hearings in which the matter is being discussed is part of the hearings being held by the Committee on Energy and Commerce, which is chaired by W.J. "Billy" Tauzin (R-La.). The bill is H.R 2887 which is called the "Best Phamaceuticals for Children Act". By a vote of 338-86 the House passed H.R. 2887, and this bill is similar to S.228 which has already been passed by the Senate.

Representative Tauzin, stated the positive results that he feels that have been obtained because of the 6-month automatic extension of patents:

Bristol-Myers Squibb's blockbuster diabetes drug Glucophage was due to come off patent in September 2000. Bristol was able to obtain the 6-month extension on the patent through the pediatric testing extension available to all drug manufacturers. The drug had over $3 billion in sales in 2000. Bristol introduced two new pills in 2000 which were also aimed at the diabetic market. Glucophage XR is a once-a-day version of the twice-a-day Glucophage. Glucovance is a combination of Glucophage with glyburide, another generic diabetes medicaton. Bristol has been actively promoting these two new drugs rather than Glucophage, since pharmacists can not legally switch prescriptions of these 2 new drugs to generic Glucophage.

By May of 2000 the FDA had completed the chemical and manufacturing inspections for about 10 generic versions of Glucophage. The only matter left open was the decision as to what the generic label should contain. All drug labels must contain an indication as to whether or not the drug is safe for children. If the drug is safe for children the dosage information is also contained therein. The generic versions can not include that on their label until 2004 which is when Bristol's pediatric patent for Glucophage would expire.

In the past, the FDA has approved generic drugs simply by excluding the child use information on the generic label. Bristol's attorney has warned the FDA that it would be illegal to approve the generic versions without the proper label. The FDA has delayed handing down its decision for over 2 months on this matter, and there is no indication as to when its decision will be announced. If the decision is unfavorable to Bristol it is most likely that they will appeal such a ruling. Please keep in mind that for every week of delay, Bristol gains about $40 million in sales for Glucophage. Please also keep in mind it is the consumer who in the end is paying for the delay.

This year, it is expected that 30 major branded drugs with total sales of $18 billion will be coming off patents. Last year 34 major branded drugs with total sales of $15 billion came off patents. After this year we will not have this large amount of drugs coming off patent till 2005 when it is expected that 17 drugs will be coming off patent with total sales of $18 billion. In the year 2002, as example, only 24 drugs with total sales of $9 billion are expected to be coming off patents. In the next few weeks there will be patent trials involving 3 blockbuster drugs. The trial involving Merck's once-daily version of Fosamax against Teva Pharmaceuticals has begun in Wilmington, Del. before Judge Joseph J. Farnan Jr.who will preside over the case with no jury. Schering-Plough's Claritin will go before the court around April 2002 and AstraZeneca's Prilosec will go on trial on December 6, 2001.

The U.S. Appeals Court for the District of Columbia Circuit ruled that the FDA had no right last year to allowing marketing approval of Ivac Corp.'s generic version of Bristol-Myers Squibb Co.'s top-selling cancer drug Taxol. The case arose from a three-way dispute between closely held AmericanBioscience Inc. of Santa Mionica, Cal.; New York based Bristol-Myers; and a subsidiary of Miami-based Ivax. American Bioscience had received a patent of a process intended to permit a patient to receive higher doses of Taxol with fewer side effects. Bristol did not immediately list the patent with the FDA. When the FDA allowed Ivax to market its generic version of Taxol, American appealed the decision. The appeals court in ruling in favor of American stated it was unsure as to how or why the FDA did not consider the American patent an impediment to approving Ivax's generic product.

Wall St. Journal reporters Gardiner Harris and Chris Adams point out several twists that the brand-name prescription drug companies use to extend the life of their patents in their article of July 12th, 2001 "Drug Manufacturers Step Up Legal Attacks That Slow Generics".

Even though the "metabolite defense" tactic has not won a single victory in court, it has prolonged the life of several patented drugs as the case winds its way through the system. The metabolite defense, which first surfaced in the mid-1980s, relies on the manufacturers' ability to identify and separately patent chemical compounds created naturally in the body when a drug is digested. With one or more metabolite patents in hand, the company's lawyers sue generic makers, contending that the knock-off companies seek to induce patients to unwittingly produce the metabolite in their bodies."

The article also points out that the median time it takes for the FDA to review a generic drug was 18.2 months, versus the 11.2 months it takes for a brand-name drug to gain approval. Much of this time differential is due to the fact that brand-name drug companies pay a "users fee" that enables the FDA to hire more scientists to review their drugs rather than the generic drugs.

The article also pointed out the fact that the brand-name drug companies file citizens petitions under a 1977 federal regulation that allows anyone to question the safety of a drug. Although the petition will not prevent the FDA from approving a generic drug, it throws another roadblock in the way, thus lengthening the time it takes to get the necessary approval.

When looking at the cost to the consumer of prescription drugs, one of the factors that has to be taken into consideration in this matter is interrelated to our prescription drug patent laws. The battle between the generic drug company Barr Labs and Eli Lilly, over the length of the patent for Prosac is a classic example for us to take a look at, to see that the consumer pays in the end. Lilly used every legal means available to it in order to extend the patent life of Prosac. Lilly could not be blamed for doing this since it took in over $2.6 billion in revenues last year from this drug. The legal battle was a long drawn out affair that was costly to both sides. Lilly is still appealing the case to the U.S. Supreme Court, but in the meanwhile, Barr came out with the 20-mg generic version of the drug on August 2, 2001.

As a matter of fact Barr recently announced that they were taking a .04 cents a share charge to its earnings for the legal fees they incurred in the battle with Lilly. With its victory in the courts, Barr now has a 6-month period of exclusivity to sell the 20 mg version (the dosage that is used in over 90 % of the prescriptions) of the drug. Thus no other generic drug company can come out with their generic 20-mg version of Prosac for 6 months.

Normally a generic version of a drug will sell for a discount of between 60 to 80 % to the branded product. Because of the long and costly legal battle with Lilly, Barr announced that it will sell its generic version of Prosac for only a 30% discount. Thus the consumers of the generic version of Prosac will be paying anywheres from 30 to 60% more than usual for this 6-month period.

We realize that Barr should be rewarded for pursuing the long and costly battle, but wouldn't it be fairer to impose a monetary penalty on the company that lost the lawsuit rather than the consumer? That way Barr would be compensated for their legal expenses by Lilly plus the receipt of a monetay penalty assessed against Lilly for causing the delay. Instead of having one generic company receive a 6-month period of exclusivity, all generic manufacturers of the drug in question could begin competitive pricing immediately. Under this system the consumer would benefit immediately instead of being penalized by the 6-month delay. Lilly has indicated that it will appeal the decision to the U.S. Supreme Court. Lilly has 90 days to appeal the decision and Barr would have 60 days to submit its papers in response.

The chart that follows looks at some of the blockbuster drugs that will be coming off patent in this year:

The European Council passed a resolution favoring a "tiered pricing system" with low prices for poor countries and high prices for the richer countries. It endorsed the right of poor countries to shop for generic drugs even from drug manufacturers who ignore U.S. patent laws. The Council also favors the creation of a worldwide data base to show prices for all drugs throughout the world. The data base would also indicate the reliability of the manufacturers throughout the world. The U.S. opposes such a system and database. Thus although the original proposal specifically was meant to deal with AIDS, we now have a situation where it could cover all therapeutic drugs. The topic is expected to be discussed this weekend at the meeting in Genoa between the 7 wealthiest nations and Russia, and we will follow up on this matter when the news becomes available.

On June 15th, 2001 Merck & Co.'s patent for Mevacor, the cholesterol-lowering drug was due to expire. Merck attempted to extend the life of the patent for 6-months by applying for the pediatric extension that is granted by the FDA's Pediatric Exclusivity Board. When the board refused to grant the pediatric exclusivity for the drug, Merck took the FDA to court and attempted to receive a temporary restraining order forbidding any generic drug company from coming out with a generic version of the drug. Mevacor had over $425 million in sales last year, so it is an important drug for Merck to maintain it's exclusivity for as long as possible. When the court refused to grant the temporary restraining order Merck appealed that decision to the FDA for reconsideration. Merck was able to get a 6-month extension of its patent for Mevacor by using the pediatric extension provision, so that its patent was due to expire in December of 2001.

In examining the question of drug costs to the consumer you can not just look at the cost of the raw materials that go into making any successful prescription drug. For every successful blockbuster drug that evolves from a drug company's research there are countless other drugs that never make it to the consumer's medicine cabinet. To show you just how complicated the whole question of drug pricing is all we need do is look at the Brazilian government's laboratory, Far-Manguinhos.

One of the biggest thorns in the side of the brand name prescription drug companies is due to be removed on January 1st, 2005 when India will start honoring international pharmaceutical patents for the first time since the 1970s. The avowed reason given by India for stopping the recognition of the patent protections was so its vast, poor population could afford to buy many of the expensive prescription drugs. It remains to be seen if India will adhere to its agreement to recognize the patent protections afforded to the various prescription drugs since they do not have a system in place yet to review all the patented drugs seeking validation in the country. Overhanging the whole system of patent protection is the patent law principle known as compulsory licensing. It is an exception that allows the mass production of drugs in times of emergencies such as epidemics so that the patent holder surrenders the patent protection for the duration of the emergency.

Over the next 5 years patents will be expiring on over 30 brand name drugs that have generated over $30 billion in sales to their patent holders. The brand name drug companies are doing everything within their power to extend the life of these patents. In the year 2001 some of the drugs that were due to come off patent protection were Merck's stomach acid relief Pepcid, Eli Lilly & Co.'s antidepressant Prozac (which came off patent on August 2, 2001) and the world's top-selling drug, AstraZeneca PLC's Prilosec.

Novartis and Zenith Goldline (a generic pharmaceutical manufacturer) are in a dispute over the possible differences between a patented brand name drug and the generic version thereof. Novartis, which makes the schizophrenic drug, Clozapine questions the safety of switching patients to the generic version made by Goldine. The Generic Pharmaceutical Association is now pressing the FDA to issue a clear statement re this issue i. e. that generic drugs do not pose any risks to patients. They further claim that the brand-name drug makers are trying to discredit generics via questionable research studies.

A patient advocacy group in Washington has announced that it will use the provisions in the Bayh-Dole Act of 1980, to enable it to make and market a low-cost version of d4T. d4T is an AIDS drug that is sold in the U.S. under the brand name of Zerit by Bristol-Myers. The group known as Consumer Project on Technology will be attempting to utilize the provisions in the law for the first time even though the law has been on the books since 1980.

A provision in the act enables the government to allow another company to market a drug that had been developed with government sponsored research if the drug is not being made available to the public on "reasonable terms". Consumer claims that most of the cost of discovering and developing Zerit was covered under government grants, and that the government holds certain patent rights on the drug. Yale University also holds a patent on Zerit, and the university granted Bristol an exclusive license to sell the drug. Ralph Nader founded Consumer Project in 1995. The petition is expected to be filed with the Health and Human Services in mid-April. The group further stated that if successful in their petition they will file similar petitions for other patented drugs that were discovered under government grants.

In another example of a drug company trying to extend the length of its patent protection the FTC has requested documents from Smith Kline Beecham Plc, the English drug company regarding the patent infringement suit Smith brought against Apotex Corp. in Federal Court in Chicago. Smith makes the anti-depressant Paxil, which had over $2.1 billion in sales last year. The original patent for the drug has expired. Smith Kline has however filed 8 other patents in connection with the original patent shortly before it was due to expire. This may extend the life of the original patent by as much as 30 months, thus costing the consumer millions of dollars.

Patent law is quite clear in that the period of time covered by a patent is 20 years from the time the patent is filed. A proposed revamping calls for a guarantee of 17 years protection after the Patent and Trademark Office grants a patent. In August 1999 legislation was introduced and passed in the House that extended patent protection for an extra 3 years for certain drugs. Representative Ed Bryant (Rep.-Tenn.) and Representative Jim McDermott (Dem.-Wash.) introduced it. In effect this revamping will grant an additional 3 years patent protection for 7 drugs in particular. The drugs that are covered under the pending legislation are:

• Eulexin a prostate cancer drug from Schering-Plough which is used in the treatment for prostate cancer.
• Claritin from Schering-Plough which is the most popular allergy treatment on the market. Schering-Plough has announced that it has received a 6-month extension on the patent life of Claritin, since they will conduct research on how the medicine works on children. The law grants any drug company an additional 6-months of life to it patent if they conduct pediatric trials of the drug. In reality a drug company has an added inducement therefore to initiate pediatric trials of its soon to be expiring patented drug right before the patent is due to expire. As we have written in this article Schering is now proposing to allow Claritin to be sold as an OTC medication.
• Dermatop for itchy skin from Hoechst Marion Roussel
• Penetrex a urinary tract infection drug from Rhone- Poulenc-Rorer
• Cardiogen-82 a diagnostic imaging agent from Bristol Meyer Squibb
• Nimotap a head trauma drug from Bayer A.G.
• Relafen an arthritis drug from Smith Kline Beecham  

The GAO report focused on the 7 drugs that could benefit form the proposed revamping in the patent law. Although it found that the delays were significantly longer than those of comparable drugs the delays were not necessarily caused by the incompetence at the FDA.

The bill's backers claim that the drug companies deserve the extensions because of the length of time that elapsed between the granting of the patent and the approval from the FDA to sell the drug to the public. If the bill stood by itself experts feel that it has little chance of being passed. Frequently however the legislation is attached to another bill that may be extremely popular. Thus the bill to extend the patent protection may slip by unnoticed. In our Helpful Web Sites article we listed the web site for the Center for Responsive Politics. If you check this site out you will see that the drug industry is one of the largest lobbying industry both on a national and local level. There are several generic drug companies waiting for the patent period to end so that they may be able to introduce cheaper versions of these drugs.

These drugs have already received a patent extension under the Hatch-Waxman Act passed in 1984. The Act allowed drug makers to petition for patent extensions of up to 5 years to compensate for regulatory delays. Since these 7 drugs were in the "pipeline" at the time of the passage of the act they were only given 2 years instead of 5-year extensions. 

The rules may be changing somewhat for the drug companies and their ability to protect some of their patent rights abuses. The United States Court of Appeals for the District of Columbia Circuit ruled against Eli Lilly and their world's top selling antidepressant Prozac. As a result of this ruling generic drug companies started selling their generic versions of the drug in August 2001. A drug company will often file numerous patent applications on different aspects of the same drug. They sometimes will vary the formula slightly to extend the patent life of some of their profitable drugs. This was the point in the Prozac ruling where the Appellate Court found that there was a "double patent" on the patent that was due to expire in 2003. The "double patent" issue was the specific point in this case that enabled the generic drug company Barr Laboratories to prevail in this case. Barr began marketing its generic version of Prozac on August 2, 2001.

Is it legal for a drugstore to charge more for medication in the case of individuals with no drug coverage as opposed to giving "bargain prices" to those with insurance, and also keep mum about the differential? If you answered "yes", you are correct. The US Court of Appeals in Atlanta agreed with a district court’s action of tossing out a lawsuit under federal racketeering laws against Rite Aide in which the plaintiff claimed that the price differential amounted to fraud. The judges ruled that this was normal practice in many industries, using airlines, hotels and car dealerships as examples. We leave it to our readers to react to this ruling.

As we discuss later on in this article both houses of Congress originally passed legislation extending the 6-month extension to patents for pediatric testing. The bill in the House was entitled the " Best Pharmaceutical for Children Act" or HR 2887. The bill passed in the Senate was S.228. A conference committee met to iron out the differences between the bill as passed in each house, and that is what both houses of Congress are voting on.

The Senate has passed the conference committee bill (Best Pharmaceutical for Children Act-S 1789), and the House will take it up shortly. The bill would allow generic versions of Bristol-Myer's drug Glucophage for diabetes to launch. This bill would renew the 6-month extension of patents for pediatric data. It would also give FDA discretion to approve ANDAs that do not match the branded label when the sole difference is based on subpopulations (gender, race, and adult/pediatric). The new bill would require the drug companies to conduct pediatric studies of their drugs even when the drug company opposes such testing.

As part of this legislation however, Congress is also acting in connection with Bristol's claim in connection with its patent for Glucophage, which the company claims it has exclusive marketing rights for until 2004. Let's take a look to see how this situation arose. Glucophage is a drug that was discovered in Europe in 1929. The drug has been sold in its generic form in Europe for over 20 years.

Bristol won the right to exclusively sell Glucophage in this country for 5-years in 1995, because it sheperded the drug through the FDA in a very complicated procedure. A federal law in 1984 gave drug makers 3-years of exclusive marketing if they were able to add a new indication to a drug's label. Thus if the drug company could show that a drug was effective in treating another condition besides the one called for in the original label, it could gain an additional 3 -years of exclusivity in the marketing process. This would be true even though the time had elapsed for the exclusivity for the original condition. The FDA approved Bristol's pediatric labeling for Glucophage in February of 2001, which meant that Glucophage had the sole right to market Glucophage to children till February of 2004.

An FDA rule that was promulgated in 1994 required all drug companies to include on the label whether or not the drug was safe for children to use. Bristol now claims that this rule therefore prohibits the FDA from approving generic versions of Glucophage without such information on its label. Thus Bristol claims that the 1994 rule requires the pediatric label of safety, but the 1984 act prevents the generics from getting it, because Bristol added a new indication to the label which should be good for 3 years more. Even though an insignificant percentage of users of Glucophage are under 18, Bristol claims that no generic versions of the drug can be sold by the generic drug companies until February of 2004. Bristol has threatened that it will take the FDA to court if it rules against their argument and allows the generics to market their versions of the drug.

Bristol's lobbyists were able to bring the matter before the Congressional committees which were dealing with the 6-month pediatric extension rule. Many of the drug companies are anxious to have the pediatric extension rule passed, since the law, which gave rise to the extension, was due to expire in December 2001. Bristol has agreed to support a law that would put an end to the 3-year marketing extension for drugs if Congress would exempt Glucophage from the provision of the new law. Incidentally Glucophage has rung up almost $3 billion in sales in 2001. Bristol was unsuccessful in its attempt to get Congress to extend the patent life of Glucophage, and it has also lost out in its legal attempt to have the life of the patent extended through this route also. As a matter of fact the court has sharply admonished Bristol for wasting the court's time through devious attempts to extend the patent life of Glucophage.

The FDA has acknowledged for the first time that a crisis in its finances has led to a slowdown in approval times for new drugs. The Prescription Drug User Fee Act is due to expire in October of 2002 and must be reauthorized by Congress by then. It now appears that the FDA and the drug industry have come to an agreement in regards to reenactment of the PDUF that will be acted upon shortly. For an update on this matter please see the second part of these articles with the link to same set up at the bottom of this article. Some public interest and consumer advocacy groups feel that some of the money from these fees should be used for safety monitoring purposes and also to monitor drug advertisements.

When looking at the cost to the consumer of prescription drugs, one of the factors that has to be taken into consideration in this matter is interrelated to our prescription drug patent laws. Please see out article Patents and Prescription Drugs. It is only because of the ongoing anthrax tragedy taking place throughout the world that a settlement agreement between Barr Labs and Bayer A.G., the German chemical and pharmaceutical company has come into the limelight. Bayer holds the patent rights to Cipro, which is the best known drug today for treating anthrax.

At one point in the negotiating with Bayer over Cipro, Tommy G. Thompson, secretary of health and human services, threatened to override Bayer's patent for Cipro because of the critical situation that had arisen regarding the anthrax matter. Many of the developing nations argue that this is no different then their point when combating such diseases as AIDs wherein these poorer countries can not afford the prices being charged by the patent-holding pharmaceutical companies for their life saving AIDs cocktails.

Back in 1997 Barr and Bayer had a legal tussle over Cipro, with Barr claiming that it was entitled to come out with the generic version of the drug back then. As a matter of fact the FDA had even approved Barr's plant to produce the generic version of the drug. Before the matter was adjudicated the two companies settled the matter. Under the settlement agreement Bayer would make yearly payments of between $25 million to $30 million if Barr did not produce a generic version of the drug until December 2003.

In other words Barr was paid not to produce the drug. It was further agreed to by both parties that Barr would have generic exclusivity to produce the drug 6-months before the patent expired in 2003. Starting with the year 1998 Bayer has made these yearly payments to Barr. The companies claim that the matter was settled because neither side could be sure that it would prevail when the case would have been ultimately adjudicated.

With the anthrax infection in the news this agreement has come into the limelight. Bayer had been charging $4.67 a tablet in wholesale transactions with pharmacies. The agreement reached between Tommy G. Thompson, the secretary of health and human services and Bayer called for a price of .95 per tablet. We realize that the government is buying hundreds of millions of the tablets, so certainly this should account for a good proportion of the difference in pricing, but please keep in mind that Cipro was Bayer's best selling drug. It is one of the leading anti-biotics on the market with over $1.2 billion in sales for the company in 2000.

Barr's chairman and chief executive officer, Bruce L. Downey stated that his company could sell generic Cipro for less than $1 if it did not have to pay royalties to Bayer. Ranbaxy, Inc., a generic-drug maker in Princeton, N.J., has offered to sell the pills for about 30 cents a pill. Two other U.S. generic-drug makers who did not wish to be identified said they could sell the pill for 40 cents in the U.S. and turn a profit.

It is not only a matter of the cost of the tablets that arouses our curiosity. How do patent holding drug companies account for these payments to the generic drug companies on their balance sheets? Is this cost included in the research and development cost area, or is it contained elsewhere in the balance sheet? We point out other similar type payments in the industry later on in this article, so this is not an isolated incident that we are writing about. The Senate is now looking into this matter and we will continue to follow up on this matter.

The Senate Judiciary Committee, chaired by Sen. Patrick J. Leahy (D-Vt) unanimously approved the Drug Competition Act of 2001 (S 754). The bill which was introduced in the Senate on April 6, 2001 was sponsored by Sen. Leahy, Sen. Herb Kohl (D-Wis), Sen.Charles Schumer (D-NY) and Sen. Richard Durbin (D-Ill). The bill is aimed at bringing to light agreements between patent holding brand-name drug companies and generic drug companies that delay the introduction of the generic drug for public consumption.

Sen Leahy said the bill would give the FTC and the Justice Department access to information on "secret deals" between drug companies aimed at delaying competition between brand name and generic drugs. The problem with this statement is that the deals are often not "secret deals", but are often settlement agreements arrived at between the parties that are approved by the courts.

FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "How to Select a Nursing Home"

In case you want to find any patents yourself, they can be viewed on the Web at http://www.uspto.gov The Web site also contains a number of links to sites offering help to inventors interested in applying for patents. It also has a full listing of all patents granted by the Patent and Trademark Office. The phone number for the Patent Office is 800 786 9199.

By Allan Rubin and Harold Rubin, MS, ABD, CRC, Guest Lecturer
Updated February 26, 2003

http://www.therubins.com

To e-mail: hrubin12@nyc.rr.com or rubin@brainlink.com

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