SmithKline Embroiled In Generic-Drug Dispute

Sales of the third-largest-selling antidepressant in the United States will surely fall when generic versions are allowed onto pharmacy shelves, and SmithKline Beecham (SKB), the manufacturer of paroxetine (Paxil), is trying to prevent the inevitable.

Late last month, the U.S. Federal Trade Commission (FTC) acknowledged that it is investigating the company’s actions, questioning whether it has possibly gone too far to protect its product’s market share.

This new skirmish between a pharmaceutical giant and the government is the latest in a growing series of investigations by government regulators and filings of lawsuits by both regulators and competitors, all of which surround efforts by manufacturers of brand-name psychotropic medications to protect their market share (Psychiatric News, December 15, 2000).

With numerous antidepressant, antianxiety, and antipsychotic medications facing expiration of their patents in the next few years, and therefore loss of market exclusivity for their active ingredients, generic drug makers are scrambling to rush to market less-expensive generic versions of the tried-and-true brand-name products. And brand-name manufacturers are doing everything they can to stop the eventual gutting of their sales base.

The latest example was revealed in documents filed last month in U.S. District Court in Chicago by generic drug manufacturer Apotex Corporation. The largest pharmaceutical company in Canada, Apotex has been attempting to market a paroxetine generic in the U.S. since the middle of 1998. Apotex spokespersons say its product would save consumers 35 percent, costing an average of $1.52 a day, rather than the $2.34 average daily cost of SKB’s Paxil brand.

Paxil still enjoys “market exclusivity” in the U.S., the Food and Drug Administration’s (FDA) term for allowing only one drug company to sell a specific active ingredient for a specified period of time. Exclusivity is meant to allow pharmaceutical firms to recoup the large investment of time and research and development costs needed to bring a new drug to the market. According to the Pharmaceutical Research Manufacturers Association of America, the average new drug approved in 2000 required 17 years of research and development and cost more than $700 million to proceed from issuance of a patent to availability in the pharmacy.

The main patent protecting paroxetine, which was approved for sale in the U.S. in December 1992, expires in December 2006. SKB, however, has been submitting additional patents, based on slightly different forms or uses of the active ingredient. Paroxetine now has 12 patents listed, with the latest expiring on April 23, 2019. Protecting the drug’s exclusivity is very important to SKB, since Paxil recorded sales of just over $1.4 billion in the U.S. last year, putting it in third place among antidepressants behind Eli Lilly’s Prozac and Pfizer’s Zoloft, numbers one and two, respectively.

Apotex claims its version of paroxetine is slightly different from the form patented by SKB and stated in court filings that it is “certain that we are not infringing on that [SKB’s] patent.” Apotex filed the suit against SKB late last fall, claiming that the “patent games” were simply a “veiled effort to illegally block sales of a generic version of Paxil.”

The FTC’s investigation was disclosed in documents filed by Apotex in connection with its suit. FTC spokespersons confirmed that the agency is conducting a “preliminary inquiry.” They would not, however, comment on any details surrounding the investigation.

A spokesperson for SKB acknowledged both the suit and the FTC investigation, saying that the company had certainly not broken any laws and had, in fact, “simply taken legal measures to protect its rights to Paxil, which it believes is covered by valid patents. SmithKline Beecham has been asked to voluntarily supply documents to the FTC, and the company is cooperating fully.”

Incidentally, the FTC granted its final approval for the pending merger of SKB with fellow U.K. pharmaceutical heavyweight GlaxoWellcome last November. Final clearance from the U.K. High Court was received the last week in December. The newly combined company now operates under the name GlaxoSmithKline. With a combined research and development budget of 2.3 billion pounds sterling per year (approximately $3.4 billion U.S.) the new pharmaceutical giant is expected to continue its commitment to developing medications to treat disorders of the central nervous system, including psychiatric disorders. ▪