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Generic drug's path to retail market often long and contentious

WASHINGTON—For consumers and health plans waiting for a slew of cheaper generic drugs to hit the market, the tale of Flonase is worth noting.

Even though GlaxoSmithKline's patent for the allergy medicine expired in May 2004, the cheaper generic version didn't hit the market until last month.

The delay was the result of a series of aggressive administrative and legal maneuvers by GlaxoSmithKline that thwarted the speedy entrance of the generic. After a federal judge in Baltimore rebuffed Glaxo's final legal challenge on March 6, the generic version by Roxane Laboratories hit store shelves.

The generic sells for $61.99 at Walgreens.com, while Flonase costs $81.99. At CVS.com, the generic is $68.59 vs. $85.29 for Flonase.

For consumers, the case shows that good things eventually come to those who wait. But it also shows that a generic drug's path to the retail market is often long and contentious. The price and market share for a brand-name drug fall dramatically when a generic alternative becomes available, so former patent holders do all they can to stave off the competition.

According to Bain & Co., an international consulting firm, patents are set to expire on 75 brand-name drugs over the next two years and on an unprecedented 252 by 2014. A study by the Pharmaceutical Care Management Association released on April 18 found consumers and health plans could save more than $26.4 billion over the next five years by using cheaper generic versions of just 14 brand-name drugs scheduled to lose their patent protection between now and 2009.

But protracted legal battles are inevitable, experts say, which means consumers will face many delays before they can save on the coming wave of generic alternatives.

"Big, big fights are ahead," said Sid Wolfe, director of the Health Research Group at Public Citizen, a consumer watchdog agency. "The brand-name companies will do everything possible to prolong the day when the generic drugs become available. Buying an extra six months, two years or three years for a big-selling drug is going to mean a difference of tens or hundreds of millions of dollars."

Equally unsettling for consumers is that drug companies are again paying generic companies to drop patent challenges that could make copycat drugs available before the patents on the original drugs expire. The practice has increased because several federal court decisions reversed earlier determinations that such deals were an illegal restraint of trade, Jon Leibowitz of the Federal Trade Commission said this week.

Consumers saved about $360 million a year when a patent challenge made a generic version of the heartburn medication Prilosec available more than 15 years before the last of its patents expired. Those kinds of savings will be harder to come by if generic companies stop challenging drug patents in exchange for payments from brand-name drug companies.

Experts also worry that a Food and Drug Administration backlog of 800 applications for generic drug approvals could further slow access to cheaper drugs.

Dr. Scott Gottlieb, the FDA's deputy commissioner for medical and scientific affairs, told generic-drug executives in February that some applications aren't reviewed until the statutory review time of 180 days is nearly reached.

Staff shortages are part of the problem, but the FDA also blames generic firms for submitting faulty applications.

In 2005, 93 percent of generic applications to the FDA weren't approved on first review, and 59 percent failed on second review. To address the backlog, the FDA is prioritizing applications by patent expiration dates, reviewing some applications in groups and making more information for applicants available online.

Some have suggested that generic-drug companies help fund the review process the same way brand-name drug companies provide "user fees" to help pay for the agency's new-drug reviews. The Generic Pharmaceutical Association has considered the proposal, but argues that legal battles over intellectual property issues would still slow the process even if more agency staffers were added.

Despite the delays, the savings from generics are worth waiting for. Generics will help hold down monthly insurance premiums, out-of-pocket drug costs and drug spending for Medicare and Medicaid. In fact, Medicare alone could save $8.2 billion in 2007 just by prescribing cheaper generic statins to reduce cholesterol, according to a study by the Consumers Union.

And because older medications have established track records, their generic substitutes pose little risk of unexpected health complications.

"Those things still could happen, but the odds of an older drug going off patent having one of these problems is much lower. The longer a drug has been on the market, the less likelihood of safety surprises," Wolfe said.

Health plans and pharmacy benefit managers, the companies that manage drug coverage for large employers, are already preparing to take advantage of the savings opportunities.

Anticipating the expiration of one patent, Express Scripts, one of the nation's largest pharmacy benefit companies, recommended in 2005 that drug plans under its management make the cholesterol-lowering statin, Zocor, their preferred medication instead of the top-selling Lipitor.

"Virtually all of our clients have accepted our recommendations," said Steve Littlejohn, a spokesman for Express Scripts.

The move made sense. Eighty percent of Express Script's plan members who take Lipitor were taking the low-dosage formula, which is equal in strength to Zocor, Littlejohn said. In addition, Zocor is scheduled to lose its patent protection in June 2006, so most patients taking the drug can be switched to a cheaper generic version when it becomes available. Lipitor's patent doesn't expire until 2010.

"In a sense what we're doing is helping people get into position to immediately take advantage of the savings" when Zocor's generic version becomes available, Littlejohn said. "Our basic mission is to make the use of prescription drugs safer and more affordable, and this is a tremendous opportunity to get that done for clients and patients."

Kaiser Permanente was able to switch more than 75 percent of its patients who took cholesterol-lowering statins to the generic version of Mevacor when it became the first generic statin several years ago, said Dr. Sharon Levine, the associate executive director of Kaiser Permanante's northern California region.

"That represented a tremendous (amount of) dollars saved that we were able to put to other uses," Levine said.

Most statins cost about $75 to $150 a month. Lovastatin, the generic version of Mevacor, costs about $1 a day, according to a Consumers Union study.

"We scrutinize the (drug) pipeline furiously to look for those value opportunities," Levine said.

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(c) 2006, Knight Ridder/Tribune Information Services.

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