The Pharmaceutical Journal Vol 267 No 7176 p775-776
1 December 2001

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Is patent extension good for patients?

This week sees the start of AstraZeneca's court battle in the United States to protect its patent on omeprazole. Clare Bellingham investigates this case, and other issues surrounding patent expiries

Over the next few years, patents on several blockbuster drugs are scheduled to run out. These include omeprazole (Losec), loratadine (Clarityn), doxazosin (Cardura), simvastatin (Zocor) and lisinopril (Zestril).

Patents provide one method of protecting profits so it is hardly surprising that pharmaceutical companies fight hard to extend them. Patents typically last for 20 years and pharmaceutical companies can expect to lose significant sums when they expire. So how do they deal with this potential fall in revenue?

Jennifer Coe, strategy director for Datamonitor Healthcare, an independent market analysis company, says that pharmaceutical companies use various patent protection strategies, particularly if they do not have other products in the pipeline to replace lost sales. However, she would generally advocate investment rather than patent protection strategies. She explains that there are five major types of strategy: maximising regulatory benefits, adding value to products, defending patent rights, competing post-patent expiry and conducting lifecycle management (see below).

In addition, market dynamics at the time of the patent expiry is an important factor. For example, when an innovative treatment threatens sales of market leaders, such as the case of angiotensin converting enzyme (ACE) inhibitors being threatened by angiotensin II receptor antagonists, a company might chose not to spend large amounts of money protecting its patent but instead invest in marketing of another drug.

Other approaches companies might take are to gain new products to fill gaps in their portfolios, particularly with drugs that complement existing drugs they market. Otherwise, companies might be forced into mergers. "Although this rarely happens in response to the loss of one patent, it could be argued that in the recent merger to form AstraZeneca, the imminent loss of the patent on Losec was a driver," Jennifer Coe said. The loss of patents on a number of blockbuster drugs in the next few years might lead to further mergers but it is not necessarily the best way for companies to grow, she adds. "I suggest that companies should form alliances to compete with the mega-pharmaceutical companies." This would involve companies identifying and concentrating on their core competencies and sharing sales forces and expertise.

The methods described above show what companies can do to protect patents. But do companies resort to other, perhaps more controversial, methods of protecting profits when a patent is nearing its end?

The recent announcement of the withdrawal of loratadine (Clarityn) this month, before its patent expiry next year, has raised some eyebrows. The move follows the introduction of desloratadine (Neoclarityn). Was it an engineered decision in order to transfer patients on to desloratadine before the introduction of a generic loratadine to the market, perhaps resulting in fewer patients being transferred to the generic form when it is introduced? At the time of the announcement, a spokeswoman for Schering Plough denied that loratadine's patent expiry was the reason for its withdrawal although conceded "it would be ridiculous to say that it was not a consideration". She said that the reason for the withdrawal was that desloratadine is a better product and that it does not make commercial sense to market both products.

But what about the impact on patients who have been stabilised on loratadine for years? It means that patients no longer have access to established drugs. Anthony Cox, senior pharmacist, City Hospital, Birmingham, comments: "The practice of enforced product switches by the cessation of a product still under patent reduces patient choice. Manufacturers have some moral obligation to continue making drugs, or allow others to do so, that patients use and are happy with. Also, the alternative drug offered may be a drug with black triangle status, subject to intense surveillance for adverse effects."

Loratadine is not a lone example. Pfizer recently announced that it is to withdraw the 4mg strength of doxazosin (Cardura). Its patent is also about to run out. Are the two events linked?

A spokeswoman for Pfizer said on 20 November that the main reason for the withdrawal is that it does not make business sense or sense for patients to market both a standard and a modified release (XL) formulation. "The XL formulation is a better and cheaper drug. It is better titrated than the standard release preparation." In addition, there had been some confusion over people who had been prescribed the XL formulation being supplied the standard release preparation, she said. However, the 1mg and 2mg standard release products will remain available in cases where the XL formulation is not appropriate.

The timing of the withdrawal of these drugs means that there will be a gap of some months between the branded product being withdrawn and the generic version entering the market. Patients will be left with no choice but to change to an alternative and how many will then be willing to change drugs again shortly afterwards and move to the generic? How will pharmacists and doctors be able to explain the necessity of these changes to patients? It is certain to cause inconvenience for patients and reduce confidence in health professionals. And if a large number of patients are changed on to an alternative drug, will the demand for a generic fall and consequently discourage some, if not all, generic companies from launching products? Without a large sales force and marketing campaign, is it possible for generic companies to persuade prescribers to move patients on to generic products? Certainly price is a large factor, but patient convenience will play a part and a large-scale switch to generic is less likely than is the case had the patented products not been withdrawn.

This has the potential to impact on drug costs, keeping them higher than might have been expected if the large majority of patients were switched to a generic. Is the Department of Health going to tackle this problem? Commenting specifically on the loratadine case, a spokesman for the Department of Health said on 21 November that Schering Plough had exercised its commercial right to change its product profile. There will be no immediate increase in cost because Clarityn and Neoclarityn cost the same, he said. However, the Department will be keeping the situation under review, since generic versions of loratadine are expected to be marketed at the end of next year when the drug's patent expires.

Third world issues

Meanwhile, Bayer has faced threats to its patent on ciprofloxacin (Ciproxin) not from other pharmaceutical manufacturers but from governments. The need to stock-pile large quantities of ciprofloxacin in case of widespread anthrax bioterrorist attack has led to huge demands for the drug being placed on Bayer.

The company responded by increasing production of the drug (PJ, 20 October, p537) but this did not stop the Canadian government authorising Apotex, a generic manufacturer, to produce a generic version of ciprofloxacin before Bayer's patent on the drug has expired. After threats of legal action, the Canadian government was forced to back down and made an agreement with Bayer that it would deliver one million tablets within 48 hours of a request being made. The United States government has gained an agreement with Bayer that it will supply a large quantity of ciprofloxacin at a highly discounted price.

The situation was complicated for the US government by the fact that it has been a strong supporter of patent protection within the pharmaceutical industry, for example, in recent moves by developing countries to produce generic version of patented drugs to treat HIV infection. These moves to over-ride Bayer's patent on ciprofloxacin have brought accusations of hypocrisy from aid agencies which question why the potential threat of an anthrax outbreak is more of a national emergency than the AIDS epidemic in Africa.

Patents are protected under the World Trade Organization's Agreement on Trade-Related Intellectual Property Rights (TRIPS). The World Trade Organization announced on 14 November an amendment to the TRIPS agreement that allows countries to over-ride international patents in response to national emergencies. In addition, individual countries can now decide what constitutes such an emergency.

Keeping the bargain

Pharmaceutical manufacturers argue that patents are necessary in order to allow them sufficient income to invest in research and development. When a patent on a blockbuster drug expires, it does put a large financial strain on the pharmaceutical company concerned. This often results in job losses and can even lead to the company folding or merging with another company. It is easy to say that pharmaceutical companies are giants that can afford it but this is not necessarily the case. On the other side of the coin, how will generic companies survive if patents are extended continually? But most important is the impact on patients. If moves to protect patents and market share are detrimental for patients in terms of safety, choice and confidence in the health service, can they really be justified?

A patent is a state enforced monopoly that gives the holder exclusive rights to profits from the drug for many years. When pharmaceutical companies obtain a patent, they expect others to respect it. By fighting for additional rights at the end of a patent's life, and undertaking controversial means of protecting their market share, are patent holders failing to keep their side of the bargain?