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US states file lawsuit against Bristol-Myers Squibb
SCIENCE AND MEDICINE FEATURE
US states file lawsuit against Bristol-Myers Squibb ttorney Generals from more than 30 US states and territories have filed a lawsuit against the pharmaceutical giant Bristol-Myers Squibb, charging that the company filed fraudulent patent applications and numerous frivolous lawsuits in order to keep low-price generic versions of their blockbuster cancer drug, Taxol, from reaching the US market. In papers filed in the US District Court in Washington, DC on June 4, the plaintiffs charge that the company’s allegedly illegal efforts successfully delayed the approval of generic versions of the drug for several years, forcing patients, hospitals, and insurers to pay millions of dollars more than they would have had the cheaper generics been available. “Such manipulations are illegal and must be stopped”, said Betty Montgomery, attorney general of Ohio, the lead state in the suit. In the USA, a course of treatment with Taxol costs from US$6000 to $10 000, while treatment with generic versions of the drug costs about a third less. The charges made by the attorneys general are similar to those made in a class-action suit filed last year by Miami, Florida attorney Michael Criden on the behalf of private payers. Should the plaintiffs win, Bristol-Myers Squibb could face billions of dollars of damages, experts say. In a statement issued in response to the new lawsuit Bristol-Myers Squibb spokesman Bob Laverty said: “The only news in this lawsuit is that the states have chosen to enter late in the litigation . . . We will continue to deal with the issues raised by this new suit as we have been doing with other litigation related to these matters.” The active ingredient in Taxol, paclitaxel, which was originally isolated from the bark of the Pacific yew tree, was discovered, developed, and tested by researchers funded by the US National Cancer Institute at a cost of $32 million, according to the lawsuit. In 1992, the US government gave Bristol-Myers Squibb 5 years of exclusive marketing rights for the drug in return for a commitment by the company to obtain the necessary regulatory approvals and bring a paclitaxel-based drug to market. Taxol is used primarily as a treatment for breast and ovarian cancer. The technology transfer deal was controversial but the company
A
2092
assured Congress in a statement prepared for a 1993 committee hearing that “near-term generic competition for Taxol was a certainty because Taxol is not a patented product”. However, novel methods for administering the drug could be patented and the company was at the same time moving to obtain patents
Generic paclitaxel
on methods of drug delivery that it would later use to thwart efforts by generic drug makers to bring competing products to market, the lawsuit charges. In these patent applications, the company claimed to have developed a way to administer Taxol over 3 h instead of 24 h, but in its application the company did not disclose to the US Patent and Trademark Office that other investigators had published papers describing the 3 h administration method before, a fact that would have invalidated Bristol-Myers Squibb’s claim, the lawsuit alleges. The company successfully obtained the patents by “knowingly and wilfully making numerous material fraudulent omissions and misrepresentations” to the patent office “with the clear intent to deceive the patent examiner”, the lawsuit charges. Upon obtaining the patents, the company then filed lawsuits against numerous generic drug makers, alleging patent infringement, blocking their attempts to obtain approval for their generic versions of paclitaxel from the US Food and Drug Administration (FDA). “Bristol knew that these patents were invalid, had been procured by inequitable conduct and fraud, and could not form a reasonable basis for patent infringement action”, the law-
suit alleges, but the strategy worked because simply by filing the patent infringement action, Bristol-Myers Squibb was able to block FDA approval of the generic products for 30 months, unless the litigation was resolved sooner. “Had Bristol not obtained this additional market exclusivity, these generic competitors intended and were prepared to enter the market upon receipt of FDA approval”, the lawsuit says. The generic companies fought back and in March 2000 the court ruled against Bristol-Myers Squibb’s claim. However, the company continued to file additional suits against generic makers—suits, which, the plaintiffs maintain, were also solely intended to slow approval of generic Taxol. The plaintiffs maintain that when these tactics failed, Bristol-Myers Squibb then arranged to have American BioScience, Inc, a pharmaceutical company in Santa Monica, California, file a lawsuit against Bristol-Myers Squibb, charging the company had infringed on a patent that American BioScience held concerning dosage forms. The same day the lawsuit was filed, the two companies reached an agreement that led the court to order Bristol-Myers Squibb to list the patent in the FDA’s “Approved Therapeutic Equivalence Evaluations”, known as the “Orange Book”. The plaintiffs allege that both companies knew that the patent claims were invalid but had staged the “sham court action” so that the court would order Bristol-Myers Squibb to list the invalid patent, which could then be used by the company to block FDA approval of a generic Taxol. The effect of these various actions, the plaintiffs allege, allowed BristolMyers Squibb to maintain its monopoly on paclitaxel until December, 2000, and to limit its generic competition to just one company until April, 2001, adding millions to its revenues. Without generic competition, Bristol-Myers Squibb earned nearly $1 billion in revenues in 2000 from its sales of Taxol, according to figures provided by the New York State Attorney’s Office, but in 2001 when a generic version of the drug finally became available, the company’s sales revenues from Taxol dropped by nearly half to $545 million. Michael McCarthy
THE LANCET • Vol 359 • June 15, 2002 • www.thelancet.com
For personal use. Only reproduce with permission from The Lancet Publishing Group.
US states file lawsuit against Bristol-Myers Squibb ttorney Generals from more than 30 US states and territories have filed a lawsuit against the pharmaceutical giant Bristol-Myers Squibb, charging that the company filed fraudulent patent applications and numerous frivolous lawsuits in order to keep low-price generic versions of their blockbuster cancer drug, Taxol, from reaching the US market. In papers filed in the US District Court in Washington, DC on June 4, the plaintiffs charge that the company’s allegedly illegal efforts successfully delayed the approval of generic versions of the drug for several years, forcing patients, hospitals, and insurers to pay millions of dollars more than they would have had the cheaper generics been available. “Such manipulations are illegal and must be stopped”, said Betty Montgomery, attorney general of Ohio, the lead state in the suit. In the USA, a course of treatment with Taxol costs from US$6000 to $10 000, while treatment with generic versions of the drug costs about a third less. The charges made by the attorneys general are similar to those made in a class-action suit filed last year by Miami, Florida attorney Michael Criden on the behalf of private payers. Should the plaintiffs win, Bristol-Myers Squibb could face billions of dollars of damages, experts say. In a statement issued in response to the new lawsuit Bristol-Myers Squibb spokesman Bob Laverty said: “The only news in this lawsuit is that the states have chosen to enter late in the litigation . . . We will continue to deal with the issues raised by this new suit as we have been doing with other litigation related to these matters.” The active ingredient in Taxol, paclitaxel, which was originally isolated from the bark of the Pacific yew tree, was discovered, developed, and tested by researchers funded by the US National Cancer Institute at a cost of $32 million, according to the lawsuit. In 1992, the US government gave Bristol-Myers Squibb 5 years of exclusive marketing rights for the drug in return for a commitment by the company to obtain the necessary regulatory approvals and bring a paclitaxel-based drug to market. Taxol is used primarily as a treatment for breast and ovarian cancer. The technology transfer deal was controversial but the company
A
2092
assured Congress in a statement prepared for a 1993 committee hearing that “near-term generic competition for Taxol was a certainty because Taxol is not a patented product”. However, novel methods for administering the drug could be patented and the company was at the same time moving to obtain patents
Generic paclitaxel
on methods of drug delivery that it would later use to thwart efforts by generic drug makers to bring competing products to market, the lawsuit charges. In these patent applications, the company claimed to have developed a way to administer Taxol over 3 h instead of 24 h, but in its application the company did not disclose to the US Patent and Trademark Office that other investigators had published papers describing the 3 h administration method before, a fact that would have invalidated Bristol-Myers Squibb’s claim, the lawsuit alleges. The company successfully obtained the patents by “knowingly and wilfully making numerous material fraudulent omissions and misrepresentations” to the patent office “with the clear intent to deceive the patent examiner”, the lawsuit charges. Upon obtaining the patents, the company then filed lawsuits against numerous generic drug makers, alleging patent infringement, blocking their attempts to obtain approval for their generic versions of paclitaxel from the US Food and Drug Administration (FDA). “Bristol knew that these patents were invalid, had been procured by inequitable conduct and fraud, and could not form a reasonable basis for patent infringement action”, the law-
suit alleges, but the strategy worked because simply by filing the patent infringement action, Bristol-Myers Squibb was able to block FDA approval of the generic products for 30 months, unless the litigation was resolved sooner. “Had Bristol not obtained this additional market exclusivity, these generic competitors intended and were prepared to enter the market upon receipt of FDA approval”, the lawsuit says. The generic companies fought back and in March 2000 the court ruled against Bristol-Myers Squibb’s claim. However, the company continued to file additional suits against generic makers—suits, which, the plaintiffs maintain, were also solely intended to slow approval of generic Taxol. The plaintiffs maintain that when these tactics failed, Bristol-Myers Squibb then arranged to have American BioScience, Inc, a pharmaceutical company in Santa Monica, California, file a lawsuit against Bristol-Myers Squibb, charging the company had infringed on a patent that American BioScience held concerning dosage forms. The same day the lawsuit was filed, the two companies reached an agreement that led the court to order Bristol-Myers Squibb to list the patent in the FDA’s “Approved Therapeutic Equivalence Evaluations”, known as the “Orange Book”. The plaintiffs allege that both companies knew that the patent claims were invalid but had staged the “sham court action” so that the court would order Bristol-Myers Squibb to list the invalid patent, which could then be used by the company to block FDA approval of a generic Taxol. The effect of these various actions, the plaintiffs allege, allowed BristolMyers Squibb to maintain its monopoly on paclitaxel until December, 2000, and to limit its generic competition to just one company until April, 2001, adding millions to its revenues. Without generic competition, Bristol-Myers Squibb earned nearly $1 billion in revenues in 2000 from its sales of Taxol, according to figures provided by the New York State Attorney’s Office, but in 2001 when a generic version of the drug finally became available, the company’s sales revenues from Taxol dropped by nearly half to $545 million. Michael McCarthy
THE LANCET • Vol 359 • June 15, 2002 • www.thelancet.com
For personal use. Only reproduce with permission from The Lancet Publishing Group.