Four Three Defendants Settle with Schering -- on Generic Versions of Clarinex® RediTabs -- But That's Not "Good News"

Of the fifteen separate generic pharma manufacturing enterprises sued by Schering in 2007 (in an effort by Schering to extend the life of the Clarinex^® patents, and prevent generic entries to the United States markets), four -- Perrigo, Dr. Reddy Labs, Ranaxby and now Lupin, have settled, agreeing not to launch a generic before mid-2012. But that still leaves Orchid (an Indian company), and ten others, including Sandoz, in a position to begin an "at risk" launch of Descloratadine [or, Clarinex^®-equivalent] product, at any time in early 2009. . . .

You'll likely recall that back in late-July, Sandoz answered Schering-Plough's patent lawsuit titled In Re Descloratadine Patent Litigation (MDL No. 1851 Civil Action No. 07-3930), by asserting, in a motion for declaratory judgment, that both of the principal patents Schering relies upon in manufacturing and marketing the Clarinex^® products (the so-called '463 patent, and the '274 patent) are invalid -- and thus unenforceable, at least as to Sandoz -- chiefly for procedural defects in the way Schering handled its FDA Orange Book notices, and then subsequently failed to include some of the materials listed in the Orange Book submissions -- in its infringement complaint against Sandoz.

The Sandoz answer also asserts that the so-called '274 patent held by Schering is generally invalid, and thus presents no barrier to Sandoz's planned generic Descloratadine [or, Clarinex^®-equivalent] product.

There has been no ruling on this motion, yet. So, stay tuned.

[But, as I earlier wrote: ". . . .the projected 10 percent revenue growth, on over $800 million in Schering sales, from Clarinex, in 2008 looks to be in fairly serious peril, from where I sit. The central question, then, is whether Orchid (and the others) will be willing to go forward with "at risk" generic launches (and risk owing additional damages, if all the counter-claims are found without merit). If a good portion of $800 million is to be gained, though, I think it likely at least some of them will launch. . . ."]

Importantly, I also do want to highlight the larger procedural "kabuki theatre" in play here, using this Clarinex-patents lawsuit offensive -- as an example. Often, large branded-drug pharma makers will bring these "strike suits" -- toward the end of the life of a given patent, against a vast array of companies, sometimes only suspected of being capable of producing a generic rival to the branded drug -- in large part, simply to delay the start-date for generic entry, by legitimate generic manufacturers.

Here, because some of the parties Schering filed suit against in 2007 (most-notably, Perrigo) did not file papers to rebut the legally-created presumption that Schering's patents are valid, Schering is entitled to a judgment preventing Perrigo from entering the US market before July 1, 2012. That is likely of no consequence to Perrigo, as it may well have had no plans to make a generic Clarinex^® Redi-Tab. Perhaps, it couldn't care less.

What it also does, though, is serve as a threat to others, by suggesting that the generic makers might be liable for triple damages, if the infringment of the patents is found to be "willful". In this way, Schering can use the federal courts -- to keep lower-priced, but entirely safe and equivalent, chemical compounds, off the market (for a while).

For its part, Orchid has suggested in earlier court filings that it might go forward, calling Schering's "bluff", by launching a generic descloratadine compound "at risk" -- at risk of high damages. But Orchid would then gain the ever-valuable "first to market" lead, on a widely-prescribed, but now lower-price tablet. Volume, volume, volume.

Sandoz, on the other hand, has chosen a "frontal assault" strategy -- in answer to Schering's suit -- by asserting that the Schering patents are generally invalid, due to procedural defects in Schering's filings. And so, if Orchid launches, or Sandoz were to prevail, in 2009, the American (price-sensitive) consumer of Clarinex^® would be the most obvious beneficiary.

Alternatively, this may all be summed up in (albeit somewhat derivatively) the form of a single question: When is it time to say Schering has had a "long-enough" monopoly-run -- in the highly-lucrative United States Clarinex^® market? Fifteen years? Twenty? When?

Okay. That's three questions, I guess -- but you get the point.

[Editorial Note: A comment, below, was removed at the the request of its poster.]