Friday, November 19, 2010

India's Sun Pharma Clears FDA On Generic Clarinex® -- But No Sales Until Mid-2012

About a year and a half ago, legacy Schering-Plough entered pay-to-delay deals with about 15 generic manufacturers, to keep generic Clarinex® (desloratadine) 5 mg out of the US markets until at least July 2012. New Merck's SEC filings recite that annual sales of the overall, all-strength Clarinex fanchise are about $750 million. When a mass-market drug like this goes generic, a very conservative estimate would be that consumers save close to two-thirds -- compared to branded prices. So, but for Schering-Plough's two and one half year "pay for delay" deal, consumers would be saving $1.2 billion on generic Desloratadine tablets in the 5-, 10- and 15-mg formulations, through July 2012 alone -- and much more beyond. [The math: 2/3 savings, times ($750 million times 2.5 years) = $1.2 billion.]

See this this vintage AP report:

. . . .Since then, consent orders have been entered and/or settlements now have been reached in the cases against Anchen Pharmaceuticals, Inc., Belcher Pharmaceuticals, Inc., Caraco Pharmaceutical Laboratories, Ltd., Dr. Reddy's Laboratories, Inc. and Dr. Reddy's Laboratories, Ltd., GeoPharma, Inc., Glenmark Pharmaceuticals Inc., USA, Glenmark Pharmaceuticals, Ltd., Lupin Pharmaceuticals, Inc. and Lupin Ltd., Mylan Pharmaceuticals Inc., Orchid Chemicals & Pharmaceuticals Ltd. and Orgenus Pharma, Inc., Perrigo Co., L. Perrigo, Co., Ranbaxy Inc., Ranbaxy Laboratories Limited, Sandoz Inc., Sun Pharmaceutical Industries Ltd., Watson Laboratories, Inc. and Watson Pharmaceuticals, Inc. and Zydus Pharmaceuticals, USA, Inc., thereby resolving the actions between Schering Corp. and these parties.

The terms agreed to with Orchid on timing of market introduction in the U.S. will apply retroactively as appropriate to the previously negotiated agreements. Also, the Orchid agreement provides for potential modification of its terms. The law suit is still pending until an order of dismissal is signed by the court. Under current law, the agreement can be reviewed by the U.S. Federal Trade Commission and U.S. Department of Justice. . . .

This morning, news outlets in India -- Sun Pharma's home country -- reported the FDA clearance.
. . . .[Sun received approval on] its abbreviated new drug application (ANDA) has established endorsement through US Food and Drug Administration (USFDA) to promote a generic edition of Clarinex tablets of Schering Plough. . . .

The group has established the endorsement for standard Clarinex tablets in the power of 5 mg. The medicines are designate for sensitive to rhinitis or allergic irritation of the nasal passage, it added. . . .

The English translation is poor on that story, to be sure, but the sense of it is there. [In early November 2010, Lupin won FDA clearance as well.] So, Sun and Lupin and Orchid may all sell generic Clarinex as soon as the "pay for delay" deal ends.

It still appears (based on my review -- see note (f) to that $20.7 billion patent cliff table) that the earliest these companies may start selling in the US is July 2012 -- and when Sun and Lupin do, Orchid Pharmaceuticals will be there, having previously received FDA clearance (in March of 2010).

So, one might ask -- what is fair about a patent suit that is settled, and effectively keeps generics off the market for an additional three and one half years, where had legacy Schering-Plough lost the suit it filed to enforce the patents (as it seemed likely it might), we all would have benefited to the the tune of $1.2 billion, at a minimum?

Remember, this is after tens of billions worth of Clarinex branded tablets were sold by legacy Schering-Plough, and now Merck, in the last decade and a quarter -- there is no sense that either ever lost anything on this deal. Each has made back, many hundreds of times, the original investment.

We do need patent-abuse, and Robinson-Patman Act price reform -- in pharma. Afterall, that is -- at base -- what is going on here: an unlawful dodge of the regulations prohibiting resale price maintenance. It looks like a monopolists' price -- in violation of the Sherman, and Clayton Acts, as well.


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