.Cheap Drugs, Expensive Lawsuits

Hayward's Impax Laboratories wants to make generic versions of some of the most popular name-brand drugs. If only it survives the lawsuits.

Impax Laboratories is a bit like the generic medicines it manufactures: a powerful agent wrapped in a nondescript exterior. The Hayward-based company is the tenth-largest generic-drug maker in the United States, which says a lot, given Americans’ taste for cheaply assuaging their aches and pains with prescription medicines. Yet the company’s modest headquarters are unobtrusively housed not far from I-880 in a vanilla-pudding-colored structure not much more architecturally daring than your average strip mall.

But even as some Bay Area biomedical firms pinch pennies or retrench, Impax is putting the finishing touches on a 50,000-square-foot production facility capable of churning out two billion doses of medicine a year. It plans to turn its current warehouse into an administrative command center, and has purchased still more vacant land next to its new facility upon which to build yet another production line. It’s banking on the public’s increasingly strong demand for low-cost generic medicines.

If the economy bears out the company’s happy predictions about the future of the generic drug market, Impax Laboratories plans to more than double its workforce over the next several years. Impax currently manufactures about a half dozen different generic drugs, and has filed paperwork with the federal Food and Drug Administration to manufacture fifteen more. In the years ahead, it hopes to file six such applications every year.

Perhaps the most noteworthy addition Impax hopes to make to its roster is a generic version of Claritin — no doubt a familiar name if you are one of the nation’s 35 million seasonal allergy sufferers, or have been anywhere near a television in recent years. Like many other anti-allergy drugs, Claritin works by blocking your nasal passages’ response to histamines, tiny molecules released in reaction to pollen or other irritants. But Claritin’s maker, Schering-Plough Corporation, has heavily promoted it as a vast improvement upon over-the-counter allergy medications because the formula is nonsedating. That means you can pop a pill and still stay awake at the wheel.

Consequently, Claritin is one of the nation’s most popular drugs, and now produces about a third of Schering-Plough’s annual revenue. It’s also notoriously pricey, costing as much as $85 for a month’s supply. The conjunction of these factors has put Impax at the center of a heated legal battle between Claritin’s inventor and the drug makers who want to sell a generic version.

Although Claritin clearly found a ready consumer market, getting it to pharmacy shelves was not easy. Schering-Plough received a patent for the underlying chemical compound in 1981, but it did not formulate Claritin and approach the FDA for approval to sell it until 1986. Agency review added more than six years to the process, partly because the FDA first thought Claritin did not substantially improve upon existing treatments, and partly because Schering-Plough modified the pill’s dosing mechanism midway through the process. The drug was finally approved in 1993 — twelve years after Schering-Plough’s initial patent was granted.

But the company’s patience was amply rewarded. Today, Claritin is a “blockbuster,” a title given to any drug that earns its developer more than $1 billion in annual US sales. Claritin has been a prodigious cash cow for Schering-Plough, last year generating $2.7 billion. The company markets five different formulations of the drug: the original, a syrup, a quick-dissolving “Reditab,” and 12- and 24-hour versions. But the good times may be about to end for Schering-Plough. The patent that covers Claritin’s active chemical compound, loratadine, is set to expire this December.

Enter the competition. At least eighteen different companies are jostling for the right to make generic loratadine once Schering-Plough’s patent expires. And at the head of the pack is Impax, the East Bay’s only generic drug maker, which has filed applications with the FDA to make three different generic versions of loratadine — a Reditab, 12-hour, and 24-hour doses of the drug.

Which, if any, of those pills will roll off the firm’s Hayward production line will be decided by the courts. Impax was promptly rewarded for its three FDA applications with three lawsuits from Schering-Plough. Each suit seeks to prevent Impax from marketing loratadine, claiming that the company’s plans infringe on at least one of the developer’s patents. Schering-Plough also has sued seventeen other generic manufacturers. If the company wins its suits, the generic version of Claritin could potentially be pushed back until at least 2004 for the Reditab and 12-hour versions, and 2012 for the 24-hour formula. The extra years of market exclusivity would mean billions of dollars in sales for Schering-Plough. But even if it doesn’t win in court, the resulting delay in getting a generic version of Claritin to market could cost consumers tens, if not hundreds, of millions of dollars.

Schering-Plough is hardly the only drug developer that has turned to litigation to keep Impax from manufacturing a generic knockoff of one of its products. Impax is being sued by the makers of every single drug it plans to copy, including the generic version of rival allergy drug Allegra, anti-ulcerant Prilosec, depression medication Wellbutrin, pain drug OxyContin, lipid-regulating agent TriCor, and antismoking drug Zyban. In each case, the drug developers are alleging patent infringement and asking that Impax be prevented from making their drug until litigation is resolved.

For Impax, the lawsuits are just business as usual. The entire generic drug conversion process is fraught with litigation. Given the way that patent law is currently written, it is actually in the best interest of both sides to end up in court. Generic drug makers have an incentive to approach the FDA as early as possible with applications to make copies of profitable drugs. Drug developers, on the other hand, profit by filing patent-protection lawsuits and dragging them out best they can, often extending their market monopoly. Critics say “Big Pharma” is exploiting loopholes in patent law to spin out their market exclusivity for as long as possible, keeping prices artificially high and preventing drug makers such as Impax from bringing their products to pharmacies.

If there’s a guaranteed loser in this process, it’s consumers, who continue to pay premium rates for every medicine held up along the way. Generic drug makers generally sell their medicines for an estimated thirty to seventy percent below the cost of their brand-name twins. If not for this costly litigation, cheaper versions of popular drugs would come to market more quickly. Generic drug prices would probably also be lower than they are today, and more medicines might be available in generic form. It’s estimated that the public loses $8 to $9 billion in savings a year due to delays caused by this system.


The relationship between drug developers and generic drug makers wasn’t supposed to be this contentious. In 1984, in an effort to build symbiosis into the industry, Congress passed the landmark Hatch-Waxman Act, a reform of US patent law that essentially created the modern generic-drug industry. Since then, the generic share of the market has climbed from 19 percent to 45 percent, as consumers have become more comfortable accepting no-name versions of their favorite name-brand medications.

The US patent system is based on a very simple trade-off. The government rewards innovation by giving inventors a twenty-year monopoly on their new products; in return, innovators agree that once their patents expire, their inventions enter the public domain. But drug patents have two peculiarities that distinguish them from patents in other industries. First, being awarded a patent does not give a drug’s inventor the right to manufacture it immediately. All drugs must successfully undergo human clinical trials and be approved by the FDA, a process that can take years out of a patent’s lifespan. Consequently, developers say, the effective patent monopoly of many name-brand medicines is not twenty years but actually more like fifteen or ten.

Secondly, in recognition of the public benefits of making generic drugs available promptly, manufacturers are allowed to begin testing and making copies of a drug prior to expiration of its developer’s patent, so that they can roll out the generic product immediately upon patent expiration. No other industry lets competitors copy an innovator’s product while its technology is still under patent protection.

Under Hatch-Waxman, generic-drug makers occupy a special place in the drug development system. In essence, they can piggyback upon the hard work already done by drug developers. The act eliminated the need for generic companies to present safety and efficacy studies to the FDA, since they are simply copying products that already have been tested and sold safely for many years. All a generic manufacturer must do to obtain FDA approval is to show that its formulation contains the same active ingredients in the same amounts as its name-brand analog, and that they disperse throughout the body at the same rate. To encourage generic-drug makers to move swiftly, Hatch-Waxman also granted the first generic company to go to market with each drug a 180-day market-exclusivity period, during which millions of dollars can be made.

In return for these concessions, Congress granted the major pharmaceutical companies protection against “patent-jumping” by overzealous generic makers. If a name-brand manufacturer goes to court to stop a generic drug maker from infringing one of its patents, the court will automatically grant it a stay of up to thirty months during which the generic cannot be marketed.

How did a system designed to be symbiotic instead become so fractious? For the first decade of its existence, Hatch-Waxman seemed to be working well. But with the rise of the blockbuster drug in the mid-’90s, protecting one’s patents in court became more important for drug makers, and the two industries began eyeing one another as competitors rather than compatriots.

The easing of FDA restrictions on broadcast advertising in 1997 encouraged drug companies to sink massive funding into television ads. And advertise they have; the Kaiser Family Foundation estimates that drug companies spent $2.5 billion last year on direct-to-consumer advertising. Television spots urging viewers to ask their doctor about this or that purple pill have had a remarkable effect on drug usage. A recent FDA study found that about a quarter of patients now ask their doctor for drugs by their brand name. When this occurs, the physician goes on to prescribe it for them more than two-thirds of the time. All those requests add up: overall prescription drug spending has increased at least seventeen percent every year since 1998.

The industry position is that drug spending is rising due to the increased use of medicines, not rising prices. More drug use is good, they say, because it means that more people are being diagnosed at earlier stages with treatable conditions, all of which prevents costly hospitalization later.

In any case, now that drug makers have a direct line to consumers, building a brand for your drug — and maintaining control of the brand — has become significantly more valuable. Although name-brand drugs account for only 55 percent of total prescriptions written, the National Institute of Health Care Management estimates that they make up about 92 percent of the $154.5 billion spent last year on retail prescription drugs. Blockbuster drugs were a huge part of those sales: Last year 44 percent of drug spending — $68 billion — was devoted solely to the fifty top-selling brand names.


Since name-brand drugs typically lose 75 percent of their market share to generic versions within two years of patent expiration, drug developers have a powerful incentive to protect their biggest-sellers from generic interlopers for as long as possible. Generic manufacturers say drug developers have perverted the intent of the Hatch-Waxman Act by exploiting the provision that allows them to keep competitors from coming to market for thirty months. They complain that Hatch-Waxman essentially rewards drug developers for going to court, even in cases where their patent claims are weak.

“The way the system is set up now offers too much potential for abuse,” says Clay O’Dell, public-affairs director for the Generic Pharmaceutical Association. “It may be the most ridiculously false and frivolous patent you’ve ever seen, and the court may tell them that they have no right and throw it out, but in the meantime, with an automatic thirty-month stay, the brand industry is going to enjoy anywhere from three months to three years of monopoly.”

In fact, drug developers lose their infringement suits a whopping 85 percent of the time, which critics interpret as proof that they frequently use such suits as a stalling tactic. But since they are never penalized for suing no matter how frivolous their case, every day in court can mean another day without competition. Even the cost of a cadre of patent attorneys is nothing compared to the revenues that come from keeping a blockbuster drug’s monopoly for another day.

Critics also allege that drug makers unfairly string out their market monopolies for years beyond what Congress originally intended, by engaging in a process called “patent-stacking.” The idea behind patent-stacking is that the drug developer originally patents the molecule that is the drug’s active ingredient, then files other “add-on” patents partway through the lifespan of the main patent. These could be genuine improvements, or they could simply tweak minor features such as the drug’s color, dosage form, or method of administration. They also often cover manufacturing methods or the machinery used to produce a drug, refinements that make it even harder for generic manufacturers to copy a drug without running afoul of its developer’s patents. Depending on when they are filed, these add-on patents can expire years, even decades, after the original patent on the active ingredient — thus extending the company’s market monopoly.

Louis Piccone, intellectual property counsel for Impax, says drug developers can patent so many aspects of the formulation process that it’s virtually impossible to avoid infringement. He notes that sometimes drug developers simultaneously sue half a dozen different generic makers, all of whom believe they have come up with different ways to design around the original patent. “You have to wonder about what their intent really is,” he muses.

The most notorious example of patent-stacking may be the case surrounding Bristol-Myers Squibb’s antianxiety treatment BuSpar, which was set to lose its patent in November 2000. Although a generic version of the drug had been approved by the FDA and was ready to ship to market, the day before BuSpar’s patent expired, Bristol-Myers Squibb filed an add-on patent on BuSpar’s metabolite, or what the chemical becomes once it has broken down inside the body. The automatic stay was activated, and although four months later the court emphatically ruled in favor of the generic manufacturer, the stalling paid off. In those extra four months of market exclusivity, Bristol-Myers Squibb made approximately $200 million on BuSpar.

The drug industry’s main lobbying group, Pharmaceutical Research and Manufacturers of America, better known as PhRMA, says its members generally use the thirty-month stay to defend their intellectual property from poaching, not to sneakily spin out their market monopolies. PhRMA spokesman Jeff Trewhitt points out that, as in the BuSpar case, some bad actors are unfairly being singled out as the norm. Few companies would be so foolish, he says, as to put forth an entirely meritless case for fear of having it thrown out of court.

“We are very frustrated that the rhetoric has become so overheated and simplistic that there is this portrayal that the generics are on the side of the angels and the innovative pharmaceuticals are on the side of the devil,” Trewhitt says. “The generics industry is anything but an angel.” He points out that generic makers opt to manufacture only twenty percent of the drug varieties available to them, meaning that they avoid drugs targeted at smaller patient populations in favor of chasing blockbusters, just as they accuse their name-brand counterparts of doing. “If the generic companies are so magnanimous and on the side of the angels, why have they failed to provide generic copies of medicines in eighty percent of the cases where they could?” he asks.

Trewhitt has a point. He notes that since Hatch-Waxman passed in 1984, the FDA has approved more than eight thousand drugs, and in 94 percent of those cases there was no patent dispute. The raft of lawsuits filed against Impax Laboratories serves as virtual proof that the Hayward-based firm has mainly targeted big sellers to reproduce in generic form. In fact, Impax boasts that it is currently developing generic versions of drugs that together had sales of more than $4 billion last year. With the exception of Zyban, each drug in the Impax pipeline currently sells hundreds of millions of dollars worth of pills annually, with Prilosec and Wellbutrin boasting annual sales of well more than $1 billion.

There’s no question that generic-drug makers benefit mightily from letting Big Pharma do their market research for them — after all, they can base their own manufacturing choices on detailed knowledge of which drugs sell well. However, generic-industry officials say that, over time, simply following the pack will not be smart business strategy, particularly since the federal government provides financial incentives to companies that make generic versions of drugs that serve smaller patient populations. “Because so many generic companies try to copy the blockbuster drugs, they become very competitive,” Impax co-CEO Charles Hsiao notes. “So actually there will be a shift where people try to copy the smaller products.”

But for the moment, there’s a landgrab underway for the blockbuster market. And a big part of the explanation for it is that an extraordinarily large number of blockbuster drugs are about to lose their patent protection.

Patents on $30 billion worth of the nation’s most popular drugs are set to expire in the next several years. Among the blockbusters that could go generic: the heartburn medication Prilosec this year, the legendary anthrax defense Cipro next year, cholesterol-lowering drug Zocor and depression treatment Zoloft in 2005, and depression treatment Paxil the year after that.

Is this wave of simultaneous patent expirations coincidental, or is it a product of the same forces that gave us patent lawsuits and blockbuster drugs? Many observers believe the latter. “For an extended period, a lot of the big pharmaceutical houses have been slow to develop new products and they’ve basically become big marketing machines,” says Piccone. Instead, he says, big companies have become increasingly reliant on goosing sales with heavy advertising, or buying up smaller companies that seem to have promising drugs in their own research pipelines.

A high-profile study released this May by the National Institute for Health Care Management, a group partially funded by Blue Cross Blue Shield, roundly accuses Big Pharma of failing to perform the innovation that would justify its massive profits. According to the study, from 1989 to 2000, the FDA approved 1,035 new drug applications, of which only 35 percent contained new active ingredients, and only 24 percent were given “priority review” status by the FDA, an indication that they constituted significant improvements over previously existing medications. Instead, the study concluded, the industry has focused on cranking out “me-too” drugs that offered only minor improvements on what was already available. The study also concluded that Americans were spending more than ever on new drugs, even on those that weren’t terribly innovative.

Industry critics point to Claritin’s name-brand successor as a good example of this trend. Earlier this year, Schering-Plough introduced a new nonsedating antihistamine it dubbed Clarinex, which it is marketing as an improvement over Claritin, saying it treats a broader variety of allergies. Yet Clarinex isn’t technically a new drug, but rather a distillation of the biologically active molecule in its sister, Claritin. In fact, the next-generation products in the Schering-Plough pipeline look awfully familiar. While its upcoming product line lists a variety of drugs that will hopefully treat various cancers, HIV-related infections, and asthma, three of the five drugs currently in the final stage of development are different versions of Clarinex.

Schering-Plough declined to comment, referring all questions to PhRMA, which loudly dismisses the National Institute for Health Care Management study as “pure baloney.” PhRMA argues that the study misinterpreted the purpose of giving a drug “priority review” status — they say it’s primarily an “FDA management tool” for sorting drug applications and not an indicator of the drug’s innovativeness or ultimate value to society. PhRMA also stands up for “me-too” drugs, saying that since not all people can safely take the same drugs, the public benefits by having as many options in a therapeutic class as possible. Later versions of drugs may contain improvements that make them easier to take, lessen their side effects, or modify them for new patient populations, such as children.

PhRMA also points out that the study disregards biotech medicines and vaccines, an increasingly important field of endeavor that produced 130 new medicines during the period covered by the report, including Herceptin, a breast-cancer treatment, and Varivax, the first vaccine for chicken pox. “They are undergoing a challenging transition from traditional chemistry to new cutting-edge techniques of biotechnology,” Trewhitt says of industry R&D departments. “Many companies are on a steep learning curve, and they are spending more time and money on basic research than they have in years.” In the meantime, he says, the pipeline is filling back up. In the United States right now there are about 350 new- generation biotech medicines in human clinical testing, and Trewhitt points out that many of these are designed to treat killer diseases among the most complex ever tackled by science, including cancer, Alzheimer’s, and Parkinson’s disease.

Big Pharma’s generic-industry counterparts may blast it for filling the market with dozens of similar treatments for the common cold, but even its toughest critics admit it has a difficult job to do. If the drug development pipeline seems dry, Trewhitt says, it’s because it’s taking longer to bring new products to market — in part because the FDA’s drug-approval process has become lengthier and more complicated. It now takes an average of ten to fifteen years to get a new drug approved. Over the last two decades, the average number of technical studies per human clinical trial has increased from 30 to 68, the average number of volunteer patients in human clinical trials has tripled from 1,300 to 4,500, and the average time span of human tests has gone from three or four years to six or seven. Developing a new drug is also mind-bogglingly expensive; on average it costs about $800 million per drug, up from $500 million in the early ’90s.

Still, there’s little denying that the patents on some of the nation’s biggest blockbusters are approaching expiration at the same time that the number of new drugs in the pipeline has hit a temporary low point. Trewhitt concedes that progress is not always linear. “For decades, biomedical research has been a series of incremental steps,” he says. “We do not always have breakthroughs. It’s too complicated and challenging to always have breakthroughs. It would be nice if it worked that way, but it doesn’t.”


Industry critics argue that the business and legal climate has created a situation in which it is easier and cheaper for drug companies to sue than innovate. “They just don’t have enough coming out that’s really going to wow the shareholders and give them that market advantage, so they have to at least partially count on an aggressive legal strategy to protect the drugs whose patents are expiring,” says Clay O’Dell of the GPA.

Consumers are becoming increasingly sensitive to this intra-industry wrangling, since it directly impacts their wallets. “For more than a decade, generic utilization was rising,” says O’Dell. “We were becoming established in the marketplace. But if you start looking at the mid-1990s, the numbers start to tell a distinct story.” As name-brand companies poured more money into advertising to consumers, generics’ market share flattened in the mid-’90s, hovering at slightly more than forty percent. Meanwhile, the costs of the two types of drugs began diverging sharply. In 1990, the difference was only 165 percent. By 2000, according to the association, the average price of a prescription drug was 238 percent higher than that of the average generic one.

The graying of the Baby Boomers has provided a captive audience for even the highest-priced prescription drugs. For working people with health insurance, the price differences between name-brand and generic drugs are not always immediately noticeable, although rising drug prices do tend to drive up the cost of HMO premiums over time. But for people without prescription drug coverage — most notably retired seniors — the difference is sharply felt. Attorney Sarah Lenz Lock with AARP (formerly known as the American Association of Retired Persons) notes that most retirees pay for medications out of their own pockets. Although seniors comprise only thirteen percent of the US population, they account for 42 percent of the nation’s drug spending.

It’s rare that you’ll find the senior lobby taking the same side as the HMOs, but in this case, the managed-health-care industry has billions of dollars to gain. The growing push for cheaper generic drugs has made for other strange bedfellows too, such as the unlikely alliance struck by Business for Affordable Medicine, a generic-industry lobbying group that counts among its membership several locals of the AFL-CIO, mega-employers such as Wal-Mart and Verizon Wireless, and the governors of nearly a dozen states.

In but one sign of these new political realities, the AARP last month announced that its attorneys will serve as co-counsel in a case accusing Bristol-Myers Squibb of using a last-minute patent addition to keep the generic version of BuSpar from being sold. AARP attorneys also will serve as co-counsel in two other cases accusing name-brand drug makers of forging anticompetitive agreements with first-to-file generic companies. These cases separately allege that Schering-Plough paid two generic manufacturers not to produce copies of K-Dur, a medication for high blood pressure, and that AstraZeneca paid Barr Laboratories to refrain from making breast-cancer drug Tamoxifen. The generic companies agreed to never start producing the drug, thereby never activating their 180-day exclusivity periods, effectively preventing other generic makers from entering the market.

Accusations such as this have led to pressure to reform the Hatch-Waxman Act. A bill sponsored by Senators John McCain (R-AZ) and Charles Schumer (D-NY) and currently being debated in Congress proposes to eliminate the Hatch-Waxman Act’s automatic thirty-month stay. It would instead allow the courts to decide on a case-by-case basis whether or not a case merits a preliminary injunction. It would also adopt a “rolling” 180-day exclusivity period, meaning that if the first generic company to successfully file with the FDA does not go to market in a timely fashion, the rights to produce the drug would pass to the next filer in line. The move is enthusiastically supported by the generics industry and its allies, which contend that current law is self-defeating because it attempts to encourage competition by essentially stifling it.

Hatch-Waxman Act reform is predictably opposed by name-brand manufacturers, who argue that any changes will upset the balance of finely tuned legislation that benefits both sides. Orrin Hatch (R-UT), coauthor of the original law, argues that the thirty-month stay is not only justified, but a trade-off that the generics industry made in return for being granted legal leeway not afforded to any other industry. “Generic drug firms enjoy … unique and unprecedented protection … and get a head start that no other type of patent challenger is afforded,” Hatch told a Senate committee this May. Instead, the name-brand industry would prefer to see the federal government concentrate its efforts on a decidedly friendlier reform: revamping Medicare by providing prescription drug coverage for seniors.


Meanwhile, the legal standoff between Impax and Schering-Plough is ongoing. Impax believes it was the first to file for at least one version of Claritin, meaning if it the company prevails in court it will be awarded the 180-day market exclusivity period. However, since loratadine has time to go on its original patent, a generic can’t go to market quite yet.

By filing FDA applications to market loratadine, the active chemical ingredient of Claritin, Impax is essentially betting that it has figured out a way to deliver the same amount of chemicals to the body at the same rate as original drug. And it’s betting that it can do all of this without infringing on any of Schering-Plough’s additional Claritin patents. This is tricky, because the Claritin family of products is covered by five patents, including one on what the chemical becomes inside a consumer’s body. Schering-Plough also received two patent extensions: two years to compensate for the lengthy FDA approval process, and another six months granted in return for formulating a pediatric version of the drug. Although the patent on Claritin’s main chemical compound is up this December, Schering-Plough says Impax’s proposed formulation will violate two of its remaining patents. It’s still an open question whether continuing litigation will roll back the date at which Impax can start selling its products.

Schering-Plough’s legal tussle with Impax over the right to produce a generic version of Claritin recently took a strange twist, partially due to the lobbying efforts of Robert Seidman, chief pharmacy officer for Wellpoint Health Networks, a Los Angeles-based HMO. For years, Seidman has lobbied the FDA to convert the nation’s top three allergy medications — Claritin, Allegra, and Zyrtec — to over-the-counter medicines. Seidman and his supporters say these treatments have more benefits and fewer health risks than over-the-counter antihistamines such as Benadryl, and could safely be dispensed without a physician’s involvement. Converting these drugs to over-the-counter medicines would drive their prices down, he argues, leading to huge savings for both consumers and HMOs.

The drugs’ manufacturers vehemently opposed the idea of conversion. But last May, an FDA medical advisory panel supported Seidman’s proposal, indicating that the entire agency might soon follow suit. So last month, Schering-Plough grudgingly reversed its stance, announcing that it will convert Claritin to an over-the-counter medication starting in March 2003. Who did it chose to manufacture the new version? Impax.

Although Impax executives say they are pleased with this new partnership, it does not resolve the two companies’ ongoing litigation over generic Claritin, about which neither company will comment. Confused industry observers say Impax stands to both gain and lose from this sudden switch. Its stock price shot skyward once the deal was announced, since being allowed to market any version of Claritin would be a significant achievement for the small company. But since over-the-counter drugs are generally cheaper than their prescription counterparts, Impax is likely to make smaller profits than it might have otherwise.

Since Schering-Plough isn’t talking, it’s hard to know why it reversed course. Now that it’s being sued for allegedly colluding with another manufacturer to keep a generic K-Dur off the market, is this simply a more refined attempt to co-opt a competitor? Or is it a way of wriggling out of patent litigation that it suspects Impax will eventually win? Perhaps the company is focusing more on promoting its lucrative name-brand successor, Clarinex.

In any case, what you’ll pay for the nation’s best-selling prescription drugs is not likely to be settled this summer, by Hatch-Waxman reform or resolution of the Claritin lawsuits, or even next November, when legions of politicians will try to convince the electorate that they did their part to drive down prices. It’s also not likely to end with the expiration of allergy-drug patents, given the bevy of cholesterol-lowering drugs and depression treatments facing expiration within the next few years. “There are still plenty of blockbusters out there,” O’Dell warns. “Now the question is, are we going to keep playing this game or get some relief in terms of reform so that this doesn’t keep happening? Because there are bigger, more expensive drugs waiting in the wings.” And as the American public has already demonstrated, when we’re sick and there’s only one cure in sight, we’ll pay through the nose.

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